Accounting Interview Questions with Answers Set 8

Categories: Accountancy

 How do you bridge the gap when you are trying to make an individual with no accounting knowledge grasp complex accounting concepts?

Here the recruiter is gauging your communication skills. 

Try giving an in-depth answer to this question. To provide strategic advice, you can highlight that you don’t use figures and accounting terms, which will show that you are trying to understand their pain points. 

When you can say that you simplify the technical terms through anecdotes or analogies, it only shows you are clear with the accounting concepts. 



 How do you calculate Earnings Per Share?

 Earnings Per Share or EPS is the amount that the shareholder will earn from the earnings of the company. It is calculated by the following formula:

EPS = (Net Income – Preferred Dividends)/Average outstanding common shares



Why does a company require different budgeting methods? Name the most important ones. 

 Calculating a company’s budget through efficient budgeting methods prevents future bankruptcy. 

Activity-based, zero-based, incremental and value proposition are the four main types of budgeting methods. It would be ideal if you explain these four through examples. 



What are the main differences between US GAAP and Indian GAAP? 

 Indian GAAP follows the accounting standards of the Institute of Chartered Accountants of India (ICAI), while US GAAP follows the Financial Accounting Standards Board (FASB). 

You can further highlight the technical differences between the two based on the table below:

Indian GAAPUS GAAP

Investment & Marketable securitiesThe income statement only recognises the unrealised depreciation on Available-For-Sale securitiesAppreciation and depreciation fall under Other Comprehensive Income

Format of financial statementsFollows Companies Act of 1956 under presentation requirements of Schedule VINo specific format

DepreciationBased on rates prescribed in the Companies Act, 1956Tentative period of an asset

Subsidiary Accounts ConsolidationNot mandatory



Name some of the Enterprise Resource Planning systems you have used. 

 Small companies hardly use ERP systems. If your previous job was in one, you can be completely honest that you are willing to learn about ERP systems. 

However, if you are experienced with Microsoft Dynamics GP or any other Enterprise Resource Planning system, mention how you were using it. This will help your employer understand how much more you need to know about them. 


Which skills do you consider important as an accounting professional when you are working remotely? 

 Your answer to this question will determine your soft skills. 

Since the work environment currently remains unpredictable, you need to highlight how you can work around this issue productively.  

Showing adaptability, the ability to take on new challenges and diplomatic teamwork are among the most desirable characteristics for accounting professionals of any level. 



 Name some common ways of identifying fraudulent entries. 

With this accounting interview question for senior-level positions, the employer wants to know how attentive the candidate is to journal entries and ledgers. Awareness of different types of fraud behaviours and fraud monitoring/prevention methods are important.  For instance, say, 

I know some of the most common fraudulent behaviours such as

  1. Out-of-period revenues are used for recording inflated revenue. 
  2. To show earnings, the cost of repairs is used as fixed assets.
  3. Liabilities are not present on the balance sheet. 
  4. Sometimes, expenses also can be shown as earnings when they are recategorised as company reserves. 



How do you manage deadlines with multiple accounting projects?

This accounting interview question is for the experienced who know how to prioritise their work. You can mention the following:


  1. I lay out the time-sensitive tasks first and complete them.
  2. I can multitask without hampering the quality of another project at hand. 
  3. I identify repeatable tasks such as sales proposals and client billing and turn them into the standard operating procedure (SOP). So each time I do these, I don’t have to start from scratch. 
  4. I use time-tracking apps for each project. 



What exactly is double-entry? How are transactions recorded in such an accounting system?

 This is a very common accounting interview question for accountants of all levels. Double entry is one of the oldest accounting systems. It simply means that for every accounting entry there is a corresponding entry into a different account. In this system, all transactions are recorded as credits and debits. This bookkeeping method relies on the fundamental accounting equation – 

Assets = Liabilities + Equity of the Shareholder

To explain how it works, you can give this example:

Suppose, ABC Company purchases Rs.5000 worth of office supplies by paying cash upfront. In this case, ABC Company’s asset account is required to increase by Rs.5000, while cash will need to decrease by Rs.5000. The asset account will be debited, while the cash amount will be credited. Here, the debit amount is always equal to the credit amount. 



 Name at least five different types of accounts in double-entry bookkeeping. 

 The five main types of accounts used are:

  1. Liability Account – When a company owes money to other businesses and will pay at a later date, it uses a liability account. 
  2. Capital Account – A capital account determines the net worth over a specific period, commonly during a year. These accounts include the shareholder’s equity. 
  3. Expense Account – This type of account includes a company’s daily operation costs. The costs can be for money spent on advertising or other expenses that are administrative in nature. 
  4. Income Account – This account shows what a company has earned over a specific period. It records the sources where the money originates from as well as the revenue gained for the sale of products/services. 
  5. Asset Account – It refers to any cash or goods a company owns. 



What differentiates contingent liability from bad debts?

 This accounting interview question is asked to understand whether you are well aware of the difference between very similar concepts. 

Contingent liability is not recorded on a balance sheet. It is simply the result of a record that may not occur. On the other hand, bad debt is recorded at the same time when there is a sale. 


Why are financial projections required in accounting?

A financial projection is necessary for managing any business, be it, small, medium or large. It shows forecasts on financial estimates including revenues and financial statements’ expenses. It takes into account the analysis of historical data and predicts different factors in the market outside a business.  Typically financial projections include the following:


Income Statement projection – It includes expenses, revenues, total income (Revenue – Expenses), income tax and net income over a particular period. 

Cash flow projection – It includes cash revenues and cash disbursements. 

Balance Sheet projection – The balance sheet determines a business’s net worth. It includes assets, liabilities and equity. 

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