Accounting Interview Questions with Answers
Categories: Accountancy
What are Trade Bills?
Every transaction is documented and the trade bills are those documents, generated against each transaction.
Can you define the term Material Facts?
Yes, these are the documents such as vouchers, bills, debit and credit notes, receipts, etc. They serve as the base of every account book.
What are the different stages of the Double Entry System?
There are three different stages of the double-entry system, which are –
- Recording transactions in the accounting systems
- Preparing a trial balance in respective ledger accounts
- Preparing final documents and closing the books of accounts
What are the disadvantages of a Double Entry System?
- Difficult to find the errors, especially when transactions are recorded in the books
- In case of any error, extensive clerical labor is required
- You can’t disclose all the information of a transaction, which is not properly recorded in the journal
What are Assets Minus Liabilities?
Assets Minus Liabilities stand for an owner’s or a stockholder’s equity.
What is GAAP?
GAAP is the abbreviation for Generally Accepted Accounting Principles (GAAP) issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956. It is a cluster of accounting standards and common industry usage, and it is used by organizations to:
- Record their financial information properly
- Summarize accounting records into financial statements
- Disclose information whenever required
Can you tell me some examples of liability accounts?
Some popular examples of liability accounts are –
- Accounts Payable
- Accrued Expenses
- Bonds Payable
- Customer Deposits
- Income Taxes Payable
- Installment Loans Payable
- Interest Payable
- Lawsuits Payable
What is the difference between accounts receivable and deferred revenue?
Accounts receivable is yet-to-be received cash from products or services that are already sold/delivered to customers, whereas, deferred revenue is the cash received from customers for services or goods not yet delivered.
Where should you record a cash discount in a journal entry?
A cash discount should be recorded as a reduction of expenses in a cash account.
What is a compound journal entry?
A compound journal entry is just like other accounting entries; the only difference is that it affects more than two account heads. The compound journal entry has one debit, more than one credit, or more than one of both debits and credits.