Accounting Interview Questions with Answers
Categories: Accountancy
What is the dual aspect term?
The dual aspect suggests that every business transaction requires double-entry bookkeeping. This can be understood with the example- If you purchase anything, you give the cash and receive the stuff, and when you sell anything, you lose the stuff and earn the money. This defines the aspects of every transaction.
Define depreciation.
This is one of the most basic accounting questions for an interview. You can just mention that depreciation refers to the decreasing value of any asset that is in use. It is necessary for calculating a business’s net income in every accounting period.
Do provide examples to elaborate on this accounting interview answer.
What are the different types of depreciation?
This is a follow-up to the previous accounting interview question. Mention the following, common depreciation methods.
- Straight Line Depreciation
- Double Declining Balance
- Units of Production
- Discounted Cash Flow
What is the difference between the consignor and consignee?
This is a very simple accounting interview question. Just mention the following.
Consigner – S/he is the shipper of the goods
Consignee – S/he is the recipient of the goods.
Define Partitioning.
Partitioning refers to the division/subdivision/grouping/regrouping of financial transactions in a given financial year.
Differentiate between Provision and Reserve.
For this accounting interview question, try to keep your answer brief but to the point.
Provisions – This refers to keeping the money for a given liability. In short, EXPENSES.
Reserves – Refers to retaining some amount from the profit for future use. In short, PROFITS.
What is an over-accrual?
It is a situation where the estimate for accrual journal entry is very high, and this may apply to the accrual of revenue or expense.
What is reversing journal entries?
Reversing entries refer to the journal entries that are made when an accounting period starts. These entries reverse or cancel the adjusting journal entries that were made at the end of the previous accounting period.
Name some intangible assets.
Ans. Intangible assets include –
- Patents
- Copyrights
- Trademarks
- Brand names
- Domain names
What is a Bad debt expense?
Bad debt expense is asset accounts receivable of a company and is considered to be uncollectible accounts expense or doubtful accounts expense.
When do you capitalize rather than expense a purchase?
An item’s cost is capitalized if it is expected to be consumed by the company over a long period. This way their economic value does not depreciate.
When does goodwill increase?
Goodwill can be increased through the acquisition of another company as a subsidiary, by paying more than the fair value of its tangible and intangible assets.