Accounting Interview Question

Categories: Accountancy

What is the financial impact of buying a fixed asset?

Talking from the budget point of view the subsequent are going to be the impact:

Income Statement – Buying won’t have any direct impact on the earnings report. However, year on year you will charge depreciation as an expense to the income statement.

Balance Sheet – Fixed assets will increase whereas current assets (cash paid) will decrease if the payment is formed within the same fiscal year. If the payment is not made in the same financial year then instead of a decrease in current assets, there will be an increase in current liabilities. Also, every year, when depreciation is charged to the income statement, the asset will be reduced.

Cash flow statement – There will be a cash outflow that will be shown under the cash from investing activities section of the cash flow statement.


What is an over accrual?

An over accrual may be a condition where the estimate for an accrual journal entry is just too high. This evaluation might remove to the addition of expenditure or income.


What is the account receivable?

A short term amounts due from buyers to a seller, who have purchased goods or services from the seller on credit is referred to as account receivable.


 What are the activities that are included in the Cash Flow Statement?

The income statement showcase the cash generated and used during the year or months. Various activities that are involved for the income are:

  1. Operating activities: Business activities accounting to cash
  2. Participating actions: Deal and obtaining of tackle or stuff
  3. Economic actions: Buying of standard and individual words
  4. Additional material: conversation of significant items that don’t include money


What happens to the company’s “Cash Account” if it borrows money from the bank by signing a note payable?

Due to double-entry bookkeeping, the “cash account” will increase intrinsically the liability account increases.


 Which account is liable for interest payable?

This report which means liable or influenced by the benefit due is “Modern debit statement.”


 What’s reversing journal entries?

Reversing journal entries are entries made at the beginning of an accounting period to wipe out the adjusting journal entries. These entries are made at the top of the previous accounting period.


Where do generally accruals appear on the balance sheet?

Accrued expenses usually tend to be extremely short-term. So you’d record them within the “current liabilities section” of the record.


List out a number of the accrued expenses and therefore the accounts to record them?

Accrued expenses and therefore the accounts are:

Income increase is moving in with a recognition of the “wages allocated account. Notice increase has arrived with acclaim to the “attention owed explanation. “Staff tax accrual is reached with a credit to the “staff duties owed explanation.”


Deferred taxation may be a part of which equity?

Deferred taxation may be a part of the owner’s equity.

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