Top 21 Account Executive Interview Questions In 2022 [With Answers]

Consistent improvisation, regulation, and control of the finances of a company are the keys to success. The businesses that constantly record, analyze, and summarize their monetary affairs are the ones, which are able to maximize their business potential and develop an effective regulatory framework.

An accounts executive is a vital business position, which requires you to record all the financial transactions of the company that can be measured in the terms of money. With extended responsibilities and the requirement of greater skills, this position often compensates lucratively.

The open positions or vacancies are usually limited in this job role, which even witnesses huge competition from the job seekers. Hence, give a serious effort and prepare using all the interview questions mentioned below.

Account Executive Interview Questions

21 Best Interview Questions To Study

1. Explain Any Three Profitability Ratios In Brief.

This question tests your understanding of the different financial ratios, which are primarily used to assess the financial performance of a company.

Sample Answer

Sure, sir, These are:

Name of the Profitability RatioFormulaSignificance
Earnings per share (EPS)Net profit earned by the company/ Total number of outstanding sharesThis ratio shows the profit that the company has generated for each of its shareholders
Dividend per share (DPS)Dividend distributed by the company/ Total number of outstanding sharesThis ratio shows the dividend that is distributed by the company to each of its shareholders
Return on Equity (ROE)Net Income/ Shareholder’s equityThis ratio shows the effectiveness with which a company has used its capital so as to maximize the shareholder’s wealth

2. What In Your Opinion Is The Cheapest and Most Expensive Source Of Finance?

This question tests your understanding of the different concepts related to “cost of capital”.

Sample Answer

Sir, every business, be it in the nascent stage of its operations or be it at the matured stage, needs money to carry on its business. This much-needed funding is provided to the business organizations by the banks, private equity firms or institutional investors.

  • Retained earnings are the cheapest source of finance in which busines organizations deploy or plough back the generated profits back into the business
  • The issue of common stock or equity shares is the most expensive source of finance and has the highest cost of capital among all the other sources

3. What Does A Debt/ Equity (D-E) Ratio Signifies? Also State The Ideal D-E Ratio.

This question tests your understanding of the various types of financial metrics that are widely used to measure the cost structures of the companies.

Sample Answer

Sir, a debt-equity ratio establishes a relationship between:

  • The “debt” represents the funds raised by the company from different financial institutions, such as banks, non-banking companies, and other private investors. This debt usually carries a coupon rate at which the company is required to service regular debt payments.
  • The “equity” represents the funds invested by the owners of the company from its own sources.

Ideally, a favorable debt-equity ratio of 2:1 is considered to be optimal.

4. What Are The Different Types Of Costs That Are Defined Under Marginal Costing?

This question tests your understanding of the various principles of marginal costing.

Sample Answer

Sir, marginal costing is a widely used branch of accounting, which is largely used in organizations that are engaged in manufacturing and production-related services. As per the concepts of marginal costing, the production cost can be divided into three different elements, which are:

  • Fixed cost: It represents the cost that remains fixed and static. It does not vary with the level of business activity and will be incurred even when the production falls to zero.
  • Variable cost: It represents the per-unit cost, which varies with the level of production. This cost becomes zero in case the organization is not producing any goods.
  • Mixed Costs: These costs represents the mixture or aggregation of fixed and variable costs. These costs always have a fixed element and a variable element, which moves in accordance with the level of business activity.

5. What Do You Mean By The Cost Of Goods Sold (COGS)? Also, Explain The Elements Covered and Ignored By It?

This question tests your knowledge of the direct cost and indirect cost that is incurred in the production of goods.

Sample Answer

Sir, Cost of Goods Sold is also known as Cost of sales/services. It includes all the DIRECT costs, which are involved in the production of goods but it specifically ignores all the indirect costs. Further, the valuation of COGS depends upon the accounting standards that a company follows.

List of Direct ExpensesList of Indirect Expenses
1. Labour cost
2. Material cost
3. Freight Inwards and Outwards
4. Sales Commission
1. Accounting Fees
2. Rent of Factory/Godown
3. Employee’s Salaries/Pensions/Benefits
4. Depreciation
5. Legal Fees
6. Tax Payments etc.

6. What Do You Interpret From A High Inventory Turnover Ratio? Also Explain Some Of Its Benefits.

This question tests your understanding of the inventory turnover ratio and its practical application.

Sample Answer

A higher turnover ratio depicts that there is a good demand for the company’s products in the market and it is able to sell its goods quickly. Such companies tend to have huge sales volumes and higher sales commissions. Companies with a higher ratio are often better managed and are efficiently operated, thereby, enabling them to enjoy higher credibility.

The higher the inventory turnover ratio, the more beneficial it is for the organization as it simply means that the organization is selling its produce/procurement quickly. The various benefits of a higher inventory turnover ratio are:

  • Lower risk of Obsolescence
  • Lower risk of Decay (if company deals in perishable goods)
  • Indicator of Strong Sales
  • Indicator of Better Profitability
  • Indicates company’s strong ability to access cheap funds
  • Better Return on Investment

7. What Do You Mean By Unrealized Gains and Losses? Can You Explain Its Accounting Treatment?

This question checks your understanding of the accounting treatment of different complex financial transactions.

Sample Answer

Sure, Sir, The explanation is hereunder:

  • Unrealized Gains are all the future gains, profits, and cash inflows that are expected to be earned by a company. These are not materialized yet, however, have a strong possibility of realization.
  • Unrealized Losses represent all the future cash outflows and losses that could happen in the future. They are still not materialized yet, but if they do, they can cause severe losses to the company.

The unrealized losses are recorded in the financial statements by creating provisions and setting aside profits. However, unrealized gains are not recorded in the financial statements.

8. Why Do Business Organizations Establish Provisions? Don’t You Think It Supresses Company Profits.

This question checks your understanding of the concept of prudence.

Sample Answer

Sir, provisions are established following the accounting concept of Prudence, which states that a company is requried to recognize all the probable losses, that it expects to incur in the near future. This recognition is done by creating provisions. In my opinion, to present a true and fair view of the financial statements of the organization it is necessary to prepare provisions. Further, it also helps a company to combat all the future financial disruptions when these probable losses materialize.

9. Assume That The Fixed Assets Purchased By The Company Have Significantly Increased In Value Owing To Capital Appreciation. Please Tell How Would You Disclose This In The Financial Statements?

This question checks your understanding of the various types of accounting concepts and principles.

Sample Answer

Sir, the assets are recorded in the financial statements at their acquisition cost following the accounting concept of Historical cost. This acquisition usually represents the purchase cost of the asset and all the ancillary expenses that are incurred till the asset is put to use.

The financial statements are made on a cost basis and do not reflect the market prices of the assets. Hence, I will not record the capital appreciation in the fixed assets of the company.

10. What Are Stock Repurchases? Aren’t They A Complete Waste Of Financial Resources?

This question checks your understanding of the share buyback, which is often done by promoters to enhance their stake in the enterprise.

Sample Answer

Sir, share buyback or stock repurchase refers to the already issued equity shares, which are bought back by the promoters of the company. This is usually done to:

  • Gain a controlling interest in the affairs of the company
  • Gain more shareholding, and thus more dividends
  • Reduce the number of equity shares that are outstanding in the secondary market
  • Improvement of financial ratios, especially EPS, DPS and P-E (Price Earning) ratio

11. Assume A Situation In Which Your Reporting Manager Tells You To Enter A Receipt Of Cash Expense In The System That Has No Documentary Evidence. How Would You React In This Situation?

This is a situation reaction test in which your workplace ethics are tested.

Sample Answer

Sir, as per the accounting ethics and also the various established guidelines, an accountant is usually not required to punch any financial transaction into the system that is not verifiable or is not backed by any documentary evidence, such as a receipt, voucher, cash memo, etc.

I follow these guidelines and even feel that I also have a responsibility towards the company investors. Hence, I would not enter this transaction into the system, until, I am given written approval by the head of the department.

12. What is Your Understanding Of The Matching Concept?

This question tests your understanding of the various accounting concepts.

Sample Answer

Sir, business organizations are required to prepare their books of accounts as per the matching concept, which states that all the incomes earned by the company in a particular period of time should match with the corresponding expenses that are incurred to earn that income.

For example, a company made the sale of 5,000 units in the month of March 2022. Then, all the sales commission paid by the company in respect of these sold units must be recognized by the company in March 2022 itself. The recording must not cross the ongoing fiscal year.

13. Gone Are The Days When Ledgers Were Prepared In Red Books. We Are A Modern Organization and Record All Our Financial Transactions Using Specialized Accounting Software. Can You Name Some Of The Best Software To Record The Financial Transactions?

This question checks whether or not you are acquainted with the latest accounting software.

Sample Answer

Sure, Sir, These are:

  • Freshbooks
  • Quickbooks Online
  • Wave
  • Xero
  • Zoho accounts

14. The Business Organizations Are Required To Depreciate Their Assets Over Their Useful Life. What Are The Several Methods Of Charging Depreciation and Why Companies Charge Them?

This question checks your understanding of the different methods of charging depreciation as well as the corresponding accounting concept.

Sample Answer

Sir, owing to the concept of “going concern”, the business organizations are required to charge depreciation over the useful life of the fixed assets. These assets are depreciated using several methods, such as:

  • Written down value method (WDV)
  • Straight-line method (SLM)
  • Sum of the years’ digits method
  • Units of production method, etc.

15. What Are Your Views On Maintaining Confidentiality Of Financial Information Of The Company?

Through this question, an interviewer wants to know your opinion on maintaining the sanctity of the financial information of the company.

Sample Answer

Sir, every sensitive information including the financial affairs of the company must be properly managed and must never be disclosed by any employee of the company to any outsider. Such unethical acts usually cause a lot of business harm, which usually translates into business losses. Being a committed individual, be assured that, I will never engage myself in any such activity.

16. What Is Your Dream Job?

Through this question, an interviewer wants to know what are your various expectations and desires from your employer. For example, an employee might dream to work in an organization that offers free lunch and beverages to its employees. Be specific while answering this question and share those dreams, which are realistic and not at all offending in nature.

17. When Can You Start Working With Us?

In an ideal response to this question, just share the date or after which you can start working with the company. Further, this question does not guarantee your selection, hence, never interpret it in that way.

18. What Are Your Salary Expectations?

It is common for the interviewer to ask about your salary expectations during the interview session itself. To give a relevant reply, just research your industry and note down the different salaries offered to other account executives. Post this, calculate an average of these salaries and base your answer upon it.

19. Stress Management Is Our Common Requirement As Well As An Expectation From All Our Employees. What Techniques Do You Adopt To Manage Your Workplace Stress?

You do something daily, and that would surely burn you out. Deep breathing, positive pep talk, motivational counseling, yoga, meditation, etc. are some of the best techniques to manage workplace stress.

20. Accounting Is A Continuous Profession and Would Require You To Perform Several Business Tasks In A Single Day. How Do You Prioritize Your Tasks?

To give a perfect reply to this question just state your prioritization technique. Most employees prefer to arrange their tasks on the basis of difficulty level, time consumption, or urgency level. However, you are free to state whatever works for you, but never forget to justify your selection using a real-life work experience.

21. Do You Have Any Questions For Us?

This is the most preferred and followed way of closing out an interview session. This interview question is the last of the lot and gives a candidate one last opportunity to impress the interviewer. Hence, always attempt this question and ask a few relevant counter-questions from your interviewer that are based on your doubts in regards to the organization. its structure, the work environment, etc. For a better understanding, read out the sample questions mentioned below:

Sample Questions

  • What is the type of organizational hierarchy followed by the organization? Please also shed some light on the flow of communication followed by the company.
  • Please share a list of all the incentives and allowances that are offered by the company to its regular employees.
  • Can you tell some unique benefits that this company offers to its employees?

Download the list of questions in .PDF format, to practice with them later, or to use them on your interview template (For Account Executive interview):

Screenshot 2022 09 14 222105

References

  1. https://onlinelibrary.wiley.com/doi/abs/10.1111/gwao.12684
  2. https://journals.sagepub.com/doi/abs/10.1177/0049124119852382
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