Accounting is from a commerce background, an evergreen profession. It is a way of assembling all the financial information of a company.
Financial information conveys to us the performance of the company or business in past days. It helps in knowing the status of the company in the business industry and the cash credited and debited from the company.
Accounting is a way of recording all the financial information about a company. This information is later used to make decisions for the company or business.
The Best 21 Accounting Interview Questions To Scale Up Marks
1. What are some skills required for an accountant job role?
Some skills can help make you stand out of crowd:
- Organizational skill
- Time Management
- Leadership qualities
- Upgrading with technology
- Analytical skills
- Good with numbers
- Business awareness
- Flexibility and resilience
2. Define financial accounting?
Financial accounting or public accounting is a particular branch of accounting. It is a process of recording, summarizing, and reporting all money credited and debited in an organization. This helps to analyze the financial health of the company.
Financial accounting assists in knowing the financial stability of any business or company. This will determine the purpose and goals of the company, how many staff the company can afford, and how the organization will operate.
3. What are the different types of accounting software?
Accounting software helps in recording, summarizing, and reporting the data of an organization. Some of the important software that is useful in accounting are as follows:
A spreadsheet is accounting software that is used to run small businesses or organizations. Such software is helpful in organizations that have low transactions.
- Commercial-Available software:
Commercial-available software is important accounting software used all around the world. It has error detection and prevention layers. COTs help in preventing the entry of incorrect information.
- Enterprise Resource Planning Software (ERP):
ERP helps in collecting information from all parts of the organization. This software is mainly used by very big companies for storing their data.
4. Explain the types of business transactions in accounting.
The different kinds of business transactions in accounting are as follows:
- Cash and Credit transaction:
Cash and credit business transactions is a way of exchanging goods with cash, cheque, bitcoins, etc.
- Financial and non-financial transactions:
Financial transactions are a way in which money is required with exchanging goods.
On the contrary, non-financial business transactions do not involve money while exchanging goods.
- Qualitative transaction:
Qualitative transactions are the same as non-financial business transactions. It is not written in financial terms.
- External and Internal business transactions:
External business transactions are kind of cash and credit transactions.
Internal transactions are transacted inside an organization.
5. Explain the different kinds of accounting?
The different kinds of accounting are as follows:
- Financial accounting:
Financial accounting is a very important branch of accounting. This branch of accounting is needed by every private and public company. It is a way of collecting, summarizing, and reporting the financial status of the company.
- Administrative accounting:
Administrative accounting is a branch of accounting that helps plan out the objective of the company. Summarizing, and reporting the data formally, helps the company to improve.
- Tax accounting:
This branch of accounting helps in taxation grounds. Tax accounting is used in making reports for tax returns.
- Management accounting:
Management accounting aims at using information for management purposes. It focuses on making strategies using other branches of accounting. The business strategy is used in making goals for the organization and analyzing the success of the company.
- Forensic Accounting:
This branch of accounting is used in big firms. It helps investigate the financial statement of an individual or any organization. Forensic accounting collects the information, summarizes it, and then sends it to the law firms for investigating companies.
6. Define the term “tally accounting”?
Tally accounting is a kind of accounting software that is helpful for financial accounting. This software helps preserve information of a company for future reference.
7. Which accounting software do you prefer the most?
I prefer QuickBooks, because of its uncomplicated user interface and precision. Although, my expertise lies in Wave and Zoho books for recording financial statements.
8. How can you increase a company’s capital flow?
According to me, the most important things that we can control are the stocks of the company. Working on the status of the company can make the investors believe in it. And with no issues, the investors can happily invest in the company.
Quality of good supplies is a very important part of a company. We can make a good business relationship with the supplies by making payments on time.
9. What is the difference between inactive and dormant accounts?
An account is inactive when you have not transacted any money from the bank account for over a year. Whereas, accounts that have had no financial operation for more than two years are called dormant accounts.
10. How can you prevent your account from becoming inactive or dormant?
We can prevent our bank from becoming inactive or dormant by depositing some cash every three months. Cash withdrawal and online banking transactions can also help prevent your accounts from becoming inactive or dormant.
11. What is the importance of documentation when it comes to accounting?
According to me, documentation is like a pillar that supports any company or organization. Its purpose is to collect and summarize all the financial activities going inside a company.
The recording of the financial activities helps in making decisions for the company or any business. Hence, the documentation of financial withdrawals, any revenues, lending money, etc in accounting helps companies prevent lawsuits.
12. Define TDS?
TDS stands for tax deducted at source. Tax deducted at source means tax collected from your income, asset column, etc. TDS is shown in the assets columns of the balance sheets.
13. Elaborate the difference between a balance sheet and a trial balance sheet.
A balance sheet in financial accounting is an invoice statement. It consists of the equity, assets, and liabilities of an organization. Whereas, the trial balance is the process of summarizing all balances taken from the ledger account.
14. What are the common mistakes that we should prevent in accounting?
Some of the common mistakes that we should prevent in accounting are as follows:
- Absence of organizational skills
- Giving attention to the reconciled accounts
- Forgetting small transactions
- Ignoring backing up the data
- Not using any accounting software
- Forgetting to keep the book up to date
15. How many accounting standards are there?
There are almost 41 accounting standards as per the MCA. And India has two sets of accounting standards.
16. What is departmental accounting?
Departmental accounting is a type of financial accounting. It has a purpose in the companies that do work based on different departmental stores. This accounting helps in knowing each department’s profits.
17. What does the phrase “debit the receiver, credit the giver’’ mean?
“Debit the receiver, credit the giver” is a golden rule, which is used in personal accounts. When an individual receives money from anywhere, it means the money is debited. Whereas when an individual transfers some money, it means the amount has been credited.
18. Define bank reconciliation statement? Mention the four types of bank reconciliation statements.
A bank reconciliation statement also known as BRS is an abstract of bank details of an individual. It is done periodically for knowing the transactions, deposits, and other activities happening in an individual’s bank.
BRS is done to make sure that the bank-related withdrawals are recorded properly.
The major five types of bank reconciliation are:
- Customer Reconciliation
- Bank Reconciliation
- Vendor Reconciliation
- Inter-company reconciliation
- Business-specific reconciliation
19. What is the difference between account payable and account receivable?
Account payable: Accounts payable or AP are sums of money that a company owes to the suppliers or vendors for goods supplies. It is shown in the liability section of the balance sheet.
Account receivable: Account receivable or AR is the sums of money that the customers have to pay to the company. It is paid for the service delivered by the company to the customer. Account receivables are shown in the asset column of the balance sheet.
20. What are some common errors in accounting? How can you prevent errors in accounting?
Some of the common errors in accounting are as follows:
- Numerical Error
- Error of commission
- Error of omission
- Error of compensating
- Error of principle
I believe errors in accounting are inevitable, we cannot prevent errors in accounting. However, we can minimize the number of errors. Using good software, upgrading the accounting book with time, creating budgets, etc can help to minimize the number of errors.
21. What are the applications you use for accounting? Which one is your favorite application?
Some common applications which I use for accounting are as follows:
- CGram software
- Microsoft accounting
- Financial force
- Microsoft Dynamics AX
My favorite application for financial accounting is Microsoft accounting professionals. Microsoft accounting professional has a simpler user interface and is user-friendly.
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