Accounting Interview Questions

Q1. From the bank’s perspective, what do the terms “debit” and “credit” entail?

 Answer:

Rules for debit and credit are similar in all occasions; generally, the receiver is debited and the giver is credited. When we make deposits, we debit the bank, because the bank receives the deposit with a view to act as custodian of our money. And when we require funds, we either credit the bank or we become indebted to it.

 Q2. What is the difference between a consigner and a consignee?

 Answer:

The consigner delivers the goods to the consignee for sales purposes.

 Q3. What is the difference between PO-able invoice and non-PO-able invoice?

 Answer:

Normally, when we want to purchase goods from vendors, we initially release the purchase order to the vendor (PO-able invoice). Then, the vendor supplies goods with the invoice, for which (and only which) we pay. However, a non-PO-able invoice label is assigned to the sort of invoice for which no purchase order was raised (e.g. telephone bills, Electric bills, Water bills etc.).

 Q4. What is “FBT”?

 Answer:

FBT formerly symbolized Fringe Benefit Tax: the tax payable by the employer on the amenities provided to employees, vehicle maintenance, telephone bills, and travelling. The FBT, abolished in 2009, included conveyance charges on 20% of the expenditure at the rate of 30% tax; and this tax was not customarily deducted from the gross total income of the business organization.

 Q5. Can you give a sample process flow for the Procure-to-Pay Cycle?

 Answer:

Check on hand availability in inventory.

  1. Create requisition.
  2. Create the rfq (request for quotation).
  3. Create quotations.
  4. Analyze the quotes.
  5. Create purchase order.
  6. Send purchase order to supplier.
  7. Receive goods.
  8. Book invoice.
  9. Pay supplier.

 Q6. Delineate an invoice discrepancy that you discovered and the method by which you resolved the discrepancy.

 Answer:

One may have entered an incorrect amount, an incorrect date, or an incorrect account code combination. If the amount entered does not fit the purchase order, the system would place an embargo on the invoice, which would have to be released before proceeding. And if there is no matching purchase order and you have entered wrong amount that has been approved, you could reverse the distribution line and create a fresh line for the correct amount. In addition, in each company, there exist certain criteria for the procession of bills; certificates, original bills, and the like must be filled on, otherwise the bill would not be processed.

 Q7. Describe the Accounts Payable component.

 Answer:

The Accounts Payable application component records and manages accounting data for all vendors. It is also an integral part of the purchasing system, as deliveries and invoices are managed according to vendors. The system automatically triggers postings in response to the operative transactions. In a similar fashion, the system supplies the Cash Management application component with figures from invoices in order to optimize liquidity planning.

 Q8. What is a Parked Report?

 

Answer:

Typically, parked reports occur, when one uploads invoices into SAP through spreadsheet uploads; in order to verify the data entered, SAP provides the opportunity to change the fields until the data have been posted.

 

Q9. What are the main types of assets?

 

Answer:

There exist three main types of assets: fixed assets, current assets, and fictitious assets.

  • Fixed assets are assets used by the company for a long period of time. They include tangible assets and intangible assets.
    • Tangible assets are assets which we can physically experience, such as land, buildings, foliage, machinery, furniture, fixtures, and fittings.
    • Intangible assets are assets that cannot be physically experienced, such as patents, copyrights, trademarks, etc.
  • Current assets are assets that can be easily converted into cash within one year, including cash in hand, cash at bank, bills receivable, stock, etc.
  • Fictitious assets represent the set of expenses initiated upon the commencement of the firm (capital expenditure), including preliminary expenses, discount on issue of debenture/shares, underwriting commission, etc.

 

Q10. Is cost-accounting an essential tool of management?

 

Answer:

Yes, it is. It aids management in decision-making and provides management with a better insight into operations in order to gain effective control over costs. Cost-accounting also permits the preparation of financial statements without physically counting goods.

                                                                                                                           

 

Q11.What is CMMI?

 

Answer:

Capability Maturity Model Integration (CMMI) is a process improvement approach that provides organizations with the essential elements of effective processes. It can be used to guide process improvement across a project, a division, or an entire organization. Moreover, CMMI integrates traditionally separate organizational functions, sets process improvement goals and priorities, provides guidance for quality processes, and provides a point of reference for appraising current processes.

 

Q12. What does BEP signify in Cost-Accounting?

 

Answer:

The Break-Even Point (BEP) refers to the point at which the company’s total revenue equals the company’s total expenditure. If the company sells or produces beyond this point, profits would accrue; but selling below this point would create losses. In brief, the BEP is the point at which there is both no profit and no loss.

 

 

Q13. What does the abbreviation SOX represent?

 

Answer:

The abbreviation SOX represents Sarbanes Oxley, and it is the act that provides information about a company’s finance & accounting to the public. It roughly translates into “finance & accounting disclosure of information.”

 

Q14.What is reconciliation in accounting?

 

Answer:

In general, reconciliation is tantamount to matching entries by comparing two different accounting records. In my accounting area, there exists a major reconciliation service known as Bank Reconciliation Service (BRS).

 

Q15. What is the trail balance?

 Answer:

This is a statement prepared on a particular day (e.g. the last day of the month) and extracted from the various accounts in a ledger to check the mathematical accuracy of books of accounts. The sum total of debit balance must be equal with sum total of credit balance; otherwise, the books of accounts would not be mathematically correct. Thus, the trail balance is essentially the source data to prepare the final accounts.

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