Important Accounting Interview Questions & Answers

Accounting Interview Questions & Answers

  1. What is Accounts?

Answer: Accounts refers to the preparation and presentation of financial data in the format of debit and credit.

  1. What are the different types of accounts and three golden rules of accounts?

Answer: There are three types of account:

Personal Account: Relates to a person with whom a business deals. Example-Ravi, Tata Iron, Mohan

Real Account: Relates to assets. Example: Machinery, Furniture, Cash

Nominal Account: Relates to income, gain, expenses, and loss. Example: Salary, commission, Rent

 Golden Rules of Accounting

Personal Accounts

. Debit the Receiver

. Credit the Giver

Real Accounts

. Debits what comes In

. Credit what goes Out

Nominal Accounts

. Debit all Expenses & Losses

. Credit all Gains & Incomes

3. Different between Capital Expenditure and Revenue Expenditure?

Capital Expenditure– Capital Expenditure is for fixed assets, which are expected to be productive assets for a long period of time.

Example- Land, Building, Machinery ETC.

Revenue Expenditure- That Expenditure whose benefits expire with the same accounting year in which it’s assured.

Example- Salary, Rent, Telephone ETC.

4. How many types of Accounting concepts?

Answer: There are seven types of Accounting concept

Separate Entity Concept

Materiality Concept

Money Measurement Concept

Going Concern Concept

Accrual Concept

Matching Concept

Dual Aspect Concept

  1. What is BRS? Tell some of the reasons for the differences between cash book and bank statement?

Answer: It is a statement that is used to reconcile the difference between Cashbook and bank statement.

  1. Cheques issued but not yet presented for payment.
  2. Cheques paid into the bank but not yet cleared.
  • Interest charged by the bank not entered in the Cashbook.
  1. Different between Trading Company & Manufacturing Company?

Answer: Trading Company is a company whose business is buying and selling of goods whereas,

A manufacturing company produces goods through the process of manufacturing and sells it.

  1. How many types of Cash books?

Answer: There are three types of Cash Book

Single column cash book Double column cash book Triple column cash book

Single column cash book: Records cash Transaction only

Double column cash book: Records Cash & Bank Transaction

Triple column cash book:  Records Cash, Bank & Discount Transaction

  1. 8. What is Depreciation, different types of depreciation?

Answer: Depreciation in the value of fixed assets is known as Depreciation.

Types of Depreciation

  • Straight-line method 2) Diminishing value method
  • Annuity method 4) Machine hour rate method

5) Revaluation method 6) Sum of the year’s digit method

  1. What is the transaction?

Type of transaction?

Answer: A transaction is an agreement between a buyer and a seller.

1 Purchase

2 Sale

3 Payments

4 Receipts

  1. Define Assets? Explain the various types of Assets?

Answer: Any think which we own benefit of the business is called assets.

1 Fixed Assets

2 Current Assets

3 Fictitious Assets

  1. Define liabilities? Explain the various types of liabilities?

Answer: liabilities are a debt which is must pay by the company.

1 Fixed liabilities

2 Current liabilities

3 contingent liabilities

  1. What are the three main financial statements?

Three main financial statements are income statements, balance sheets, and cash flow statements.

Income Statement: it presents a summarized view of revenue, income, profit, and loss of a particular accounting period.

Balance Sheet: B/S would show them as on date assets, liabilities & capital position of a business.

Cash Flow Statement: it shows the movement of cash and cash equivalents for a business during an accounting period.

  1. What is the difference between a trade discount & a cash discount?
Trade Discount


Cash Discount
1.   It is a discount provided by the supplier of goods/services on the list or catalog prices of the goods supplied.1.   It is a discount allowed by the supplier of goods or services to the buyer from the invoice price.
2.   It is provided due to business considerations such as trade practices, large quantity orders, etc.2. it is provided as an incentive or a motivation in return for paying a bill within a specified time.
3.   Trade discount is not separately shown in the books of accounts, and all transactions recorded in purchases or sales book are in net amount only.3. A cash discount is shown separately in the book, it is shown as an expense in the profit and loss A/C.

4.   Trade discount is allowed on both credit and cash transactions.4. A cash discount is only allowed on cash payments.
5.   trade discount is given on the basis of purchase.5. A cash discount is given on the basis of payment.

  1. Full-Form

BRS- Bank Reconciliation Statement

GST- Goods and Services Tax

ESI- Employee State Insurance

NEFT- National Electronic Funds Transfer

GAAP- Generally Accepted Accounting principle

PAN- Permanent Account Number

SLM- Straight Line Method
15. Different between Revenue and Expense?

Revenue– Revenue means the money received from the customer for the sale of goods & provides service.

Expense- Expense means payment of money for any service of goods purchase. It is an outflow of money.

  1. What are the contents of the balance sheet?

Answer: The contents of the balance sheet are:

  1. Capital & liabilities
  2. Capital
  3. Reserve
  • Profits/loss
  1. Loans-long & short term
  2. Advances have taken
  3. Current liabilities
  • Provision
  1. Assets
  2. Fixed Assets
  3. Investments-long term & short term
  4. Current Assets
  5. Stock
  6. Debtors
  • Cash & bank balances
  1. Advances are given
  2. Other
  3. A purchased computer for office use worth Rs 50000 by cheque of SBL. Pass the Journal Entry.

Answer: Computer A/C———Dr 50000

To SBI A/C                                                50000

  1. Purchase 50 shares from ITC LTD @300 each in the name of business through owners’ debit card.

Answer: Investment A/C——–Dr 15000

To Capital A/C        15000

  1. CFL of Rs 1000 purchase from A.K Electrics for replacing tube light by cash.

Answer: Electrical Equipment A/C——–Dr 1000

To Cash A/C                                                   1000

  1. What is the journal entry for goods given in charity 1,00,000?

Answer: Charity A/C——–Dr 100000

To purchase A/C      100000

  1. What is the journal entry for Free Samples 10,000?

Answer: Advertisement A/C——–Dr 10000

To purchase A/C                         10000

  1. Withdrew cash from the business for personal use 500.

Answer: Drawings A/C——–Dr 500

To cash A/C                     500

  1. What is a contra entry?

Answer: which accounting entry is recorded on both the debit and credit side of the cashbook is known as the contra entry.

  1. What is Stock?

Answer: Unsold item at the time of the period is called stock.

  1. What is the Voucher?

Answer: A Documentary Evidence in support of Transaction is called a voucher.

  1. What is Bad Debt, provision for Bad Debt, Outstanding Expenses, Prepaid Expenses, Accrued income?

Bad Debt: When the amount is unrecovered from debtors it is known as bad debt.

Provision for bad debt: It is estimated loss in which bad debt is an actual loss.

Accrued income: Income which is a due but not received is called accrued income.

Outstanding Expenses: Any expenses which are incurred in this financial year, but could not be paid within this year, then it is outstanding expenses.

Prepaid Expenses: Any expenses which are paid in advance but expenses will be incurred next year, it is called prepaid expenses.

27: What is the rectification of errors?

Answer: Error is unintentional mistakes. It must be rectified before the finalization of the account.

28: What items are included in the profit and loss account?

  1. Salaries
  2. Rent
  3. Interest
  4. Commission
  5. Trade Expenses
  6. Stationary
  7. Traveling Expenses
  8. Depreciation
  9. Trade Discount
  10. Carriage Out
  11. Income Tax
  12. Discount Allowed
  13. Differentiate public and private Accounting?

Answer: Public accounting is a type of accounting that is done by one company for another company.

Private accounting is done for your own company.

  1. Differentiate Accounting & Auditing?

Answer: Accounting is all about recording daily business activities while auditing is the checking that whether all these events have been noted down correctly or not.

salman khan

Written by worldofitech

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