Hello friends, welcome to learnvern, Today we will see the interview questions.. In practical life you will face the interview. So, to prepare you for the interview here are some accounting questions that can be asked in the interview.
Now, let us see the first question i.e Please define “going concern assumption”? So, what we have to specify is going concern assumption. It states that the business will continue its operation which means business will continue its operation in near future. This implies that the company will not be forced to close its operation and realise its assets at extremely low costs. So, this is the going concern assumption definition.
Now, let us discuss the second question i.e, which accounting methods give you a more perfect picture of your account: “Cash or Accrual”? So, first of all let us understand the question, the question is asking me to select an accounting method which gives a perfect picture. Is it Cash or Accrual? So, the answer is the Accrual method because on a cash basis there are chances that you will ignore the Matching Concept. As in the cash basis, when we receive the money, then we book the receipt and when we do the payment, then we book the expense. Due to this reason, the Accrual method is more favourable.
Let us see the next question, what do you mean by the term “Bad Debt”? Now, the question is asking what do you understand by the term “Bad Debt”? Or Define “Bad Debt” ?
When amount collectable from account receivables/trade debtors is at risk, as it might not be collected or it's confirmed that amount will not be collected. So, the amount which is not collected is called Bad Debt. Are you understanding my friends? The amount which is receivables from our debtor, is confirmed that amount will not be collected is called Bad Debt.
Next question is Please explain Bank reconciliation? i.e What is Bank reconciliation ? Explain it?
In bookkeeping, a bank reconciliation is the process of reconciling bank balance in business’s books of account with balance as per bank statement provided by the bank. So what do we do? We reconcile the two balances, first we balance as per books of account and second we balance as per bank statement which is provided by the bank.
Now, let us see the next question, Question number 5 How payroll is recorded in Books of accounts? Please provide payroll journal
Gross wages debit .. Employers taxes debit.. To employee taxes credit.. To employer taxes credit.. To net wages credit.. so, this is how we will specify the payroll journal.
Question number 6 What are the main components of a “Cash flow statement” ? Always remember this my friends, it has three main components. First is, cash from operating activities, second is, cash from investing activities and third is, cash from financing activities. So, remember these three components of cash flow statements.
Now, let us discuss the next question, i.e question number 7 Give two reasons for difference in bank balance as per statement and balance as per books of accounts. So, we have to state two reasons due to which the balance is not matching.
Reason 1 is Bank charges debited by the bank but it is yet to be recorded in the books of accounts.
Reason 2 is Cheque directly deposited by the customer. When we sell our product to someone and the customer directly transfers the money into the bank account, which is yet to be recorded in the books. So, you can give this to two reasons.
Now, let us discuss the last question, Explain “Prepayment of expenses” ?
Prepayment of expenses means payment of expenses before it becomes due, which means it is not yet due but we are doing advance payment. And it will be shown under “current assets” in the balance sheet.
These are some interview questions which will help out when you face the practical interview.
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