Interview Questions and answers for Accountant as freshers or experienced candidate.
Q.1 What are the functions of accounting?
Ans: Functions of Accounting are
1.Control of financial policy, and formation of planning
2.Preparation of the budget,
3.Cost control, evaluation of employees’ performance,Prevention of errors and frauds.
4.Analysis of the interested parties, including the management.
Q.2 What are the rules of Debit and Credit?
Ans: There are three rules
- Debit what comes in, Credit what goes out.
- Debit all expenses and losses, Credit all incomes and gains.
- Debit the receiver, Credit the giver.
Q.3 What are the 5 roles of accounting?
Ans: There are five basic roles or functions within the department:
- Accounts payable.
Q.4 What is the meaning of TDS? How it is charged?
Ans: TDS stands for tax deducted at source. As per the Income Tax Act,any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.
Q.5 What is accounting loss?
Ans: In financial accounting, a loss is a decrease in net income that is outside the normal operations of the business. Losses can result from a number of activities such as; sale of an asset for less than its carrying amount, the write-down of assets, or a loss from lawsuits.
Q.6 What are the 7 branches of accounting?
Ans: The famous branches of accounting include
- Financial accountant,
- Managerial accountant
- Cost accounting,
- Forensic accounting.
Q.7 Why is Closing Stock not Shown in Trial Balance?
Ans: Closing stock is a part of purchases & trial balance already includes purchases,hence if the closing stock is shown as a separate item it will double count and result in an error.
Q.8 What are the three main types of accounts?
Ans: Real – All assets in business either tangible or intangible classify as real accounts
Personal – Accounts related to a person, entity or any legal body, etc. are called personal accounts
Nominal – All accounts related to expenses & losses or incomes & gains fall under this category.
Q.9 What are the important terms used in balance sheet?
Ans :1. Assets
1.Current assets and fixed assets Tangible assets and Intangible assets
2.Equity is a claim which can be enforced against the assets of the firm in the court. Thus, equity refers to a claim held by an owner only, A creditor only, An owner and the creditor both.
3.Liability-Current Liability Long Term Liability or fixed Liabilities Contingent Liabilities.
Q.10 What items are included in Profit and Loss account?
Ans: Salaries rent rates and Stationery Advertisement carriage out, freight out, carriage out repairs.Travelling expenses, Samples Depreciation, Apprentice premium Life insurance premium Insurance premium Income tax Interest on capital and drawings loss.
Q. 11 What is debit note and credit note? What is the difference between them?
Ans: Debit note is an intimation sent to a person dealing with the business that his account is being debited for the purpose indicated therein. It is a note made out with a carbon duplicate. The original one is sent to the party to whom the goods are returned and the duplicate copy is kept for office record.Credit note is an intimation sent to a person dealing with the business that his accountant is being credited for the purpose indicated there.
Q.12 What is the difference between mercantile system and cash system of accounting?
Ans: In mercantile system, expenses are considered as expenses during the period to which they pertain.Similarly, incomes are considered to be incomes during the period to which they pertain. This system of accounting is considered to be more ideal. On the hand, in cash system, expenses are considered to be expenses only when they are paid for and the incomes are considered to be income when they are actually received. This system of accounting is mainly used by the organizations established not for earning the profits.
Q.13 Why is Closing Stock not Shown in Trial Balance?
Ans: Closing stock is a part of purchases & trial balance already includes purchases, hence if the closing stock is shown as a separate item it will double count and result in an error.
Q.14 Explain each real account and nominal account with examples.
Ans: Real Account is an account of assets and Liabilities.
Types of Real account
Nominal Account is an account of incomes or expenses.
Types of Nominal account
2.Commission paid/Received account,
3.Telephone expenses account,
5.Printing & Stationery account,
6.Interest Paid/Received account.
Q.15 What are the roles and responsibilities of accountant?
Ans: 1. Provides financial information to management by researching and analyzing accounting data; preparing reports.
2.Prepares asset, liability, and capital account entries by compiling and analyzing account information.
3.Documents financial transactions by entering account information.
4.Recommends financial actions by analyzing accounting options.
5.Summarizes current financial status by collecting information; preparing balance sheet, profit and loss statement, and other reports.
6.Substantiates financial transactions by auditing documents.
7.Maintains accounting controls by preparing and recommending policies and procedures.
8.Guides accounting clerical staff by coordinating activities and answering questions.
9.Reconciles financial discrepancies by collecting and analyzing account information.
10.Secures financial information by completing database backups.
11.Maintains financial security by following internal controls.
12.Prepares payments by verifying documentation, and requesting disbursements.
13.Answers accounting procedure questions by researching and interpreting accounting policy and regulations.
14.Complies with federal, state, and local financial legal requirements by studying existing and new legislation,enforcing adherence to requirements, and advising management on needed actions.
15.Prepares special financial reports by collecting, analyzing, and summarizing account information and trends.
16.Maintains customer confidence and protects operations by keeping financial information confidential.