1) What do you mean by financial accounting?
The term financial accounting is used for summarizing and gathering financial data plan to arrange financial reports such as income statement, the balance sheet for the organization’s management lenders, suppliers and other stakeholders.
2) What are some most famous accounting software?
Following is a list of some most famous accounting software:
Tally
FreeAgent
FreshBooks
Sage 50 cloud
Zoho Books etc.
3) What are the skills required for an accountant job role?
Following are some skills that are required to work as an accountant:
Strong analytical skills
Prepared work style
Excellent at Mathematics
Technology geek
4) How many types of business transactions are there in accounting?
There are two types of business transaction happen in accounting:
Revenue Transaction
Capital Transaction
5) What is TDS? And where is it shown in the balance sheet?
TDS stands for Tax Deduction at Source. It is used to gather text from the company from where the employee profits are generated.
TDS is shown on the assets part, right after the current head asset.
6) What do you understand by real and nominal accounts? Explain them with examples.
Real Account: A real account is an account of assets and liabilities. For example, land account, building account, etc. are the example of a real account.
Nominal Account: A nominal account is an account of income and expenses. For example, salary account, wages account, etc. are the example of nominal account.
7) Which accounting platforms have you worked on? Which is your favorite accounting platform?
I have worked with many accounting platforms such as QuickBooks, Microsoft Dynamic GP, Tally, FreeAgent, FreshBooks, Sage 50 cloud, Zoho Books etc. From these accounting platforms, I liked the tally most.
8) What is working capital in accounting?
In accounting, working capital is calculated as current assets minus current liabilities used in day-to-day trading.
9) What do you understand by double-entry bookkeeping in accounting? What are the rules associated with it?
Double-entry bookkeeping is a principle of accounting where every debit has a corresponding credit. In simple words, we can say that the total debited amount is always equal to the total credit amount. This principle specifies that when one account is debited, then another account gets credited at the same time.
10) What do you understand by Tally Accounting?
Tally is accounting software used for accounting in small shops and businesses for running routine accounting transactions.
11) What do you understand by Departmental Accounting?
Departmental accounting is a type of accounting in which a divided account is created for departments. The departmental accounting is managed and shown separately in the balance sheet.
12) What are the abbreviation used for the accounting terms credit and debit?
The abbreviation term used for credit and debit are “cr” and “dr.”
13) What is the difference between inactive and dormant accounts?
In accounting, inactive accounts are the type of accounts that have been closed and will not be used further anymore. On the other hand, dormant accounts are those accounts that are not efficient today but may be used in the future.
14) What do you do to maintain accounting accuracy?
It is very important to maintain the accuracy of an organization’s account as it can result in a huge loss in the case of any error. There are various tools and resources that I have worked on which can be used to limit the potential errors that may occur.
15) What is the difference between “accounts payable (AP)” and “accounts receivable (AR)”?
The following table specifies the differences between the “accounts payable (AP)” and “accounts receivable (AR):
Accounts Payable
Accounts Receivable
The term Accounts Payable specifies the amount a company owes because it has purchased goods or services on credit from a vendor or supplier.
The term Accounts Receivable amount a company has the right to receive because it has sold goods or services on credit to the customer.
Accounts payable is a form of liability.
Accounts receivable is a form of asset.
16) What is the difference between a trial balance and a balance sheet in accounting?
The following table specifies the differences between a trial balance and a balance sheet in accounting:
Trial Balance
Balance Sheet
The trial balance is the list of all balances in a ledger account.
A balance sheet is a statement that shows the assets, liabilities, and equity of a company.
It is used to check the arithmetical accuracy in recording and posting.
It is used to detect its financial position on a specific date.
17) What are some common or standards errors in accounting?
The common or standard errors in accounting are – errors of omission, errors of commission, errors of principle, and compensating error.
18) What do you think about Accounting Standards? Are they mandatory?
We have to follow Accounting Standards to create a precise and accurate financial report. They play a significant role in preparing an excellent and precise financial report.
Accounting Standards are mandatory to ensure reliability and relevance in financial reports.
19) What is the best way to estimate bad debts?
Following are some good ways to estimate bad debts:
Aging analysis
Percentage of outstanding accounts
Percentage of credit sales
20) What do you understand by deferred tax asset, and how is the value created?
A deferred tax asset specifies that the tax amount has been paid or has been carried forward but has still not been recognized in the income statement. The value is created by taking the difference between the book income and the taxable income.
21) What is the equation for the Acid test ratio in accounting?
The equation for the acid test ratio in accounting is:
Acid-test ratio= (Current assets- Inventory)/ Current Liabilities
22) What is the basic accounting equation?
There are three main aspects of accounting:
Liabilities
Assets
Capital
So, we can write the equation in the following form:
Assets= Liabilities + Owners Equity
23) What are the different branches of accounting?
There are three different branches of accounting. They are:
Cost Accounting
Financial Accounting
Management Accounting
24) What is GST? Explain something about it.
GST is an acronym that stands for Goods and Service Tax. This is an indirect tax other than the income tax. The seller applies this tax. The seller charges it to the customer on the value of the service or product they have sold to the customer sold, and then the seller deposits the GST to the government.
25) What do you understand by reconciliation statement in accounting?
In accounting, the bank reconciliation statement or BRS is a form that allows individuals to compare their bank account records to that of the bank. This statement is prepared when the passbook balance differs from the cashbook balance.
26) What do you understand by fictitious assets?
Fictitious assets are abstract assets or intangible assets. The benefit of these assets is derived over a longer period. For example, goodwill, rights, deferred revenue expenditure, miscellaneous expenses, preliminary expenses, etc., are examples of fictitious assets.
27) What is the meaning of purchase return in accounting?
In accounting, the term purchase return specifies a transaction where the buyer of merchandise, inventory or fixed assets returns these defective or unsatisfactory products to the seller.
28) What do you understand by retail banking?
Retail banking is also known as consumer banking. It contains a retail client, where specific customers use local branches of better commercial banks.
29) What do you understand by trade bills in accounting?
In accounting, the trade bills are the bills that are generated against every transaction. Trade bills are required in the documentation process for all kinds of transactions.
30) What is the scrap value in accounting?
In accounting, the scrap value is the remaining value of an asset. Any asset holds this value after its predictable lifetime.
31) What are the three golden rules of accounting?
There are three golden rules in accounting:
Debit what comes in, credit what goes away.
Debit the receiver, credit the giver.
Debit all expenses and losses, credit all incomes and gains.
32) What do you understand by premises in accounting?
In accounting, premises are used to specify fixed assets obtainable on a balance sheet.
33) What is the meaning of offset accounting?
The offset accounting is canceling an accounting entry with an equal but opposite entry. The offset accounting is used to decrease the net amount of another account to create a net balance.
34) What is the meaning of the term company’s payable cycle?
The term company’s payable cycle specifies a time required by the company to pay all its account payables.
35) What is the meaning of fair value accounting?
In accounting, fair value accounting is a practice that a company uses. It is used to show the value of all of its assets in terms of price on the balance sheet on which that asset can be sold.
36) What is the meaning of the statement “Debit the Receiver, Credit the Giver”?
This statement is one of the three golden rules of accounting. This principle is used in the case of personal accounts. If a person is giving any amount either in cash or by cheque to an organization, it becomes an inflow, and thus that person must be credited in the books of accounts. Therefore, when an organization receives the money or cheque, it needs to credit the person paying and debit the organization.
37) What do you understand by Executive Accounting?
Executive Accounting is a popular term in finance, advertising and public relations businesses. This term is specifically designed for service-based businesses.
38) What is ICAI in accounting?
ICAI is an acronym that stands for the Institute of Chartered Accountants in India. The Institute of Chartered Accountants of India is a statutory body established by an Act of Parliament.
39) What do you understand by bills receivable?
As the name suggests, bills receivable are the proceeds or payments that a merchant or a company has to receive from its customers.
40) What do you understand by Balancing in Accounting?
Balancing means equating or balancing both the debit and credit sides of an account.
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41) What do you understand by the term Material Facts in Accounting?
In Accounting, material facts are documents such as vouchers, bills, debit and credit notes, receipts, etc. They serve as the base of every account book.
42) What is Marginal Cost in Accounting?
When a company increases its production, it increases the number of units produced, and then the total cost of output is changed. That change in the cost of an additional unit of output is called Marginal cost
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