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Accounting Interview Questions and Answers

Master your accounting job interview with our comprehensive guide featuring 90+ expert questions and answers. Download the free PDF for offline preparation.

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Complete Accounting Interview Guide

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When you are interviewing for an Accounting job, in addition to the basic interview questions, you will be asked more focused and specific accounting questions about your education, skills, certifications, languages, and accounting software expertise.

Preparing for an accounting interview can be a daunting task, especially if you are unsure about the types of questions that might come your way. Whether you are a recent graduate or a seasoned professional, acing an accounting interview requires a solid understanding of financial principles and the ability to articulate your knowledge effectively.

The hiring manager will want to know, in detail, how equipped you are to handle the position. Prepare by considering the job qualifications - what skills, knowledge, and experiences you'll need to be successful.

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Top 10 Accounting Interview Questions and Answers

Why did you select accounting as your profession?

Well, I was quite good in accounting throughout but in my masters, when I got distinction I decided to adopt this field as a profession.
Do you have any professional experience in this field?

Yes, I have worked as an accountant at two different places.
Did you use accounting applications at your previous companies or prefer working manually?

Yes, I have used Advanced Business Solutions and AME Accounting Software in my previous jobs.
Can you name any other accounting application?

Yes, I am familiar with CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.
Which accounting application do you prefer most and why?

I think all are good though but Microsoft Accounting Professional is best because it offers reliable and fast processing of accounting transactions that saves time and increases proficiency.
What is the abbreviation for the accounting terms debit and credit?

Debit abbreviation is "dr" and credit abbreviation is "cr".
How many types of business transactions are there in accounting?

There are two types of transactions in accounting: revenue and capital.
What is a balance sheet?

It is a statement that states all the liabilities and assets of the company at a certain point.
Have you ever heard about TDS? What is it?

Yes, TDS abbreviates Tax Deduction at Source.
In a balance sheet, where do you show TDS?

It is shown on the assets section, right after the head current asset.

Top 20 Accounting Interview Questions and Answers

Do you have any idea about Service Tax or Excise?

It is a kind of hidden tax that is included in the service provided by the service provider and paid by the service receiver.
Do you think there is any difference between inactive and dormant accounts?

Yes, both are different terms in accounting. Inactive accounts means that accounts have been closed and will not be used in future as well. While dormant accounts are those that are not functional today but may be used in future.
What is tally accounting?

It is the software used for accounting in small business and shops for managing routine accounting transactions.
How can you define departmental accounting?

It is a type of accounting in which separate account is created for departments. It is managed separately as well as shown independently in the balance sheet.
Define fictitious assets.

These are the assets that cannot be shown or touch. Fictitious assets can only be felt such as good will, rights, etc.
By saying perpetual or periodic inventory system, what do we mean?

In the perpetual inventory system, the accounts are adjusted on a continual basis. In the periodic inventory system, the accounts are adjusted periodically.
In accounting, how do you define premises?

Premises refer to fixed assets that are shown in the balance sheet.
In accounting, VAT abbreviates what?

VAT means Value Added Tax.
Do you possess any knowledge about accounting standards?

Yes, as per my knowledge there are total 33 accounting standards published so far by ICAI. The purpose of these standards is to implement same policies and practices in any country.
What is ICAI?

It is the abbreviation of Institute of Chartered Accountants in India.

Top 30 Accounting Interview Questions and Answers

How can you explain the basic accounting equation?

We know that accounting is all about assets, liabilities and capital. Therefore, the accounting equation is: Assets = Liabilities + Owners Equity.
Define Executive accounting.

It is a type of accounting that is specifically designed for the business that offers services to users.
Define Public accounting.

Public accounting offers audits and CPAs to review company financial records to ensure accountability. It is for general public.
What is a CPA?

CPA stands for Certified Public Accountant. To become a CPA, one should have to do many other qualifications as well. It is a qualification with 150-hour requirement.
What do you think is a bank reconciliation statement?

A reconciliation statement is prepared when the passbook balance differs from the cashbook balance.
Differentiate Public and Private Accounting.

Public accounting is a type of accounting that is done by one company for another company. Private accounting is done for your own company.
What is project implementation?

Project implementation involves six steps: Identify Need, Generate and Screen Ideas, Conduct Feasible Study, Develop the Project, Implement the Project, Control the Project.
Do you think Accounting Standards are mandatory and why?

Yes, accounting standards play a very important role to prepare good quality and accurate financial reports. It ensures reliability and relevance in financial reports.
Can you name different branches of accounting?

There are three branches of accounting: Financial Accounting, Management Accounting, and Cost Accounting.
Differentiate Accounting and Auditing.

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

Top 40 Accounting Interview Questions and Answers

Define dual aspect term in accounting.

The dual aspect concept states that every transaction has two sides. For example, when you buy something, you give the cash and get the thing. Similarly, when you sell something, you lose the thing and get the money.
What do we mean by purchase return in accounting?

It is the term introduced in the records for every defective or unsatisfactory good returned back to its supplier.
Define the term material facts in accounting.

Material facts are the bills or any document that becomes the base of every account book.
Have you ever prepared MIS reports and what are these?

Yes, I have prepared few MIS reports during my previous jobs. MIS reports are created to identify the efficiency of any department of a company.
Define company's payable cycle.

It is the time required by the company to pay all its account payables.
Define retail banking.

It is a type of banking that involves a retail client. These clients are normal people and not organizational customers.
How much mathematics knowledge is necessary in accounting?

Not much knowledge but basic mathematical background is required for operations like addition, subtraction, multiplication, and division.
Define bills receivable.

All types of exchange bills, bonds and other securities owned by a merchant that is payable to him are called bills receivable.
Define depreciation and its types.

Depreciation means that a value of an asset is decreasing as it is in use. It has two types: Straight Line Method and Written Down Value Method.
Differentiate between consignor and consignee.

Consigner is the owner of the goods or the person who delivers the goods to the consignee. The consignee is the person who receives the goods.

Top 50 Accounting Interview Questions and Answers

Define balancing in accounting.

Balancing means to equate both sides of the T-account i.e., the debit and credit sides must be equal/balanced.
How much statistics knowledge is necessary in accounting?

You must be very good at statistics if you want to do well in accounting. Otherwise, with minimum knowledge you cannot manage your day-to-day transactions effectively.
Define Scrap value in accounting.

It is the residual value of an asset. The residual value is the value that any asset holds after its estimated lifetime.
Define Marginal Cost.

The estimated cost of additional inputs to produce an additional unit of output is the marginal cost.
Define Partitioning in accounting.

It is a kind of group made on the basis of same responses by a system.
Differentiate between provision and reserve.

Provisions are liabilities or anticipated items such as depreciation. Reserves are the profits of any company, and a part of that profit is placed back to the business to keep it sustainable.
Define Offset accounting.

Offset accounting decreases the net amount of another account to create a net balance.
Define overhead in terms of accounting.

It is the indirect expenditure of a company such as salaries, rent dues, etc.
Define trade bills.

Trade bills are the documents generated against each transaction.
Define fair value accounting.

As per fair value accounting, a company has to show the value of all of its assets in terms of price on balance sheet on which that asset can be sold.

Top 60 Accounting Interview Questions and Answers

Explain what is a compound journal entry.

A compound journal entry is just like other accounting entry where there is more than one debit, more than one credit, or more than one of both debits and credits.
What are the accounting events frequently involved in compound entries?

Record multiple line items in a supplier invoice, record all bank deductions, record all deductions and payments related to payroll, record account receivable and sales taxes related to a customer invoice.
Mention the types of accounts involved in double entry book-keeping.

Double entry book-keeping involves five types of accounts: Income accounts, Expense accounts, Asset accounts, Liability accounts, and Capital accounts.
Mention what is a General ledger account.

The General ledger account is where the company records all the information for its various expenses and income types into separate accounts.
What is the general classification of accounts that ledger accounts involve?

Assets, Liabilities, Stockholders' equity, Operating revenues, Operating expenses, Non-operating revenues and gains, Non-operating revenues and losses.
Mention what things will not be included in bank reconciliation statement.

Direct payments made by bank not entered in Cash book, Cheques deposited but not cleared, Cheques dishonoured not recorded in cash book, Wrong debits given by bank, Bank Charges or Interest debited by bank.
Under the accrual basis of accounting, when are revenues reported?

When services or goods have been delivered, then revenues are reported in the accounting period.

Top 70 Accounting Interview Questions and Answers

Under what type of account does unearned revenues fall?

Unearned revenues fall under "Liability" account.
Will the account "Cash" be credited or debited when a company pays a bill?

The account "Cash" will be credited when a company pays a bill.
What is assets minus liabilities?

Assets minus liabilities equals owners' equity or stockholders equity.
Explain the difference between accumulated depreciation and depreciation expense.

Accumulated depreciation is the total amount of depreciation taken on assets up to the balance sheet date. Depreciation expense is the amount reported on the income statement for the specific period.
List some examples of liability accounts.

Accounts Payable, Accrued Expenses, Short-term Loans Payable, Unearned Revenues, Installment Loans Payable, Current Portion of Long-term Debt, Mortgage Loans Payable.
Explain how you can adjust entries into accounts.

Adjust entries into five categories: Accrued expenses, Accrued revenues, Deferred revenues, Deferred expenses, Depreciation expense.

Top 80 Accounting Interview Questions and Answers

Mention what is Bank Reconciliation.

Bank reconciliation is a process done by a company to ensure that the company's records are correct and that the bank's records are also correct.
Mention what is "deposit in transit".

A deposit in transit is checks and cash that have been received and recorded by an entity, but which have not yet been entered in the bank's records.
Explain what is an over accrual.

An over accrual is a condition where the estimate for an accrual journal entry is too high.
Mention what is account receivable.

Short term amounts due from buyers to a seller who have purchased goods or services on credit.
Explain the activities included in Cash Flow Statement.

Operating activities, Investing activities, Financial activities, and Supplemental information.
Mention where accruals generally appear on the balance sheet.

Accrued expenses are recorded within the "current liabilities section" of the balance sheet.

Top 90 Accounting Interview Questions and Answers

Deferred taxation is a part of which equity?

Deferred taxation is a part of owner's equity.
What does the investment of personal assets by the owner do?

The investment of personal assets by the owner will increase total assets and increase owner's equity.
What is the equation for Acid-Test Ratio in accounting?

Acid-Test Ratio = (Current assets - Inventory) / Current Liabilities
List things that fall under intangible assets.

Patents, Copyrights, Trademarks, Brand names, Domain names.
Mention what is trial balance in accounting.

Trial balance is an accounting report that lists the balances in each of an organization's general ledger accounts.
Define what is Bad debt expense.

Bad debt expense is the amount of an account receivable that is considered NOT to be collectible.

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