Here are 40 common accounting interview questions and answers for freshers:
General Accounting Questions
What is accounting? Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business to help stakeholders make informed decisions.
What are the golden rules of accounting?
Personal Account: Debit the receiver, credit the giver.
Real Account: Debit what comes in, credit what goes out.
Nominal Account: Debit all expenses and losses, credit all incomes and gains.
What is the difference between accounts payable and accounts receivable?
Accounts Payable: Money a company owes to suppliers or creditors.
Accounts Receivable: Money owed to the company by customers for goods or services.
What are the types of accounting?
Financial Accounting
Management Accounting
Cost Accounting
Tax Accounting
Forensic Accounting
What are assets and liabilities?
Assets: Resources owned by a company (e.g., cash, inventory, equipment).
Liabilities: Obligations or debts owed to others (e.g., loans, accounts payable).
Common accounting interview questions and answers for freshers:
What is a trial balance? A trial balance is a statement that lists all the ledger account balances to check if total debits equal total credits.
What is depreciation? Depreciation is the systematic allocation of the cost of a tangible asset over its useful life.
What is the difference between cash and accrual accounting?
Cash Accounting: Revenue and expenses are recorded when cash is received or paid.
Accrual Accounting: Revenue and expenses are recorded when they are earned or incurred, regardless of cash flow.
What is a journal entry? A journal entry records financial transactions in the accounting system, showing debits and credits.
What is the accounting equation? Assets = Liabilities + Owner's Equity.
Practical Knowledge Questions
What is the purpose of a balance sheet? A balance sheet provides a snapshot of a company’s financial position, showing assets, liabilities, and equity at a specific point in time.
What is the difference between a ledger and a journal?
Journal: Records transactions chronologically.
Ledger: Summarizes journal entries into individual account balances.
What is goodwill? Goodwill is an intangible asset that represents the value of a company’s brand, reputation, or customer base.
What are prepaid expenses? Prepaid expenses are payments made in advance for goods or services to be received in the future.
What are contingent liabilities? Contingent liabilities are potential obligations dependent on future events (e.g., lawsuits, guarantees).
Software and Tools
Have you worked with accounting software? As a fresher, I have theoretical knowledge of tools like Tally, QuickBooks, and Excel, and I am eager to learn any specific software used in your company.
What is ERP in accounting? ERP (Enterprise Resource Planning) integrates various business processes, including accounting, into a unified system.
What functions of Excel are useful for accounting?
VLOOKUP, HLOOKUP
Pivot Tables
SUMIF, COUNTIF
Macros
Conditional Formatting
What is Tally? Tally is an accounting software widely used for financial management, GST compliance, payroll, and inventory management.
What is bank reconciliation? Bank reconciliation compares the company's financial records with the bank statement to ensure consistency.
Behavioral Questions
Why did you choose accounting as a career? I enjoy working with numbers and problem-solving, and accounting offers opportunities to contribute to a company’s financial success.
How do you handle tight deadlines? By prioritizing tasks, using time management techniques, and staying focused on the most critical work.
How do you ensure accuracy in your work? By double-checking calculations, using accounting software, and maintaining organized records.
Describe a situation where you worked in a team. During my college project, I collaborated with my peers to create a mock financial report, which taught me teamwork and attention to detail.
How do you handle feedback? I view feedback as an opportunity to grow and improve my skills.
Situational and Problem-Solving Questions
How would you rectify an accounting error?
Identify the error.
Pass a rectification entry.
Ensure the corrected entry balances the accounts.
What would you do if your balance sheet doesn’t balance?
Recheck journal entries and ledger balances.
Verify trial balance figures.
Look for errors like omitted transactions or misposted amounts.
How do you manage confidential financial data? By adhering to company policies, using secure systems, and maintaining professionalism.
How would you handle a discrepancy in a financial report?
Investigate the source of the discrepancy.
Cross-check entries and supporting documents.
Resolve the issue and report findings to the supervisor.
What steps would you take to improve a company’s cash flow?
Monitor accounts receivable and payable.
Optimize inventory management.
Reduce unnecessary expenses.
Advanced Topics for Discussion
What is working capital? Working capital = Current Assets - Current Liabilities. It measures a company’s short-term liquidity.
What is deferred revenue? Deferred revenue is money received for goods or services not yet delivered.
What is the matching principle? The matching principle states that expenses should be recognized in the same period as the revenue they help generate.
What is inventory valuation? Methods include FIFO, LIFO, and Weighted Average Cost to determine the value of inventory.
What is the difference between capital and revenue expenditure?
Capital Expenditure: Long-term investments (e.g., machinery).
Revenue Expenditure: Day-to-day operational expenses (e.g., salaries).
Miscellaneous Questions
What is a profit and loss statement? It shows a company’s revenue, expenses, and profit or loss over a specific period.
What is accrual basis accounting? Accrual basis accounting records revenues and expenses when they are earned or incurred, not when cash is exchanged.
What is the dual aspect concept? Every transaction affects at least two accounts, ensuring the accounting equation stays balanced.
What are provisions? Provisions are funds set aside to cover future liabilities or losses.
What is the role of an auditor? An auditor examines financial statements to ensure accuracy, compliance, and fair representation of a company’s financial position.
These questions and answers will help you prepare for entry-level accounting interviews. Tailor your responses to reflect your education and any practical knowledge or internships you’ve undertaken.
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