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What are Accounting Interview Questions?
Accounting interview questions are the questions that the employer, hiring manager, or interviewer can ask for recruiting someone for the job position of an entry-level accountant, chartered accountant, or any post associated with the accounting industry.
The competition level in the accounting industry is so high that the interviews are getting more strenuous and more challenging every day. In the accounting industry, an employer asks accounting interview questions to judge the skills and knowledge of the prospective employee.
But what kind of questions will be asked in the interview can give stress to the candidate?
So, to help these candidates, here are twenty accounting interview questions along with their answers that can or should be asked by an employer for recruiting someone for performing accounting roles.
20 Accountant Interview Questions
Your hiring manager might test your knowledge of basic as well as complex accounting with a different range of questions that will let them be aware of your hard as well as soft skills of being a successful accountant.
Therefore, if you are doing a job search in the field of accounting, you need to be prepared with the answers to these questions and describe them with absolute confidence. So let us be familiar with some of the most common questions and answers for the accountant job position-
1. What do you understand by the terms Accounts Receivable and Accounts Payable?
Answer- Accounts Receivables are those proceeds or payments that a customer has to pay for the goods or items purchased from the company. In comparison, Accounts payable are the payments that the company owes to pay in exchange for any purchase made by the vendor.
2. Give an overview of the three financial statements.
Answer- The three financial statements include a balance sheet, income statement, and cash flow statement. The balance sheet of a company shows the company’s assets, liabilities, and shareholders’ equity. On the other side, the income statement shows the company’s revenues and expenses. When it comes to the cash flow statement, it shows the cash flows from the operating, investing, and financing activities.
3. If I give you a chance of choosing any one financial statement to review the overall health of a company, then which statement would you choose?
Answer- The best choice is the cash flow statement. A cash flow statement provides an accurate picture of the company’s financial health. It shows that how much cash the company is generating. However, all three financial statements are necessary to conclude the company’s health accurately.
4. If I purchased an inventory of INR 200,000 today. Then what will be the impact of this purchase on the income statement?
Answer- There will be no impact of this transaction on the income statement. This transaction will impact only the balance sheet and the cash flow statement.
5. If a company has negative working capital, then what does this mean?
Answer- Negative working capital means that the company has more current liabilities than current assets. This means that a company is facing financial troubles. However, in grocery stores, a customer pays upfront, and usually, inventories move relatively quickly. But, in this industry, the suppliers usually grant 30 or more days to pay the amount. Here, the company receives the cash from customers early before it is needed. So, in this case, having a negative working capital is a sign of efficiency.
6. If you have a tight deadline to finish multiple accounting projects, then how will you manage the work?
Answer- If there are multiple accounting projects with a tight deadline, then time management is the first that one should do. Use time management techniques to quickly and accurately enter the transactions. Another thing can be prioritization. Focus on essential accounting duties. The last thing one should do to meet these tight deadlines is to do multi-tasking. Complete different types of reporting at the same time.
7. How will you handle the clients who don’t have any background in accounting?
Answer- Patience is the key. One should have patience in teaching the skills of accounting to the other person. Rectify the mistakes and provide a fundamental understanding of the accounting concepts.
8. With the use of which strategies will you detect fraudulent entries in a journal or ledger?
Answer- The use of proactive monitoring features in the enterprise planning platform can help to detect fraudulent entries in a journal or ledger. It is better to investigate and double-check the numbers to discover the errors thoroughly.
9. How will you make sure the accuracy of the accounting is maintained?
Answer- The use of every tool and resource to check the work and limit the potential for an error in a transaction. It is better to compare the real-time reports with the credit card statements to confirm the numbers.
10. What is the best Accounting Software?
Answer- Some of the best accounting software is that you should mention her-
- FreshBooks
- Tipalti
- NetSuite ERP
- Zoho Books
- Tally
- FreeAgent
- Sage Business Cloud Accounting
- Microsoft Dynamics GP
- Sage 50cloud, etc.
11. What are the different branches of accounting?
Answer- The three branches of accounting are-
- Financial
- Management
- Cost
12. What is the difference between accounts payable and accounts receivable?
Answer- Accounts payable is the amount that a company owes because it has purchased goods or services on credit from a supplier. It is a liability.
Accounts receivable is an amount that a company has the right to collect as it has sold goods or services on credit to a customer. It is an asset.
13. What are the Revenue Recognition and Matching principles?
Answer- As per the revenue recognition principle, the process and timing of recording revenue and recognizing it as an item in the financial statements based on certain criteria while the matching principle suggests that the timing of expenses need to be matched to the period in which they are incurred instead of when they are actually paid.
14. What is an Accounting Process?
Answer- The process of tracking, summarizing, analyzing, and reporting different financial transactions associated with accounting data and information to share reports with regulators, agencies, and tax collection entities is understood as an accounting process.
15. What are Enterprise Resource Planning ERP systems?
Answer- It is defined as the integrated management of main business processes generally in real-time and mediated by software and technology.
16. What is tally accounting?
Answer- Tally is accounting software that is used by small businesses and shops for managing routine accounting transactions.
17. Can you explain the basic accounting equation?
Answer- As accounting is a process that revolves around assets, liabilities, and capital, the accounting equation can be – Assets = Liabilities + Owners Equity.
18. What is offset accounting?
Answer- It is understood as the process of canceling an accounting entry with an equal but opposite entry. It is used for decreasing the net amount of another account for creating a net balance.
19. Why did you choose to be an accountant?
Answer- You can answer this by giving rational reasons why you opted for the accounting world, plus your answer should also showcase your passion for this field. You may start by saying that you want to be a part of an extensive network of finance and accounting professionals where you want to accept or experience a challenging role and explore new opportunities with all kinds of career options in the domain of finance and accounting
20. What skills do you consider important for an accountant?
Answer- Some of the skills that are important here are-
- Excellent at math
- Problem-solving skills
- Structured work style
- Strong analytical skills
- Aptitude for technology, etc.
Wrap Up!
So, these were some of the common questions that can be asked in an accountant interview. The demand for skilled accountants is there in the industry of different domains.
While preparing for such an interview, you should always read always the job description carefully and do preparations accordingly. Those who have the flair for numbers, spreadsheets, accounting basics & principles will enjoy great career growth as an accountant.
Having doubts about any of the accountancy concepts? Feel free to ask us in the comment section below.
