Basic Accounting Questions And Answers For Interview Pdf
Are you preparing for an accounting job interview? Do you want to know some of the most frequently asked questions and their answers? If yes, then you have landed on the right page. In this article, we will cover the basic accounting questions and answers for interview pdf. These questions will help you prepare better for your interview and increase your chances of landing your dream job. Let's get started!
What Is Accounting?
Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions. The purpose of accounting is to keep track of the financial transactions of a company, to ensure the accuracy of financial statements, and to provide information to management for decision-making purposes.
What Are The Different Types Of Accounting?
There are different types of accounting, including:
- Financial Accounting: This type of accounting is concerned with recording and summarizing financial transactions to produce financial statements that are used by external users, such as investors and creditors.
- Managerial Accounting: This type of accounting is concerned with providing information to internal users, such as managers, to facilitate planning and control decision-making.
- Tax Accounting: This type of accounting is concerned with preparing tax returns and complying with tax laws.
What Is A Balance Sheet?
A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time. The balance sheet follows the accounting equation, which states that assets must always equal liabilities plus equity. The purpose of the balance sheet is to show the financial position of a company by providing information about its resources and obligations.
What Is An Income Statement?
An income statement is a financial statement that shows a company's revenue, expenses, and net income or net loss for a specific period of time, usually a month or a year. The purpose of the income statement is to show how much money a company made or lost during the period covered by the statement.
What Is A Cash Flow Statement?
A cash flow statement is a financial statement that shows a company's cash inflows and outflows for a specific period of time, usually a month, a quarter, or a year. The purpose of the cash flow statement is to show how much cash a company has generated or used during the period covered by the statement.
What Is The Difference Between A Credit And Debit?
Debit and credit are accounting terms that are used to indicate the increase or decrease in an account balance. A debit is an entry that represents an increase in assets or a decrease in liabilities or equity, while a credit is an entry that represents an increase in liabilities or equity or a decrease in assets. In simple words, a debit is what you receive, and a credit is what you give.
What Is The Accounting Equation?
The accounting equation is the basis of double-entry bookkeeping. It states that assets must always equal liabilities plus equity. The equation can be represented as follows:
Assets = Liabilities + Equity
Assets are what a company owns, such as cash, inventory, and property. Liabilities are what a company owes, such as loans and accounts payable. Equity is the difference between assets and liabilities and represents the owner's stake in the business.
What Is The Accrual Basis Of Accounting?
The accrual basis of accounting is a method of accounting that recognizes revenue and expenses when they are earned or incurred, regardless of when the cash is received or paid. This method provides a more accurate picture of a company's financial performance by matching revenue and expenses to the period in which they occur.
What Is The Difference Between Accounts Payable And Accounts Receivable?
Accounts payable is the amount that a company owes to its suppliers for goods or services that have been purchased but not yet paid for. Accounts receivable is the amount that a company is owed by its customers for goods or services that have been sold but not yet paid for. In simple words, accounts payable is money that a company owes, while accounts receivable is money that a company is owed.
What Are The Basic Financial Statements?
The basic financial statements include:
- Balance Sheet
- Income Statement
- Cash Flow Statement
These statements provide information about a company's financial position, performance, and cash flow.
Conclusion
Accounting is an important field that requires knowledge, skills, and expertise. If you are preparing for an accounting job interview, you should be familiar with the basic accounting questions and answers. The questions covered in this article will help you prepare better for your interview and increase your chances of landing your dream job. Remember to be confident, well-prepared, and enthusiastic during your interview. Good luck!
