Frequently Asked Accounts Interview Questions 

What Is Accounting?

Accounting is a method or system used to keep track of and determine the financial status of a person or company’s income/assets and outlay of money/possessions. (An Accountant engages in Accounting: “The occupation of maintaining and auditing records and preparing financial reports for a business”).

Who Uses Accounting?

Taxpayers like to use accounting.

What Are Accounting Principles?

The Accounting Principles are the assertion rules of accounting and the application of these rules, method, & procedures to actual practice of accounting.

These Accounting principles have been divided into

A. accounting concepts
B. accounting conventions.

What Are Accounting Entities?

Accounting entities are for example a business do not get these mixed up with legal entities.

What Are The 4 Phases Accounting?

1. Recording
2. Classifying
3. Summarizing
4. Interpreting.

What Are The Different Fields Of Accounting?

There is one field of accounting, but there are many different jobs within the field such as auditor, bookkeeper, payroll accountant, cost accountant, tax accountants, etc. Accountants wear many hats and often do different tasks for different clients.

What Are The Different Branches Of Accounting ?

Financial accounting refers to accounting for revenues, expenses, assets, and liabilities. It involves the basic accounting processes of recording, classifying, and summarizing transactions.

– Cost accounting is the branch of accounting dealing with the recording, classification, allocation, and reporting of current and prospective costs.
– Managerial accounting is the branch of accounting designed to provide information to various management levels in the hospitality operation for enhancing controls.

What Is Accounting Transaction?

A transaction is an execution of a user program and is seen by the DBMS as a series or list of actions. The actions that can be executed by a transaction include the reading and writing of database.

What Are The Functions Of Accounting?

Accounting involves the creation of financial records of business transactions, flow of finance, the process of creating wealth in an organization, and summarizing the financial position of a business at a given moment in time.

What Is Creative Accounting?

“Thinking outside the box” when such practice is not permitted. Creative accounting is actually a good description of the practice, as it tends to create a picture, which is not technically correct from the perspective of the information’s intended user.

What Is A Ledger In Regards To Accounting?

It is a complete set of accounts for a business entity.

What Is Accounting Management?

Accounting Management (Business) is the practical application of management techniques to control and report on the financial health of the organization. This involves the analysis, planning, implementation, and control of programs designed to provide financial data reporting for managerial decision-making.

This includes the maintenance of bank accounts, developing financial statements, cash flow, and financial performance analysis. Accounting management is a mandatory knowledge module of any MBA program.

Accounting (IT) management: Accounting is often referred to as billing management. The goal is to gather usage statistics for users.

Using the statistics the users can be billed and usage quota can be enforced.

Examples:

* Disk usage
* Link utilization
* CPU time.

What Is Use Of Statistics In Accounting?

Well, in many accounting situations, there is too much data to go through all this. For example, if we are looking about Ford motor corp., and looking at some specific data, their may be too much to analyze, so we take a sample. Then we need to know how big a sample to take so we can say with 95% confidence that our results are representative of all the data.

Statistics tells us what sample size we need.Why Are Accounting Standards Necessary?

Accounting standards are necessary to promote high quality financial reporting. The fundamental role of accounting is to communicate economic information about businesses and other organization to various stakeholders including government, investors, shareholders, suppliers, lenders, customers, and the public.

These stakeholders use such information to take decisions and to assess the stewardship of people appointed to manage such organizations.

If this information were not of a high quality standard, then the stakeholders would be unable to take effective decisions that will benefit them. For example, if a financial report were manipulated to show higher profits, investors would hold on to their shares with the belief that the company is doing well.

Accounting standards came to be developed from the mid sixties onwards to promote the integrity of the accounting profession by way of ensuring uniformity in the way accountants report transactions in their books and in their preparation of the final accounts of businesses.

This is largely aimed at boosting the confidence of stakeholders, particularly shareholders and potential investors in the accounting profession.

Good and useful information should have the essential characteristics of understandability, comparability, relevance, and reliability in order to play its role effectively.

Accounting standards serve to promote the understandability, comparability, relevance, and reliability of financial reports.

What Is Accounting Normalization?

It is removing items from the income statement or balance sheet that do not normally occur during the course of business to better estimate the value of a company.

What Is Normative Accounting?

Normative Theory is a theory that prescribes how a process of accounting should be done. This theory is not based on observation and may suggest radical changes to current practices in accounting.

What Is Computerized Accounting?

Accounting is the method in which financial information is gathered, processed, and summarized into financial statements and reports.

The purpose of accounting is to provide information used in decision-making. Accounting may be viewed as a system (a process) that converts data into useful information.

Information processes include:

* Recording
* Maintaining
* Reporting

Every business has numerous processes. Some are simple, others complex and cumbersome. However, as the business grows, acquires new customers, enters new markets, and keeps pace with constant changes in statutory regulations… the company will need to maintain highly accurate and up-to-date accounting, inventory, and statutory records.

This is where a computerized accounting helps simplify, integrate, and streamline all the business processes, cost-effectively and easily.

What Does The Abbreviation M Mean In Accounting?

It has come to mean one million in general usage, although it used to mean one thousand (and one million was abbreviated “MM”)

What Does The Abbreviation Dr Mean In Accounting?

‘Dr’ means Debere in Latin stands for ‘what comes in’ or in simple words whatever assets the business owns or the expenses it has to pay comes under debit.

While ‘cr’ means credere in Latin means ‘what goes out’, in simple words whatever liabilities business owns, or the income it earned during the year comes under credit.

What Is Accounting Ethics?

Accounting ethics is primarily a field of applied ethics, the study of moral values and judgments as they apply to accountancy. It is an example of professional ethics.

What Is An Accounting Transaction?

An accounting transaction is the exchange of request/response messages to perform accounting. Accounting can be performed in the form of accounting transactions that report on resource usage by a session. Accounting transaction can occur during a session if accounting or charging indications are needed [p&l based acct] or only at the start and the end of the session.

What Does Overhead Mean In Regards To Accounting?

It is to describe costs of running a business, e.g. rent rates and salaries.

What Are The Uses Of Journal In Accounting?

The journal is most commonly used to record corrections to errors that have been made in writing up the general ledger accounts.

What Is Fiduciary Accounting?

Proper accounting for property that is entrusted to the fiduciary acting under the conditions set forth in a deed.

What Is Fair Value Accounting?

Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that, it is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. However, it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value.

When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial markdown from the prior value. See related links for complete explanations.

Is Financial Accounting Necessary?

Yes, the accounting calculates the cost of capital to the business. It compares the current, expected, and historic rates of return. Suppose a company is making 12% returns but borrowing money by using the owner’s credit card at 22% be good to know that.

What Are The Different Branches Of Accounting?

Following are different branches of accounting:

1- Cost Accounting
2- Financial Accounting
3- Management Accounting