Business Accountant

If you are looking for a job as accounts executive, account assistant or accounts manager, you will find these interview questions on business accounting helpful for your next job role.


Q.1 Give examples of real and nominal accounts.
Real account is primarily an account of assets and liabilities, such as land account, building account, etc. On the other hand a nominal account is an account of income and expenses such as salary account, wages account, etc.
Q.2 What are the ways to maintain accounting accuracy?
One of the most important activity for an organization is to maintain the accuracy of an organisation’s accounting. There are different tools and resources that can be used to limit any potential errors and thereby rectify quickly if any errors do arise.
Q.3 Is it possible for an organization to show positive cash flow and still be in trouble?
Yes it is possible, if it shows an unsustainable improvement in the working capital and involves lack of revenue moving forward in the pipeline.
Q.4 What are the most common errors in accounting?
Some of the most common errors in accounting are – Errors of omission, Errors of commission, Errors of principle and Compensating errors.
Q.5 Give the difference between inactive and dormant account?
Inactive accounts are those accounts that have been closed and will not be used in the future. On the other hand dormant accounts are not currently functional but can be used in the future.
Q.6 Are accounting standards mandatory?
Accounting Standards play a key role in preparing a good and accurate financial report. Since accounting ensures reliability and relevance in the financial reports.
Q.7 In GST, against which liability is the balance in electronic credit ledger be utilised?
It can be used against: Output tax payable or Interest or Penalty
Q.8 What you will do if by mistake IGST is paid instead of CGST/SGST?
We will remit the tax again and claim refund for earlier payment.
Q.9 What you will do if by mistake GST is paid under wrong GSTIN?
We will pay again under right GSTIN and claim refund for earlier payment.
Q.10 What can be verified by auditing the Balance sheet?
We can verify assets, liabilities and income-expense accounts by auditing the Balance sheet
Q.11 List the account to which cost of goods sold on hire purchase, is transferred
It is transferred to trading account.
Q.12 If the company pays royalty on sale, then which account will be debited
Profit and loss account will be debited if royalty is paid on sale.
Q.13 Which account will be debited if cash sent by branch office is not received by the head office by end of the year?
Cash-in-transit account will be debited if cash sent by branch office is not received by the head office by end of the year
Q.14 In GST, where should the books needs to be maintained?
As per GST, books should be maintained at principal place of business as listed in the Certificate of Registration of the company.
Q.15 How should accounts be maintained for GST filing?
Accounts can be in manual or electronic form or both as well.
Q.16 Who can audit accounts and GST filing if the company's turnover exceeds the prescribed limit in a financial year?
In case, company's turnover exceeds the prescribed limit in a financial year, either Chartered Accountant or Cost Accountant can audit.
Q.17 Which report will be impacted if inventory increases by Rs. 1,000/-?
The balance sheet and cash flow statement will be impacted.
Q.18 Does the income statement be impacted if inventory increases by Rs. 1,000/-
There will be no impact on the income statement if inventory increases by Rs. 1,000/-
Q.19 What do you know about negative working capital?
Negative working capital refers to the situation if current liabilities exceed the current assets. Retailers, grocery stores have negative working capital as they generate lots of cash before paying the supplier's bill. Cash-only business with high turnover usually has negative working capital.
Q.20 Which single financial statement will give the health of the company?
The cash flow statement is the single financial statement which should be used as it shows amount of cash being generated.
Q.21 Differentiate amongst deferred revenue and accounts receivable.
Both deferred revenue and accounts receivable are different though sounds similar. The main difference is whether goods or service has been provided to customer or not, in case of deferred revenue it is not provided and is the cash received from customers. Whereas, for accounts receivable goods/services have been provided and is the cash owing from customers for them.
Q.22 Which type of account does outstanding Wages belongs to?
Personal Account
Q.23 How will manage a difficult customer?
Customers are essential for revenue and profits; a difficult customer management involves connecting with them to addressing their issue, listening to them and having clear communication without bias.
Q.24 How will you manage conflict with other departments of the company?
Conflicts in a company need to be analyzed for its root cause and meeting with other party/ department based on facts and figures should be taken for resolution. Depending upon their concerns, future transactions can be negotiated and clarified.
Q.25 How will you address high pressure delivery due to financial year closure?
A financial year closure is a yearly exercise and pressure can be reduced by reconciling every three months with branches and departments. Further, bank and tax reconciliation be done every month end.
Q.26 If i present you with a statement:– “Debit the Receiver, Credit the Giver," what does it means?
So, this is one of the most frequently asked accounting interview questions. Your reply should be – This principle is used in respect to the personal accounts. If a person is giving any amount either in cash or by cheque to an organization, it becomes an inflow and thus that person must be credited in the books of accounts. Therefore, when an organization received the money or cheque, it needs to credit the person who is paying and debit the organization
Q.27 What is the minimum number of ledgers an Organization needs, If the organisation has three bank accounts for processing payments?
I'd say, three ledgers for each account for proper accounting and reconciliation processes.
Q.28 To estimate bad debts, what are some of the ways?
Percentage of outstanding accounts, aging analysis and percentage of credit sales, are some of the well known ways of estimating the bad debts.
Q.29 Can you answer what is a deferred tax liability?
Yes, The situation where a company is in condition to pay more tax in the future due to current transactions, is signified as Differed tax liability.
Q.30 Please explain what is a deferred tax asset and how is the value created?
A deferred tax asset is when the tax amount has been paid or has been carried forward but has still not been recognized in the income statement. The value is created by taking the difference between the book income and the taxable income
Q.31 Please define the term Material Facts?
Yes, The documents such as: vouchers, bills, debit and credit notes, or receipts, etc. are considered as material facts. They serve as the base of every account book.
Q.32 Lets consider the Double Entry System, what are the different stages of it?
There are three different stages of double entry system, which are – 1.) Recording transactions in the accounting systems 2.) Preparing a trial balance in respective ledger accounts 3.) Preparing final documents and closing the books of accounts
Q.33 Are there any disadvantages of a Double Entry Systems?
Yes, there a few disadvantages when it comes to Double Entry Systems: Difficult to find the errors, especially when transactions are recorded in the books And extensive clerical labor is required, in case of any error One can’t disclose all the information of a transaction, which is not properly recorded in the journal
Q.34 What is GAAP?
Generally Accepted Accounting Principles (GAAP) abbreviated as GAAP, is issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956. It is a cluster of accounting standards and common industry usage, and it is used by organizations to: Record their financial information properly Summarize accounting records into financial statements Disclose information whenever required
Q.35 Can you tell me some examples for liability accounts?
Yes, there are some popular examples of liability accounts: Accounts Payable Accrued Expenses Bonds Payable Customer Deposits Income Taxes Payable Instalment Loans Payable Interest Payable Lawsuits Payable Mortgage Loans Payable Notes Payable Salaries Payable Warranty Liability
Q.36 Name the most preferred accounting application by you 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. It helps with financial analysis as well.
Q.37 Do you know anything regarding GST?
Yes, As the definition says the GST stands for Goods and Service Tax. It's an indirect tax other than the income tax. It charges on the value of the service or product sold to a customer. The customer/clients pay the GST, and the seller deposits the GST with the government. Some countries around the Globe have sales, service tax with works more or less the same as GST.
Q.38 What is tally accounting?
It is an accounting software used by small business and shops to manage routine accounting transactions.
Q.39 What are fictitious assets?
Fictitious assets are intangible assets and their benefit is derived over a longer period, for example good will, rights, deferred revenue expenditure, miscellaneous expenses, preliminary expenses, and accumulated loss, among others.
Q.40 Is there any difference between inactive and dormant accounts?
Yes, both are different terms in accounting. The accounts have been closed and will not be used in the future as well are known to be as Inactive accounts. While on the other hand the dormant accounts are those that are not functional today but may be used in the future.
Q.41 Differentiate between Accounting and Auditing?
Accounting is all about recording daily business activities while on the other hand auditing is all about checking that whether all these events have been noted down correctly or not.
Q.42 Please define dual aspect term in accounting?
The dual aspect concept states that every transaction has two sides as implied by its name. For example, when you buy something, its a give and take of cash and the commodity. Similarly, when you sell something, you lose the possession of that thing and receive money in return. So this gaining and losing are basically the two aspects of every transaction.
Q.43 Have you ever Prepared any MIS reports, if yes then what are they?
Yes, During my previous jobs, I 'have prepared a few MIS reports. MIS reports are created to identify the efficiency of any department of a company or an organization.
Q.44 Can you explain the basic accounting equation?
Ans. Yes, since we know that accounting is all about assets, liabilities and capital. Hence, its equation can be summarized as: "Assets = Liabilities + Owners Equity."
Q.45 Can you tell what is working capital?
The Working capital can be defined as current assets minus current liabilities. In banking, working capital is normally defined more narrowly as current assets less current liabilities.
Q.46 Who has the authority to remove the first auditor before the expiry of term?
The shareholders in a general meeting
Q.47 Who regulates the money circulation in India?
RBI
Q.48 Who will settle the greivances of customers of a bank?
Ombuds Men
Q.49 When did the Indian Banking Act came into force?
1949
Q.50 The cost of erection of an old machine will be posted in the credit side of which account?
Cash Account
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