SHV Energy Interview Questions and Answers

Golden rules of Accounting, Accrual & Matching Concept.

• Golden rules of accounting include the accounting equation, double-entry accounting, and the concept of debits and credits

• Accrual concept states that revenue and expenses should be recognized when earned or incurred, regardless of when cash is received or paid

• Matching concept states that expenses should be matched with the revenue they helped generate in the same accounting period

• For example, if a company sells goods on c...read more

Inter company transactions are recorded using journal entries.

• Inter company transactions involve two or more entities within the same organization.

• The journal entry for inter company transactions includes a debit and credit entry.

• The debit entry is made in the receiving company's account and the credit entry is made in the giving company's account.

• For example, if Company A sells goods to Company B, the journal entry would be a debit to Company B's account and a credit to Comp...read more

Accounting principles are applied in the preparation of financial statements to ensure accuracy and compliance with regulations.

• The principles of accounting include the matching principle, revenue recognition principle, and the cost principle.

• Financial statements must be prepared in accordance with Generally Accepted Accounting Principles (GAAP).

• The balance sheet, income statement, and cash flow statement are the three main financial statements that must be prepared.

• Examples ...read more

Accounts Receivable is the money owed to a company by its customers while Accounts Payable is the money a company owes to its suppliers.

• Accounts Receivable is an asset account that represents the amount of money owed to a company by its customers for goods or services provided.

• Accounts Payable is a liability account that represents the amount of money a company owes to its suppliers for goods or services received.

• Accounts Receivable and Accounts Payable are both important com...read more

Accrual concept refers to the recognition of revenue and expenses in the financial statements before the actual cash transaction takes place.

• Accrual concept is based on the matching principle, which states that expenses should be recognized in the same period as the revenue they helped generate.

• This means that revenue and expenses are recorded in the financial statements when they are earned or incurred, regardless of when the cash is received or paid.

• For example, if a compan...read more

Amortization is the process of spreading out the cost of an intangible asset over its useful life.

• Amortization is commonly used for assets like patents, copyrights, and trademarks.

• It helps match the expense of the asset with the revenue it generates.

• The amortization expense is recorded on the income statement over time.

• It is similar to depreciation for tangible assets like buildings and equipment.

Accrual is the process of recognizing expenses and revenues before they are actually paid or received.

• Accrual accounting matches expenses to the revenue they generate, rather than when the cash is actually exchanged.

• Accruals are necessary to ensure that financial statements accurately reflect the financial position of a company.

• Examples of accruals include accrued interest, accrued salaries, and accrued taxes.

• Accruals are typically recorded at the end of an accounting period ...read more