Accountant Anywhere Services Interview Questions and Answers

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Q1. Basic Accounting Concepts
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Q2. Treatment of Prepaid Expenses
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Prepaid expenses are expenses paid in advance and are recorded as assets until they are used or consumed.
• Prepaid expenses are initially recorded as assets on the balance sheet

• They are gradually expensed over the period they are used or consumed

• Examples of prepaid expenses include insurance premiums, rent, and subscriptions

• Prepaid expenses are usually classified as current assets
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Q3. What is the Current Liability
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Current liabilities are debts or obligations that are due within one year or the normal operating cycle of a business.
• Examples include accounts payable, short-term loans, and accrued expenses.

• They are listed on the balance sheet and are important for assessing a company's liquidity and ability to meet short-term obligations.

• Current liabilities are different from long-term liabilities, which are debts or obligations due...read more
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Q4. What is Contingent Liability
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Contingent liability is a potential obligation that may or may not occur in the future.
• It is a possible liability that depends on a future event

• It is not a certain liability and may or may not occur

• Examples include pending lawsuits, warranties, and guarantees

• Contingent liabilities must be disclosed in financial statements
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Q5. What is the treatment of Outstanding Expenses
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Outstanding expenses are expenses that have been incurred but not yet paid.
• Outstanding expenses are recorded as a liability in the balance sheet.

• They are also known as accrued expenses.

• Examples include rent, salaries, and taxes.

• They are usually paid in the next accounting period.

• They are shown in the profit and loss account as an expense.
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