10+ Thinkogic Interview Questions and Answers

Revenue recognised at February end would be ₹2000.

• Revenue should be recognised on a monthly basis, so ₹2000 for February

• This is calculated by dividing the annual premium by 12

• This is an example of accrual accounting

If electricity meter is installed in office and we don't receive the bill for March month, the treatment at March end will be...

• Check if the meter reading has been taken for March

• Contact the electricity provider to inquire about the bill

• Estimate the bill based on previous months' usage

• Accrue the estimated bill as an expense in the financial statements

• Adjust the expense in the following month when the actual bill is received

Working capital should be positive and equal to 30 days of sales

• Working capital is the difference between current assets and current liabilities

• In this case, we need to calculate the average number of days of payables and receivables

• Assuming sales are made evenly throughout the year, working capital should be positive and equal to 30 days of sales

• Working capital can be improved by reducing the number of days of payables or increasing the number of days of receivables

Variance in actual and budgeted expenses can be due to various reasons.

• Inaccurate budgeting

• Unexpected events or emergencies

• Changes in market conditions

• Inefficient cost management

• Errors in recording or reporting expenses

• Delayed or unanticipated expenses

• Inflation or currency fluctuations

• Changes in business strategy or priorities

Actual revenue can be less than forecasted revenue due to various reasons.

• Decrease in demand for the product or service

• Increased competition

• Changes in market conditions

• Inaccurate forecasting

• Economic downturn

• Poor sales and marketing strategies

• Production issues

• Pricing strategy

• External factors such as natural disasters or pandemics

Budgeting is a plan for future expenses while forecasting is an estimate of future financial outcomes.

• Budgeting involves creating a financial plan for a specific period of time, usually a year, and allocating resources accordingly.

• Forecasting involves estimating future financial outcomes based on past performance and current trends.

• Budgeting is more rigid and inflexible while forecasting is more flexible and adaptable.

• Budgeting is used to control spending while forecasting is...read more

Unposted vendor invoices can cause inaccurate financial statements and misrepresentation of financial performance.

• Unposted vendor invoices can lead to incorrect accounts payable balances.

• If the invoice is not posted in the correct period, it can lead to misrepresentation of financial performance for that period.

• Delayed posting of vendor invoices can also lead to late payment fees and damage vendor relationships.

• It is important to have a system in place to ensure timely receip...read more

Vendor's invoice may not get posted in correct period due to various reasons.

• Incorrect date entered on the invoice

• Delay in receiving the invoice from the vendor

• System error or glitch

• Incorrect posting date selected during posting

• Invoice not approved by the authorized personnel

• Vendor's account not set up correctly in the system

• Mismatch in the purchase order and invoice details

Deferred revenue is the income received in advance for goods or services that are yet to be delivered or rendered.

• Deferred revenue is a liability on the balance sheet.

• It is recognized as revenue only when the goods or services are delivered or rendered.

• Examples include subscription fees, advance payments for software licenses, and gift cards.

• Deferred revenue is also known as unearned revenue or advance payments.

Budgeting and forecasting are typically done annually, but may be done more frequently in certain industries or circumstances.

• Budgeting and forecasting are important tools for financial planning and decision-making.

• Most companies will do an annual budget and forecast, but may also do quarterly or monthly updates.

• Industries with rapidly changing market conditions, such as technology or fashion, may require more frequent updates.

• Budgeting and forecasting may also be done in res...read more

Re-class entry for revenue posted to wrong GL

• Identify the correct GL account for the revenue

• Reverse the entry from the wrong GL account

• Post the entry to the correct GL account

• Ensure that the financial statements are adjusted accordingly

If vendor PO is not passed, it goes through a review process and may require additional approval.

• Vendor PO may not be passed due to various reasons such as incorrect pricing, quantity, or product

• The PO will go through a review process to identify the issue and determine the appropriate action

• Additional approval may be required before the PO can be passed and processed

Revenue recognition principle is an accounting principle that determines when revenue is recognized in financial statements.

• Revenue is recognized when it is earned, regardless of when payment is received

• Revenue must be measurable and collectible to be recognized

• The principle is important for accurate financial reporting and to prevent fraudulent practices

• Examples include recognizing revenue from completed projects or sales of goods and services

Working capital is the difference between current assets and current liabilities.

• Working capital is the amount of money a company has available to fund its day-to-day operations.

• It is calculated by subtracting current liabilities from current assets.

• A positive working capital indicates that a company has enough funds to meet its short-term obligations.

• Examples of current assets include cash, accounts receivable, and inventory, while current liabilities include accounts payabl...read more