50+ SKS Tech Solution Interview Questions and Answers

Reverse Repo Rate and Repo Rate are monetary policy tools used by Reserve Bank of India to control inflation and liquidity in the economy.

• Repo Rate is the rate at which RBI lends money to commercial banks in case of shortage of funds.

• Reverse Repo Rate is the rate at which RBI borrows money from commercial banks.

• Both rates are used to control inflation and liquidity in the economy.

• If RBI wants to increase liquidity, it reduces Repo Rate and if it wants to decrease liquidity, i...read more

Financial system is a network of institutions, markets, and intermediaries that facilitate the flow of funds between savers and borrowers.

• Regulatory bodies include SEC, FDIC, CFTC, OCC, and Federal Reserve

• SEC regulates securities markets and protects investors

• FDIC insures deposits in banks and savings associations

• CFTC regulates futures and options markets

• OCC supervises and regulates national banks

• Federal Reserve regulates monetary policy and oversees the banking system

Pivot Table is a data summarization tool in MS Excel.

• It allows users to quickly summarize and analyze large amounts of data.

• Users can easily group and filter data based on different criteria.

• Pivot Tables can be used to create charts and graphs for visual representation of data.

• Example: A sales report can be summarized by product, region, and time period using Pivot Table.

• Example: A survey data can be analyzed by age group, gender, and location using Pivot Table.

H-Lookup and V-Lookup are functions in MS Excel used to search for specific data in a table.

• H-Lookup searches for data in a horizontal row and returns a corresponding value from a specified column.

• V-Lookup searches for data in a vertical column and returns a corresponding value from a specified row.

• Both functions require a reference table and a lookup value.

• They are commonly used in data analysis and management.

• Example: H-Lookup can be used to find the price of a specific ite...read more

Insurance is a contract between an individual and an insurance company to protect against financial loss.

• Insurance provides financial protection against unexpected events such as accidents, illnesses, and natural disasters.

• It helps individuals and businesses manage risk by transferring the risk to the insurance company.

• Insurance also provides peace of mind and can help individuals and businesses recover from financial losses.

• Examples of insurance include health insurance, car...read more

Determining the value of insurance for an individual

• Consider the individual's financial obligations and responsibilities

• Evaluate the individual's income and assets

• Assess the individual's risk tolerance and desired level of coverage

• Take into account the individual's age, health condition, and dependents

• Consider the potential costs of medical treatments, property damage, or liability claims

• Consult with insurance professionals or use online calculators for guidance

I would suggest a life insurance policy with a critical illness rider.

• A life insurance policy will provide financial security to the dependents in case of the policyholder's untimely demise.

• A critical illness rider will provide coverage for major illnesses like cancer, heart attack, etc.

• The policy should have a sufficient sum assured to cover the family's expenses and future needs.

• The premium should be affordable and the policy should have flexible payment options.

• The policyh...read more

Depreciation is the allocation of the cost of an asset over its useful life. GST is a consumption tax that is reflected in the final accounts.

• Depreciation is a non-cash expense that reduces the value of fixed assets over time.

• Depreciation is shown in the income statement as an expense and in the balance sheet as accumulated depreciation.

• GST (Goods and Services Tax) is a consumption tax levied on the supply of goods and services.

• GST is reflected in the final accounts as a liab...read more

Accounts receivable is the money owed to a company by its customers for goods or services sold on credit.

• Accounts receivable is an asset on the balance sheet.

• Cash basis accounting recognizes revenue when cash is received, while accrual basis accounting recognizes revenue when it is earned.

• Companies typically use accrual basis accounting for financial reporting purposes.

• Accounts receivable can be managed through aging reports and collection efforts.

• Example: A company sells $10...read more

Macro is a set of instructions that automate repetitive tasks in MS Word.

• Macros can be recorded or written in Visual Basic for Applications (VBA)

• They can be assigned to a button or keyboard shortcut for easy access

• Examples of tasks that can be automated with macros include formatting, inserting text, and running spell check

• Macros can save time and increase productivity for users who frequently perform the same tasks in Word

Debentures are long-term debt instruments issued by companies to raise funds from the public. Risk analysis involves evaluating potential risks associated with an investment. When advising a person on financial matters, factors like age, assets, risk tolerance, and financial goals must be considered.

• Debentures are a form of corporate bonds that pay fixed interest rates to investors.

• Risk analysis involves assessing the likelihood of potential risks and their impact on investme...read more

Yes

• Tax profit and accounting profit are different concepts in finance.

• Tax profit refers to the profit calculated for tax purposes, taking into account tax laws and regulations.

• Accounting profit, on the other hand, is the profit calculated based on generally accepted accounting principles (GAAP).

• Tax profit can be higher or lower than accounting profit depending on various factors such as tax deductions, credits, and allowances.

• For example, a company may have higher accounting ...read more

Endowment policy provides both insurance and savings, while term insurance only provides insurance coverage.

• Endowment policy pays out a lump sum at the end of the policy term, while term insurance pays out only in case of death during the policy term.

• Endowment policy premiums are higher than term insurance premiums due to the savings component.

• Endowment policy is suitable for those who want both insurance and savings, while term insurance is suitable for those who only want i...read more

Depreciation is the allocation of the cost of an asset over its useful life in the books of accounts.

• Depreciation is a non-cash expense that reflects the decrease in value of an asset over time.

• It is treated as an operating expense on the income statement, reducing the company's net income.

• Depreciation is recorded on the balance sheet to reduce the carrying amount of the asset.

• There are different methods of calculating depreciation such as straight-line, double declining bala...read more

Accounting profit and tax profit are not the same. The key difference lies in the treatment of certain expenses and income.

• Accounting profit is based on the principles of accounting and includes all revenues and expenses recorded in financial statements.

• Tax profit is used for calculating taxes owed to the government and may have adjustments for tax purposes, such as depreciation and interest expenses.

• Key differences include treatment of depreciation, interest expenses, and ot...read more

Journal entry for investment in businesses with $20,000 cash and $80,000 bank loan.

• Debit the investment account for $100,000 ($20,000 cash + $80,000 bank loan)

• Credit the cash account for $20,000

• Credit the bank loan account for $80,000

Accrual income and accrual expense are recognized when they are incurred, regardless of when cash is exchanged.

• Accrual income is income that has been earned but not yet received, while accrual expense is an expense that has been incurred but not yet paid.

• Accrual income and expense are recorded in the financial statements in the period in which they are earned or incurred, regardless of when the cash is actually received or paid.

• Accrual accounting matches revenues with expense...read more

Accounts receivables are amounts owed to a company by customers for goods or services provided, while accounts payable are amounts owed by a company to suppliers for goods or services received.

• Accounts receivables represent money owed to a company by customers, typically shown as an asset on the balance sheet.

• Accounts payable represent money owed by a company to suppliers or vendors, typically shown as a liability on the balance sheet.

• Accounts receivables are usually collecte...read more

Deemed dividend is a distribution of profits by a company that is not actually paid out, while block of assets refers to a group of assets treated as a single unit for tax purposes.

• Deemed dividend is a distribution of profits by a company to its shareholders, even if no actual dividend is declared or paid out.

• Block of assets refers to a group of assets that are treated as a single unit for the purpose of calculating depreciation or capital gains tax.

• Deemed dividends can arise...read more

Rent agreements are usually short-term, while lease agreements are long-term contracts.

• Rent agreements are typically month-to-month or for a fixed term, while lease agreements are usually for a longer period, such as one year or more.

• Rent agreements are more flexible and can be easily terminated with notice, while lease agreements are more binding and may have penalties for early termination.

• Rent agreements are common for residential properties, while lease agreements are com...read more

Needs analysis is the process of determining the needs and requirements of a client or project before making recommendations or decisions.

• Needs analysis involves gathering information about the client's goals, objectives, and constraints.

• It helps in identifying the gap between the current state and the desired state.

• Mutual funds pool money from multiple investors to invest in a diversified portfolio of securities.

• ETFs are similar to mutual funds but trade on stock exchanges l...read more

FV stands for Future Value and PV stands for Present Value.

• FV is the value of an asset or investment at a specified date in the future, based on the expected growth rate.

• PV is the current value of a future sum of money or stream of cash flows, discounted at a specific rate.

• FV and PV are commonly used in finance and accounting to calculate the value of investments, loans, and annuities.

• For example, if you invest $100 today at a 5% annual interest rate, the FV after one year wo...read more

Tax reconciliation involves comparing financial records with tax returns to ensure accuracy.

• Gather all financial records and tax returns for the period in question

• Identify any discrepancies between the two sets of records

• Adjust the financial records to match the tax returns, or vice versa

• Document any changes made during the reconciliation process

• Ensure all adjustments are properly accounted for in the final reconciliation

Capital expenses are for long-term assets while revenue expenses are for day-to-day operations.

• Capital expenses are for acquiring or improving long-term assets like buildings or equipment.

• Revenue expenses are for day-to-day operations like salaries, rent, and utilities.

• Capital expenses are usually depreciated over time while revenue expenses are fully expensed in the period incurred.

Disallowed expenses in a tax return

• Personal expenses

• Gifts and donations

• Political contributions

• Illegal activities

• Fines and penalties

• Life insurance premiums

• Health club dues

• Hobby expenses

Accounting methods refer to the rules and procedures used by companies to prepare financial statements.

• Accounting methods determine how revenue and expenses are recognized in financial statements.

• There are two main accounting methods: cash basis and accrual basis.

• Cash basis accounting records revenue and expenses when cash is actually received or paid.

• Accrual basis accounting records revenue when it is earned and expenses when they are incurred, regardless of when cash is exc...read more

Deferred revenue expenditure refers to expenses that are incurred in one accounting period but are recognized as assets and expensed over a period of time.

• Deferred revenue expenditure is recorded as an asset on the balance sheet and gradually expensed over the period of benefit.

• Examples include expenses incurred for setting up a new business, advertising costs, and research and development expenses.

• It helps in matching expenses with revenues generated in future periods.

• Deferr...read more

International accounting refers to the accounting standards and practices used in multiple countries to facilitate global business transactions.

• Involves understanding and applying different accounting standards and regulations across countries

• Requires knowledge of currency exchange rates and international tax laws

• Helps companies compare financial performance across borders and comply with international reporting requirements

• Examples include IFRS (International Financial Repor...read more

Capital gain is the profit that results from a sale of a capital asset, such as stocks, bonds, or real estate.

• Capital gain is the difference between the purchase price and the selling price of a capital asset.

• It is considered a taxable event by the IRS in the United States.

• Short-term capital gains are taxed at a higher rate than long-term capital gains.

• Examples of capital assets include stocks, bonds, real estate, and precious metals.

Video calling over gmeet is a popular way to communicate remotely.

• Gmeet is a video conferencing tool developed by Google.

• It allows users to host and join meetings with up to 250 participants.

• Users can share their screen, mute/unmute themselves, and use the chat feature.

• Gmeet is commonly used for remote work, online classes, and virtual events.

Bank reconciliation is the process of comparing a company's records to its bank statement to ensure they match.

• Bank reconciliation helps identify discrepancies between the company's records and the bank statement.

• It involves comparing transactions, such as deposits and withdrawals, in the company's records to those in the bank statement.

• Any differences found during the reconciliation process need to be investigated and resolved.

• Bank reconciliation ensures the accuracy of the ...read more

LTCA stands for Long-Term Capital Asset and STCA stands for Short-Term Capital Asset.

• LTCA refers to assets held for more than 36 months, while STCA refers to assets held for 36 months or less.

• Gains from LTCA are taxed at a lower rate compared to gains from STCA.

• Examples of LTCA include real estate, stocks held for more than 3 years, while examples of STCA include stocks held for less than 3 years.

Accounting concepts are principles and guidelines used in financial accounting to ensure accurate and consistent reporting.

• Accounting concepts include the accrual concept, consistency concept, materiality concept, and going concern concept.

• The accrual concept requires that revenue and expenses be recorded when they are earned or incurred, regardless of when payment is received or made.

• The consistency concept requires that accounting methods and procedures be consistent from o...read more

Bad debt is an amount owed by a debtor that is unlikely to be paid. Bad debt recovery entry is the process of recovering the amount owed.

• Bad debt is a loss for the company and is written off as an expense

• Bad debt recovery entry is made when the amount is recovered

• The entry is made by debiting the cash account and crediting the bad debt recovery account

• Example: If a customer owes $1000 and is unable to pay, it becomes bad debt. If later the customer pays $500, the bad debt rec...read more

A/r and A/p difference

• A/r stands for Accounts Receivable, which represents the money owed to a company by its customers for goods or services provided.

• A/p stands for Accounts Payable, which represents the money a company owes to its suppliers or vendors for goods or services received.

• The main difference between A/r and A/p is the direction of the cash flow: A/r represents money coming into the company, while A/p represents money going out of the company.

• A/r is an asset on the...read more

Five common deductions include medical expenses, charitable donations, mortgage interest, student loan interest, and state and local taxes.

• Medical expenses: Costs related to healthcare, such as doctor visits, prescriptions, and medical equipment.

• Charitable donations: Contributions to qualified organizations, such as churches or non-profits.

• Mortgage interest: Interest paid on a mortgage for a primary or secondary residence.

• Student loan interest: Interest paid on student loans ...read more

Accrued expenses/revenue are incurred but not yet paid/received, while prepaid expenses/revenue are paid/received in advance.

• Accrued expenses/revenue are recognized when incurred, regardless of payment/receipt.

• Prepaid expenses/revenue are recognized when paid/received, and then expensed/revenue recognized over time.

• Journal entry for accrued expenses: Debit expense account, Credit accrued liability account.

• Journal entry for prepaid expenses: Debit prepaid asset account, Credit...read more

Bank reconciliation involves comparing the bank statement with the company's records to ensure they match. Tax reconciliation involves comparing tax records with financial statements.

• Ensure all transactions on the bank statement are recorded in the company's records

• Identify any discrepancies and investigate the reasons behind them

• Adjust the company's records to match the bank statement

• For tax reconciliation, compare tax records with financial statements to ensure accuracy

• Make...read more

Book profit is calculated based on accounting principles, while tax profit is calculated based on tax laws and regulations.

• Book profit is calculated using Generally Accepted Accounting Principles (GAAP), which may allow for different methods of revenue recognition and expense allocation compared to tax laws.

• Tax profit is calculated based on tax laws and regulations, which may have specific rules for deductions, credits, and income recognition that differ from GAAP.

• Differences...read more

Deemed Dividend is a dividend paid by a company in a non-cash form. Block of Assets refers to a group of assets with similar characteristics.

• Deemed Dividend is taxed as per the Income Tax Act, 1961.

• Block of Assets is used for calculating depreciation.

• Deemed Dividend can be in the form of loans, advances, or even the use of company assets.

• Block of Assets can be tangible or intangible assets.

• Deemed Dividend can be distributed to shareholders, directors, or even their relatives....read more

Depreciation is the allocation of the cost of a tangible asset over its useful life.

• Depreciation is a non-cash expense that reflects the decrease in value of an asset over time.

• It is used to spread out the cost of an asset over its useful life for accounting and tax purposes.

• Common methods of calculating depreciation include straight-line, double declining balance, and units of production.

• Examples of depreciable assets include buildings, vehicles, machinery, and equipment.

Accrual concept is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

• Revenue is recognized when it is earned, not when cash is received.

• Expenses are recognized when they are incurred, not when they are paid.

• Accrual accounting provides a more accurate representation of a company's financial position.

• Example: A company records revenue when it delivers goods to a customer, even if the customer has...read more

Journal ledger scrutiny involves reviewing and analyzing entries in the journal ledger to ensure accuracy and compliance with accounting standards.

• Reviewing journal entries for accuracy and completeness

• Checking for proper classification and documentation of transactions

• Verifying that entries comply with accounting standards and regulations

• Identifying and correcting errors or discrepancies

• Ensuring proper approval and authorization for transactions

• Analyzing trends and patterns ...read more

Pre-receive liability is a financial obligation that arises before the receipt of goods or services.

• Pre-receive liability refers to a liability that is incurred before the actual receipt of goods or services.

• It is a financial obligation that a company owes to its suppliers or vendors for goods or services that have not yet been received.

• Examples of pre-receive liabilities include advance payments made for future purchases or services, such as prepayment for a subscription or ...read more

The golden rules of accounting are basic principles that guide the recording of financial transactions.

• The first golden rule is the Personal Account rule, which states that debit the receiver and credit the giver.

• The second golden rule is the Real Account rule, which states that debit what comes in and credit what goes out.

• The third golden rule is the Nominal Account rule, which states that debit all expenses and losses and credit all incomes and gains.

Methods of accounting include cash basis, accrual basis, and hybrid basis.

• Cash basis accounting records revenue and expenses when cash is received or paid.

• Accrual basis accounting records revenue and expenses when they are earned or incurred, regardless of when cash is received or paid.

• Hybrid basis accounting combines elements of both cash basis and accrual basis accounting.

• Examples of cash basis accounting include small businesses and individuals who track income and expense...read more

The 3 golden rules for accounting are the rules of debit and credit, the rule of assets = liabilities + equity, and the revenue recognition principle.

• Rule of Debit and Credit: Every transaction has equal debits and credits, ensuring the accounting equation stays balanced.

• Assets = Liabilities + Equity: This equation must always hold true, representing the financial position of a company.

• Revenue Recognition Principle: Revenue should be recognized when it is earned, not necessar...read more