20+ DJM Motors Interview Questions and Answers

Trading and profit and loss account is a financial statement that shows the company's revenue, expenses, and net profit or loss for a specific period.

• Trading and profit and loss account is prepared to determine the profitability of a business.

• It includes all the revenue earned and expenses incurred during a specific period.

• The account starts with the opening stock, includes purchases, sales, direct expenses, indirect expenses, and ends with the closing stock.

• The difference be...read more

Accounting is the process of recording, summarizing, and analyzing financial transactions of a business.

• Accounting involves recording financial transactions such as sales, purchases, and expenses.

• It includes summarizing the recorded transactions in financial statements like the balance sheet and income statement.

• Accounting also involves analyzing the financial data to provide insights and make informed business decisions.

• Characteristics of accounting include accuracy, relevan...read more

A bank reconciliation statement is a document that compares the bank statement with the company's cash records.

• It helps identify any discrepancies between the bank statement and the company's records.

• It ensures that all transactions are accurately recorded and accounted for.

• It includes adjustments for items such as outstanding checks, bank fees, and deposits in transit.

• The statement reconciles the ending balance on the bank statement with the adjusted cash balance in the comp...read more

Provision for doubtful debts is an accounting practice where a company sets aside funds to cover potential losses from customers who may not pay their debts.

• Provision for doubtful debts is a financial provision made by a company to account for potential bad debts.

• It is an estimate of the amount of money that a company expects to lose from customers who are unlikely to pay their debts.

• The provision is created by recording an expense in the company's financial statements, which...read more

The benefits of accounting include financial transparency, informed decision-making, and compliance with regulations.

• Provides financial transparency by accurately recording and reporting financial transactions

• Enables informed decision-making by providing timely and accurate financial information

• Helps in compliance with regulations and legal requirements

• Facilitates effective budgeting and financial planning

• Assists in measuring and evaluating business performance

• Enhances credib...read more

Communication is the process of exchanging information, ideas, and emotions between individuals or groups.

• Communication involves both verbal and non-verbal methods.

• It requires a sender, a message, a medium, and a receiver.

• Effective communication requires clarity, conciseness, and understanding.

• Active listening and feedback are important components of communication.

• Communication can be formal or informal, written or oral.

• Examples of communication include conversations, present...read more

Contingent liability refers to a potential liability that may arise in the future depending on the outcome of a specific event.

• It is a possible obligation that may arise from past events or current conditions

• It is not a certain liability but a potential one

• Examples include pending lawsuits, warranties, and guarantees

• Contingent liabilities are disclosed in financial statements

Accounting features include recording, classifying, summarizing, and interpreting financial transactions.

• Recording financial transactions

• Classifying transactions into different categories

• Summarizing transactions into financial statements

• Interpreting financial statements to make business decisions

First in first out (FIFO) is a method of inventory valuation based on the assumption that the first goods purchased are the first goods sold.

• FIFO assumes that the oldest inventory items are sold first

• It is commonly used in industries where the products have a limited shelf life, such as food and beverage

• FIFO results in higher cost of goods sold and lower ending inventory when prices are rising

• Example: A company buys 100 units of a product at $10 each on January 1 and 200 unit...read more

Profit and loss account is a financial statement that shows a company's revenues, expenses, and net income or loss for a specific period.

• It is also known as an income statement.

• It is used to determine a company's profitability.

• The revenue section includes sales, interest income, and other income.

• The expense section includes cost of goods sold, salaries, rent, and other expenses.

• The net income or loss is calculated by subtracting total expenses from total revenue.

• It is importa...read more

Journal entries are records of financial transactions in chronological order.

• Journal entries are used to record financial transactions in a company's accounting system.

• They include the date, accounts affected, and amounts debited or credited.

• Journal entries are the first step in the accounting cycle and are used to create the general ledger.

• Examples of journal entries include recording a sale, paying a bill, or adjusting an account balance.

• Journal entries must be accurate and...read more

LIFO method used in inventory management

• Last In First Out (LIFO) is a method used in inventory management to value and track inventory.

• Under LIFO, the most recently acquired or produced items are assumed to be sold or used first.

• This method assumes that the cost of the most recent inventory is the cost of goods sold.

• LIFO is commonly used when prices are rising, as it results in a lower taxable income due to higher cost of goods sold.

• Example: If a store purchases 10 units of a...read more

A triple column cash book is a financial record that contains three columns for cash transactions.

• It is used to record cash transactions in a business.

• The three columns are for cash received, cash paid, and balance.

• It helps in maintaining accurate records of cash transactions.

• It is commonly used by small businesses and individuals.

• Example: A business may use a triple column cash book to record daily sales, expenses, and cash balance.

A double column cash book is a bookkeeping record used to track both cash and bank transactions.

• It has two columns for recording transactions - one for cash and one for bank

• It helps in maintaining a record of all cash and bank transactions in a single book

• It facilitates easy reconciliation of bank statements with cash book

• Example: A company maintains a double column cash book to record all its cash and bank transactions

Planning concerns refer to the issues that need to be addressed while creating a plan.

• Planning concerns involve identifying the goals and objectives of the plan.

• It also involves determining the resources required to achieve those goals.

• Risk assessment and contingency planning are also important planning concerns.

• Examples of planning concerns include financial planning, project planning, and strategic planning.

Single column cash book is a cash book with only one column for recording cash transactions.

• It is a simple form of cash book used by small businesses.

• It records all cash receipts and payments in a single column.

• It does not differentiate between cash and bank transactions.

• It helps in maintaining a record of cash balance.

• Example: A stationary shop maintaining a single column cash book to record daily cash transactions.

Withdrawal cash refers to the act of taking out money from a bank account or ATM.

• Withdrawal cash is the opposite of depositing cash into an account.

• It can be done at a bank branch or through an ATM.

• The amount of cash that can be withdrawn may be limited by the bank or ATM.

• Withdrawal cash can also refer to taking money out of an investment account or retirement plan.

• It is important to keep track of all cash withdrawals to maintain accurate financial records.

Petty cash refers to a small amount of cash kept on hand for minor expenses.

• Petty cash is used for small expenses that are not worth writing a check for.

• It is usually managed by a designated employee who is responsible for keeping track of the cash and receipts.

• The amount of petty cash varies depending on the needs of the organization.

• Examples of petty cash expenses include office supplies, postage, and minor repairs.

• Petty cash is replenished periodically by submitting receip...read more

A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time.

• It is a snapshot of a company's financial position

• Assets are listed on the left side and liabilities and equity on the right side

• The balance sheet equation is Assets = Liabilities + Equity

• It helps investors and creditors to assess the financial health of a company

• Examples of assets include cash, inventory, and property

• Examples of liabilities include loan...read more

Trial balance is a statement of all ledger account balances to ensure that the total debits equal the total credits.

• Trial balance is prepared at the end of an accounting period

• It lists all the ledger accounts and their balances

• The purpose is to ensure that the total debits equal the total credits

• If the trial balance does not balance, it indicates an error in the accounting records

• It is the first step in the preparation of financial statements

Cash account is a record of all transactions involving cash inflows and outflows.

• Cash account is a part of the general ledger that records all cash transactions.

• It includes all cash receipts and payments made by the company.

• It helps in tracking the cash balance of the company.

• Examples of cash transactions include cash sales, cash purchases, and cash payments for expenses.

• Cash account is important for preparing financial statements and tax returns.

A bank account is a financial account maintained by a bank for a customer.

• A bank account allows customers to deposit and withdraw money

• It can be a savings account, checking account, or other types of accounts

• Bank accounts may earn interest on the balance

• Examples of banks include Chase, Wells Fargo, and Bank of America

A ledger is a book or computer program used to record financial transactions.

• A ledger is a record-keeping system for financial transactions.

• It contains all the accounts and transactions of a business.

• Ledgers can be physical books or computer programs.

• They are used to keep track of debits and credits, and to prepare financial statements.

• Examples of ledgers include general ledger, accounts payable ledger, and accounts receivable ledger.