10+ Sunrise Instruments Interview Questions and Answers

Journal entry for sale of fixed assets with profit involves debiting cash and accumulated depreciation, crediting fixed asset and gain on sale of asset accounts.

• Debit cash account for the amount received from the sale

• Debit accumulated depreciation account to remove the accumulated depreciation on the asset

• Credit fixed asset account to remove the cost of the asset from the books

• Credit gain on sale of asset account for the profit made on the sale

P2P cycle refers to the procure-to-pay cycle, which is the process of purchasing goods or services and making payments for them.

• The cycle starts with the identification of a need for goods or services.

• A purchase requisition is created and approved by the appropriate authority.

• A purchase order is generated and sent to the supplier.

• The supplier delivers the goods or services.

• The goods or services received are matched with the purchase order and invoice.

• An invoice is generated b...read more

Yes, aging schedules are commonly used in vendor creation to track outstanding payments.

• Aging schedules help track how long invoices have been outstanding for each vendor

• They provide a snapshot of the current status of accounts payable

• They are useful for identifying overdue payments and managing cash flow effectively

Accrual is an accounting method that recognizes revenues and expenses when they are incurred, regardless of when cash is exchanged.

• Accrual accounting matches revenues with expenses in the same accounting period

• It provides a more accurate picture of a company's financial position

• Example: A company records revenue when it earns it, even if the customer has not yet paid

Prepaid expenses are expenses that have been paid in advance but have not yet been incurred.

• Prepaid expenses are considered assets on the balance sheet until they are used up or expire.

• Common examples of prepaid expenses include prepaid rent, insurance premiums, and subscriptions.

• Prepaid expenses are initially recorded as assets and then gradually expensed over time as they are used or consumed.

Accrued expenses are expenses that have been incurred but not yet paid for.

• Accrued expenses are recorded as liabilities on the balance sheet

• They represent expenses that have been recognized but not yet paid

• Examples include accrued salaries, interest, and taxes

The golden rule of accounting states that debit what comes in and credit what goes out.

• Debit what comes in and credit what goes out

• Assets = Liabilities + Equity

• Revenue = Expenses + Net Income

Prepaid income is income received in advance before it is earned.

• Prepaid income is recorded as a liability on the balance sheet until it is earned.

• Once the income is earned, it is recognized as revenue on the income statement.

• Common examples of prepaid income include rent payments, subscription fees, and insurance premiums.

• Prepaid income is also known as unearned income or deferred income.

Accruals are adjustments made to financial statements to ensure that revenues and expenses are recognized in the period they occur, regardless of when cash is exchanged.

• Accruals help match revenues and expenses to the period in which they are incurred

• They are necessary for accurate financial reporting

• Examples include accrued interest, accrued wages, and accrued taxes