10+ Vortex Engineering Interview Questions and Answers

Month end closing procedures are the steps taken to finalize financial statements at the end of each month.

• Reconciling accounts

• Posting adjusting entries

• Reviewing financial statements

• Preparing reports for management

• Closing temporary accounts

• Ensuring compliance with accounting standards

• Archiving financial records

• Preparing for the next month's accounting cycle

Accumulated Depreciation is the total depreciation expense recognized for an asset over its useful life.

• Accumulated Depreciation is a contra-asset account that is subtracted from the asset's cost to determine its net book value.

• It represents the cumulative amount of depreciation expense recorded for an asset since its acquisition.

• Accumulated Depreciation increases over time as depreciation expense is recognized.

• It is shown on the balance sheet as a negative value.

• For example,...read more

Unbilled revenue refers to revenue that has been earned but not yet invoiced to the customer.

• Unbilled revenue is a liability on the balance sheet until it is invoiced.

• It represents the amount of revenue that the company has recognized but has not yet received payment for.

• Unbilled revenue can occur in industries where services are provided over a period of time, such as consulting or software development.

• For example, if a consulting firm completes a project but has not yet sen...read more

Deferred revenue is a concept where revenue is received in advance but recognized as income over time as the goods or services are delivered.

• Deferred revenue is a liability on the balance sheet until it is earned.

• When revenue is received in advance, it is recorded as a debit to cash and a credit to deferred revenue.

• As the goods or services are delivered, the deferred revenue is recognized as income by debiting deferred revenue and crediting revenue.

• Examples of deferred revenu...read more

Accrual is recognizing revenue and expenses when they are incurred, provision for depreciation is setting aside funds for asset depreciation, bad debts are uncollectible debts, journal entries record financial transactions.

• Accrual is the accounting method of recognizing revenue and expenses when they are incurred, regardless of when cash is exchanged.

• Provision for depreciation is the allocation of funds to account for the decrease in value of assets over time.

• Bad debts are de...read more

COGS can be found by subtracting ending inventory from beginning inventory and adding purchases. Unbilled revenue is revenue that has been earned but not yet billed to the customer.

• COGS = Beginning Inventory + Purchases - Ending Inventory

• Unbilled revenue is revenue recognized in the income statement but not yet invoiced to the customer

• Unbilled revenue is a liability on the balance sheet until it is invoiced

Accrual is recognizing revenue and expenses when they are incurred, not when cash is exchanged. Deferred revenue is when payment is received before revenue is earned.

• Accrual accounting matches revenue and expenses to the time period they are incurred, not when cash is exchanged

• Deferred revenue is when a company receives payment for goods or services before they are actually delivered or earned

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

Unbilled revenue refers to revenue that has been earned but not yet invoiced to the customer.

• Unbilled revenue is recorded as a current asset on the balance sheet.

• The journal entry for unbilled revenue involves debiting unbilled receivables and crediting revenue.

• Once the invoice is generated, the unbilled revenue account is credited and accounts receivable is debited.

• Unbilled revenue is common in service-based industries where work is completed before invoicing.

• Unbilled revenu...read more

Outstanding expenses are unpaid bills while accrued expenses are expenses incurred but not yet paid.

• Outstanding expenses are recorded as accounts payable on the balance sheet.

• Accrued expenses are recorded as liabilities on the balance sheet.

• Examples of outstanding expenses include unpaid rent, utilities, and vendor invoices.

• Examples of accrued expenses include salaries, interest, and taxes.

• Both outstanding and accrued expenses are recognized in the income statement as expense...read more

Unbilled revenue should be accounted for when it is earned but not yet invoiced to the customer.

• Recognize unbilled revenue when the performance obligation is satisfied and revenue is earned.

• Record unbilled revenue as an asset on the balance sheet.

• Adjust unbilled revenue periodically to reflect the actual amount that should be billed to the customer.

• Example: A construction company completes a project in December but does not bill the customer until January. The revenue earned ...read more

Provision for bad debts is an accounting entry made to account for potential losses due to non-payment of debts.

• Provision for bad debts is a contra asset account that reduces accounts receivable on the balance sheet.

• It is based on an estimate of the percentage of accounts receivable that will not be collected.

• The entry is made by debiting the provision for bad debts account and crediting the accounts receivable account.

• The provision for bad debts account is adjusted periodica...read more

Realised forex gain/loss is when the exchange rate changes and the transaction is completed, while unrealised forex gain/loss is when the exchange rate changes but the transaction is not completed.

• Realised forex gain/loss is recorded when an actual transaction occurs and the exchange rate has changed since the initial transaction.

• Unrealised forex gain/loss is recorded when the exchange rate changes but the transaction has not been completed yet.

• Realised gain/loss affects the ...read more

Journal entries for deferred revenue and unbilled revenue

• Deferred revenue journal entry: Debit Cash/Accounts Receivable, Credit Deferred Revenue

• Unbilled revenue journal entry: Debit Unbilled Revenue, Credit Revenue

• Example: Deferred revenue journal entry - Debit Accounts Receivable $1,000, Credit Deferred Revenue $1,000

• Example: Unbilled revenue journal entry - Debit Unbilled Revenue $500, Credit Revenue $500

Adjustments in consolidation involve eliminating intercompany transactions, adjusting for differences in accounting policies, and recognizing goodwill.

• Eliminating intercompany transactions to avoid double counting

• Adjusting for differences in accounting policies to ensure consistency

• Recognizing goodwill to account for the premium paid in acquisitions

Accrual of expenses refers to recognizing expenses in the period they are incurred, regardless of when they are paid.

• Accrual of expenses helps in matching expenses with revenues in the same accounting period.

• Examples include recognizing salaries expense for work done by employees even if the payment is made in the next month.

• Another example is recognizing interest expense on a loan even if the payment is due in the next quarter.

Unearned revenue is money received by a company for goods or services that have not yet been provided.

• Unearned revenue is a liability on the company's balance sheet until the goods or services are delivered.

• It represents an obligation to provide goods or services in the future.

• Common examples include prepaid rent, magazine subscriptions, and advance payments for services.

• As the goods or services are provided, the unearned revenue is recognized as revenue on the income stateme...read more