NDS InfoServ Interview Questions and Answers

Working capital is the measure of a company's liquidity and operational efficiency. It represents the difference between current assets and current liabilities.

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

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

• Positive working capital indicates that a company has enough assets to cover its short-term liabilities.

• Negative working capital means that a company's curr...read more

Journal entries for accounts receivable record the increase and decrease in the amount owed by customers.

• When a sale is made on credit, the journal entry debits accounts receivable and credits sales revenue.

• When a customer makes a payment, the journal entry debits cash and credits accounts receivable.

• If a customer returns goods, the journal entry debits sales returns and allowances and credits accounts receivable.

• If an account is deemed uncollectible, the journal entry debits...read more

The journal entry for accounts payable is a credit to accounts payable and a debit to the corresponding expense or asset account.

• Accounts payable is a liability account that represents the amount owed to suppliers or vendors for goods or services received.

• When recording the journal entry for accounts payable, the accounts payable account is credited to increase the liability.

• The corresponding expense or asset account is debited to reflect the increase in expenses or assets.

• Fo...read more

Bank reconciliation is the process of comparing and matching the balances in a company's accounting records with the balances on its bank statement.

• Bank reconciliation helps ensure that all transactions are recorded accurately in the company's books.

• It involves comparing the company's records of its bank account with the bank statement to identify any discrepancies.

• Common reasons for discrepancies include outstanding checks, deposits in transit, bank fees, and errors in recor...read more

Current assets are assets that are expected to be converted into cash or used up within one year.

• Includes cash, accounts receivable, inventory, and prepaid expenses

• Listed on the balance sheet under assets

• Helps determine a company's liquidity and ability to pay off short-term obligations

The type of account refers to the classification of accounts based on their nature and purpose.

• There are five main types of accounts: assets, liabilities, equity, revenue, and expenses.

• Assets are resources owned by the company, such as cash, inventory, and equipment.

• Liabilities are obligations owed by the company, such as loans and accounts payable.

• Equity represents the owner's stake in the business.

• Revenue is the income generated from the company's operations.

• Expenses are th...read more

Tangible assets are physical assets that can be seen and touched.

• Real estate

• Machinery

• Vehicles

• Inventory

• Furniture and fixtures