FactSet Interview Questions, Process, and Tips

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 all personal accounts are debited for the receiver and credited for the giver.

• The second golden rule is the Real Account rule, which states that all real accounts are debited for what comes in and credited for what goes out.

• The third golden rule is ...read more

Provision is a liability that is uncertain in timing or amount, while reserve is a portion of profits set aside for specific purposes.

• Provision is a liability that is recognized in the financial statements when there is uncertainty about the timing or amount of an obligation.

• Reserve is a portion of profits that is set aside by a company for specific purposes, such as future investments, contingencies, or dividends.

• Prov...read more

Semi-variable costs have both fixed and variable components, while variable costs change proportionally with output.

• Semi-variable costs have a fixed portion that remains constant regardless of output, and a variable portion that changes with output.

• Examples of semi-variable costs include utilities, phone bills, and maintenance costs.

• Variable costs change proportionally with output, such as direct materials and labor co...read more

The gross profit formula calculates the profit made after deducting the cost of goods sold from the total revenue.

• Gross profit = Total revenue - Cost of goods sold

• Total revenue includes all sales revenue generated by the company

• Cost of goods sold includes the direct costs associated with producing or purchasing the goods sold

• Gross profit is an indicator of a company's profitability before considering other expenses

• Exam...read more

Direct expenses are related to production while indirect expenses are not directly related to production.

• Direct expenses are incurred in the production process and can be easily traced to a product or service.

• Indirect expenses are not directly related to production and cannot be easily traced to a product or service.

• Direct expenses are variable costs while indirect expenses are fixed costs.

• Examples of direct expenses i...read more

Activities in Cash Flow Statement include operating, investing, and financing activities.

• Operating activities involve cash flows from day-to-day business operations, such as sales and expenses.

• Investing activities include cash flows from buying or selling long-term assets, like property or equipment.

• Financing activities involve cash flows related to raising or repaying capital, such as issuing stocks or paying dividend...read more

Depreciation methods include straight-line, declining balance, and sum-of-the-years' digits.

• Straight-line method charges an equal amount of depreciation each year.

• Declining balance method charges a higher percentage of depreciation in the early years of an asset's life.

• Sum-of-the-years' digits method charges more depreciation in the early years and less in the later years.

• Other methods include units of production and M...read more

Derivatives are financial contracts that derive their value from an underlying asset or security.

• Derivatives can be used for hedging or speculation.

• Examples of derivatives include futures, options, and swaps.

• Derivatives can be traded on exchanges or over-the-counter.

• Derivatives can be used to manage risk or to take on additional risk for potential profit.

• Derivatives can be complex and require specialized knowledge to u

Marginal costs refer to the cost of producing one additional unit of a product, while additional costs refer to any extra costs incurred beyond the initial cost.

• Marginal costs are the cost of producing one more unit of a product, while additional costs are any extra costs incurred beyond the initial cost.

• Marginal costs are variable costs that increase or decrease with the production of one more unit, while additional c...read more

Goodwill can be calculated using the acquisition method or the impairment method.

• Acquisition method involves subtracting the fair value of net assets acquired from the purchase price.

• Impairment method involves comparing the carrying value of goodwill to its implied fair value.

• Goodwill is only recognized in a business combination.

• Goodwill is tested for impairment annually or when there is a triggering event.

• Goodwill is ...read more

EPS stands for Earnings Per Share, which is the portion of a company's profit allocated to each outstanding share of common stock.

• EPS is a financial metric used to evaluate a company's profitability.

• It is calculated by dividing the company's net income by the number of outstanding shares.

• EPS can be used to compare the profitability of different companies or to track a company's performance over time.

• A higher EPS indica...read more

I rate myself as Very Good in accounting.

• I have a strong understanding of accounting principles and practices.

• I have experience in preparing financial statements and analyzing financial data.

• I am proficient in using accounting software such as QuickBooks and Excel.

• I have received positive feedback from previous employers and colleagues on my accounting skills.

IPO stands for Initial Public Offering. It is the process by which a private company becomes a publicly-traded company by offering its shares to the public.

• IPO is a way for companies to raise capital by selling shares to the public.

• It allows private companies to become publicly traded on stock exchanges.

• During an IPO, shares are offered to institutional investors and individual investors.

• The company's valuation and sha...read more

Bonds are debt securities that are issued by companies, governments, and other organizations to raise capital.

• Government bonds: Issued by governments to finance their operations

• Corporate bonds: Issued by companies to finance their operations

• Municipal bonds: Issued by local governments to finance public projects

• Treasury bonds: Issued by the US government to finance its operations

• Junk bonds: High-risk, high-yield bonds i

Capital markets are where financial instruments such as stocks, bonds, and commodities are traded between investors and institutions.

• Capital markets are a platform for companies to raise capital by issuing stocks and bonds.

• Investors can buy and sell financial instruments in the capital markets.

• The capital markets are divided into primary and secondary markets.

• Examples of capital markets include the New York Stock Excha...read more

Short term liabilities are debts or obligations that are due within a year or less.

• Short term loans

• Accounts payable

• Accrued expenses

• Current portion of long-term debt

• Unearned revenue