Asiatic Marketing Company Interview Questions and Answers

Provision for doubtful debt is an estimation of the amount of bad debt that a company is likely to incur.

• Provision for doubtful debt is a contra account to accounts receivable.

• It is created by recording an adjusting entry at the end of each accounting period.

• The amount of the provision is based on historical data and management's judgment.

• It reduces the net value of accounts receivable on the balance sheet.

• If the actual bad debt expense is less than the provision, the excess ...read more

Revenue recognition as per IndAS 115

• Identify the contract with the customer

• Identify the performance obligations in the contract

• Determine the transaction price

• Allocate the transaction price to the performance obligations

• Recognize revenue when (or as) the entity satisfies a performance obligation

To audit purchase or expenses voucher, follow these steps:

• Verify the authenticity of the voucher

• Check if the voucher is properly authorized and approved

• Ensure that the voucher is supported by relevant documents

• Verify the accuracy of the voucher amount

• Check if the voucher is recorded in the correct account

• Perform a test check of a sample of vouchers

• Document the audit findings and report to management

The journal entry for lease accounting in the books of lessee involves recording the lease liability and right-of-use asset.

• Debit the right-of-use asset account for the present value of the lease payments

• Credit the lease liability account for the same amount

• Recognize interest expense on the lease liability

• Recognize amortization expense on the right-of-use asset

• Adjust for any lease payments made

• Example: Debit Right-of-Use Asset for $10,000, Credit Lease Liability for $10,000

• Ex...read more

Service industry provides intangible products while manufacturing industry produces tangible products.

• Service industry focuses on providing services rather than physical products

• Manufacturing industry involves the production of tangible goods

• Service industry is labor-intensive while manufacturing industry is capital-intensive

• Service industry has a higher degree of customer interaction compared to manufacturing industry

• Examples of service industry include hospitality, healthca...read more