Prime Property Ventures Interview Questions and Answers

Auditing is the process of examining and verifying financial records to ensure accuracy and compliance with laws and regulations.

• Auditing involves reviewing financial statements, records, and transactions.

• The goal of auditing is to provide assurance that financial information is accurate and reliable.

• Auditors may also identify areas for improvement in financial reporting and internal controls.

• Examples of audits include financial statement audits, internal audits, and complian...read more

No, land is not depreciated as it is considered to have an indefinite useful life.

• Land is not subject to depreciation because it is considered to have an indefinite useful life.

• Depreciation is only applicable to assets that have a limited useful life, such as buildings or machinery.

• The cost of land is typically not allocated over time like other assets, but rather recorded at its original cost on the balance sheet.

• Land may appreciate in value over time, rather than depreciate...read more

Materiality and PM refer to the concept of significance in auditing, with materiality being the threshold for financial information to be considered important and PM being the performance materiality set below materiality.

• Materiality is the threshold at which financial information becomes significant enough to influence the decisions of users of the financial statements.

• Performance materiality (PM) is set below materiality and is used to determine the extent of misstatements ...read more

The golden rules of accounting are basic principles that guide the process of recording financial transactions.

• The golden rules include: Debit what comes in, Credit what goes out; Debit the receiver, Credit the giver; Debit expenses and losses, Credit income and gains.

• These rules help ensure that financial transactions are accurately recorded and classified in the accounting system.

• For example, when a company receives cash from a customer, the cash account is debited (increas...read more

Entry for bad debts is made to reflect the amount of accounts receivable that are unlikely to be collected.

• Bad debts are recorded as an expense on the income statement.

• The entry typically involves debiting the bad debt expense account and crediting the accounts receivable account.

• It is important to regularly review and adjust the bad debt allowance to reflect the most accurate estimate of uncollectible accounts.

• Example: If a customer declares bankruptcy and is unable to pay t...read more