Essence Global Services Interview Questions and Answers

A contingent liability is a potential liability that may or may not occur depending on the outcome of a future event.

• Contingent liabilities are disclosed in the notes to financial statements.

• They are not recognized on the balance sheet but may have to be recorded if certain conditions are met.

• Examples include pending lawsuits, warranties, and guarantees.

• The likelihood of the contingent liability and the amount involved are considered when determining whether to recognize it.

A stale cheque is a check that is not cashed or deposited by the recipient within a certain period of time, usually 6 months.

• Stale cheques are not valid for payment after a certain period of time, typically 6 months.

• Banks may refuse to honor stale cheques due to the risk of fraud or insufficient funds.

• Recipients should deposit or cash cheques promptly to avoid them becoming stale.

• Stale cheques can be reissued by the issuer if necessary.

• Example: If a recipient receives a chequ...read more

Collateral security is an asset or property that a borrower offers to a lender as a guarantee for a loan.

• Collateral security provides a form of protection for the lender in case the borrower defaults on the loan.

• Common types of collateral security include real estate, vehicles, equipment, or investments.

• The value of the collateral is assessed by the lender to determine the amount of the loan that can be provided.

• If the borrower fails to repay the loan, the lender may seize an...read more

Primary security refers to the first layer of security measures implemented to protect assets, data, or information.

• Primary security is the initial level of protection put in place to safeguard against unauthorized access or threats.

• It includes measures such as passwords, encryption, firewalls, and access controls.

• Examples of primary security measures include setting up strong passwords for accounts, using encryption to protect sensitive data, and implementing firewalls to bl...read more

An escrow account is a financial arrangement where a third party holds and regulates payment of funds for two parties involved in a transaction.

• Used in real estate transactions to hold funds until all conditions are met

• Common in mergers and acquisitions to hold funds for potential liabilities

• Can be used in online transactions to ensure both parties fulfill their obligations