Philips Senior Accounting Specialist Interview Questions and Answers

Accrual accounting is a method of accounting where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

• Revenue is recognized when it is earned, not necessarily when cash is received

• Expenses are recorded when they are incurred, not necessarily when they are paid

• Accrual accounting provides a more accurate picture of a company's financial position and performance over ...read more

Prepayment is an advance payment made for goods or services before they are received or delivered.

• Prepayment is recorded as an asset on the balance sheet until the goods or services are received or delivered.

• Once the goods or services are received or delivered, the prepayment is then recognized as an expense on the income statement.

• Examples of prepayments include rent paid in advance, insurance premiums, and subscripti

Accounts payable is the amount of money a company owes to its suppliers or vendors for goods or services purchased on credit.

• Accounts payable is a liability on the balance sheet.

• It represents the amount of money a company owes for goods or services received but not yet paid for.

• Accounts payable is typically recorded when an invoice is received from a supplier.

• It is an important aspect of managing a company's cash flow ...read more

Fixed assets are long-term tangible assets that are used in the production of goods or services and are not intended for sale.

• Fixed assets are physical assets like buildings, machinery, vehicles, and equipment.

• They are used by a company for more than one accounting period.

• Fixed assets are not intended for sale in the normal course of business.

• They are recorded on the balance sheet at their original cost minus accumulat...read more

To capitalise a plant, you can allocate costs associated with acquiring, constructing, or improving the plant as assets on the balance sheet.

• Determine the cost of the plant, including purchase price, installation costs, and any other costs directly related to getting the plant ready for use.

• Record the plant as a fixed asset on the balance sheet, categorising it appropriately based on its useful life and depreciation me...read more