RSM US in India Tax Associate Interview Questions and Answers

Deferred revenue is income received by a company in advance of earning it, resulting in a liability on the balance sheet.

• Deferred revenue represents a liability for the company until the goods or services are delivered to the customer.

• It is common in subscription-based businesses where customers pay upfront for services that will be provided over time.

• Once the revenue is earned, it is recognized on the income statement...read more

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

• The golden rule of accounting is that for every debit entry, there must be an equal credit entry.

• There are three types of accounts: real, personal, and nominal. The golden rules differ for each type of account.

• For real accounts, the golden rule is: Debit what comes in, credit what goes out.

• For personal account...read more

Accrual concept is a principle of recognizing revenue and expenses when they are incurred, regardless of when cash is exchanged.

• Revenue and expenses are recorded when they are earned or incurred, not when cash is received or paid.

• This concept ensures that financial statements accurately reflect the financial position of a company.

• For example, if a company provides services in December but doesn't receive payment until ...read more

The quick ratio is a financial metric used to measure a company's ability to meet its short-term obligations with its most liquid assets.

• Quick ratio is calculated by dividing quick assets (cash, marketable securities, accounts receivable) by current liabilities.

• A quick ratio of 1 or higher indicates that a company has enough liquid assets to cover its short-term liabilities.

• A quick ratio below 1 may suggest that a comp...read more