1) What is hedge fund? 2) What is IRR and formula? 3) Journal entry for Accrual and Prepaid?

Question

Accepted Answer

Fund Accountant interview questions on hedge funds, IRR formula, and journal entries for accrual and prepaid.

Hedge fund is an investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets.
IRR (Internal Rate of Return) is a metric used to measure the profitability of an investment. Formula: NPV = 0 = CF0 + CF1 / (1 + IRR) + CF2 / (1 + IRR)^2 + ... + CFn / (1 + IRR)^n
Journal entry for accrual: Debit expense account, credit accrued liability account. Journal entry for prepaid: Debit prepaid asset account, credit cash account.

Accepted Answer

Hedge Fund is private investment which used managed by professionals to make profits from investment for which they initially charge management fees and they take risk for that investment and make income, when income made they take performance fees out of profits.

1) What is hedge fund? 2) What is IRR and formula? 3) Journal entry for Accrual and Prepaid?

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