Venky's Accountant Interview Questions and Answers

Goodwill is an intangible asset that represents the value of a company's reputation, brand, and customer loyalty.

• Goodwill is recorded on a company's balance sheet when it acquires another company for a price higher than the fair market value of its net assets.

• It is calculated as the difference between the purchase price and the fair market value of the acquired company's assets and liabilities.

• Goodwill is not amortized...read more

Major errors in accounting include incorrect data entry, failure to reconcile accounts, and misclassification of expenses.

• Incorrect data entry can lead to inaccurate financial statements.

• Failure to reconcile accounts can result in missing or duplicate transactions.

• Misclassification of expenses can distort the true financial position of a company.

Double entry is a fundamental accounting concept where every transaction has equal and opposite effects on at least two accounts.

• Every transaction involves at least two accounts - one account is debited and the other is credited.

• Debits and credits must always balance, ensuring the accounting equation (Assets = Liabilities + Equity) remains in equilibrium.

• Double entry helps maintain accuracy in financial records and all...read more

Working capital is the difference between current assets and current liabilities, representing the funds available for day-to-day operations.

• Working capital is a measure of a company's operational efficiency and short-term financial health.

• It is calculated by subtracting current liabilities from current assets.

• Positive working capital indicates that a company has enough assets to cover its short-term liabilities.

• Negati...read more

Financial statements are documents that provide information about a company's financial performance and position.

• Financial statements include the balance sheet, income statement, and cash flow statement.

• Balance sheet shows assets, liabilities, and equity at a specific point in time.

• Income statement shows revenues, expenses, and profits over a period of time.

• Cash flow statement shows how cash is generated and used by a ...read more