Edwin Corporate Law Firm Interview Questions and Answers

The three branches of accounting are financial accounting, management accounting, and cost accounting.

• Financial accounting focuses on reporting financial information to external stakeholders.

• Management accounting involves providing financial information to internal management for decision-making.

• Cost accounting deals with analyzing and controlling costs within a company.

• Each branch serves a different purpose and audience in the accounting field.

The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.

• It lists a company's assets, liabilities, and shareholders' equity.

• Assets are what the company owns, such as cash, inventory, and property.

• Liabilities are what the company owes, such as loans and accounts payable.

• Shareholders' equity represents the company's net worth, calculated as assets minus liabilities.

• The balance sheet follows the accounting ...read more

Working capital is the difference between a company's current assets and current liabilities.

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

• It represents the amount of liquid assets available to a company to fund its day-to-day operations.

• Formula: Working Capital = Current Assets - Current Liabilities

• Positive working capital indicates that a company has enough assets to cover its short-term liabilities, while negative workin...read more

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

• There are three types of accounting golden rules: Personal Account, Real Account, and Nominal Account.

• Personal Account: Debit the receiver, credit the giver. Example: When cash is received from a customer, cash account is debited.

• Real Account: Debit what comes in, credit what goes out. Example: Purchase of machinery is debited to machinery account.

• Nominal Account: Debit...read more

Depreciation is the allocation of the cost of an asset over its useful life.

• Depreciation is a non-cash expense that reduces the value of an asset over time.

• Types of depreciation include straight-line, double declining balance, units of production, and sum-of-the-years-digits.

• Straight-line depreciation evenly spreads the cost of an asset over its useful life.

• Double declining balance front-loads depreciation expenses.

• Units of production depreciation is based on the actual usage...read more