30+ Accounts Associate Interview Questions and Answers

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

• Depreciation is a method used in accounting to allocate the cost of an asset over its useful life.

• It represents the decrease in value of an asset due to wear and tear, obsolescence, or other factors.

• Depreciation expense is recorded on the income statement and reduces the net income of a company.

• Common methods of calculating depreciation include straight-line, declining balance, and units of...read more

Accounts receivable are amounts owed by customers for goods or services already delivered. Bills receivable are written promises to pay at a future date.

• Accounts receivable are generated from sales transactions.

• Bills receivable are generated from loan transactions.

• Accounts receivable are short-term and due within a year.

• Bills receivable are long-term and due after a year.

• Accounts receivable are unsecured debts.

• Bills receivable are secured debts.

• Examples of accounts receivable...read more

The three golden rules in accounting are the rules of debit and credit, which govern the recording of financial transactions.

• The first golden rule is the rule of debit and credit, which states that for every debit entry, there must be a corresponding credit entry of equal amount.

• The second golden rule is the rule of personal accounts, which states that debit the receiver and credit the giver.

• The third golden rule is the rule of real accounts, which states that debit what come...read more

Accounting Standards (AS) are guidelines for financial reporting. Ind-AS is the Indian version of International Financial Reporting Standards (IFRS).

• AS are issued by the Institute of Chartered Accountants of India (ICAI) to ensure consistency and transparency in financial reporting.

• Ind-AS is based on IFRS and is mandatory for certain companies in India.

• Ind-AS aims to improve the quality of financial reporting and make it more comparable globally.

• Ind-AS covers areas such as re...read more

Accounting is the process of recording, classifying, and summarizing financial transactions to provide information for decision-making.

• Accounting involves keeping track of financial transactions

• It includes classifying and summarizing financial data

• The information is used for decision-making

• Advanced Excel skills like pivot tables and vlook up are useful in accounting

• Pivot tables can be used to summarize and analyze large amounts of data

• Vlook up can be used to search for specif...read more

I have a variety of interests that keep me engaged and motivated.

• I enjoy reading books on various topics, from fiction to self-help.

• I am passionate about fitness and enjoy trying out new workout routines.

• I love traveling and exploring new cultures and cuisines.

• I am an avid music listener and enjoy attending concerts and festivals.

• I also enjoy volunteering and giving back to my community.

The Golden rules of accounting are basic principles to maintain accurate financial records.

• The first rule is the Debit and Credit rule, which states that for every debit entry, there must be a corresponding credit entry.

• The second rule is the Real Account rule, which states that all assets and liabilities have a debit and credit balance respectively.

• The third rule is the Personal Account rule, which states that all transactions involving individuals or organizations must be r...read more

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

• There are three golden rules of accounting: debit the receiver, credit the giver; debit what comes in, credit what goes out; debit expenses and losses, credit income and gains.

• These rules ensure that every financial transaction is recorded accurately and consistently.

• For example, if a company receives cash from a customer, the cash account is debited (increased) and t...read more

Five common financial ratios are: current ratio, quick ratio, debt-to-equity ratio, return on equity, and gross profit margin.

• Current ratio: Current assets divided by current liabilities. Example: Current assets of $100,000 and current liabilities of $50,000 would result in a current ratio of 2:1.

• Quick ratio: (Current assets - inventory) divided by current liabilities. Example: If current assets are $100,000, inventory is $20,000, and current liabilities are $50,000, the quic...read more

Marginal costing is a costing technique where only variable costs are considered for decision-making purposes.

• Marginal costing helps in determining the contribution margin of a product or service.

• It is useful in short-term decision making such as pricing, make or buy decisions, etc.

• Fixed costs are not considered in marginal costing as they are assumed to remain constant.

• It is also known as direct costing or variable costing.

• Example: A company wants to introduce a new product ...read more

Reconciliation is the process of comparing two sets of records to ensure they are in agreement.

• It involves identifying and resolving any discrepancies between the two sets of records.

• Common examples include bank statement reconciliation, inventory reconciliation, and accounts receivable reconciliation.

• Reconciliation is important for ensuring accurate financial reporting and identifying any errors or fraud.

• It can be done manually or with the help of software tools.

• The process ...read more

Depreciation is the allocation of the cost of an asset over its useful life, amortization is the allocation of the cost of intangible assets over their useful life, and depression is a mental health condition.

• Depreciation is used for tangible assets like buildings and machinery, amortization is used for intangible assets like patents and copyrights, and depression is a mental health disorder.

• Depreciation is a non-cash expense that reduces the value of an asset on the balance ...read more

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

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

• Double declining balance method accelerates depreciation in the early years of an asset's life.

• Units of production method depreciates based on the actual usage of the asset.

• Sum of years digits method accelerates depreciation but in a more gradual manner.

Bookkeeping is the process of recording financial transactions and maintaining financial records for a business.

• Bookkeeping involves recording all financial transactions of a business, such as sales, purchases, and payments.

• It helps in tracking income and expenses, monitoring cash flow, and preparing financial statements.

• Accurate bookkeeping is essential for tax compliance and making informed business decisions.

• Common bookkeeping methods include single-entry and double-entry ...read more

Schedule III of the Companies Act, 2013 has been recently amended to include new disclosure requirements for financial statements.

• Recent changes in Schedule III include additional disclosures related to lease accounting under Ind AS 116.

• There are new requirements for reporting related party transactions in financial statements.

• Changes have been made to the format and presentation of financial statements to align with the latest accounting standards.

• Disclosure requirements for...read more

Accrued income refers to revenue that has been earned but not yet received.

• Accrued income is recorded as a debit to an asset account and a credit to a revenue account.

• Examples include interest income earned but not yet received, rent income earned but not yet received, etc.

Accrual basis of accounting recognizes revenues and expenses when they are incurred, regardless of when cash is exchanged.

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

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

• Provides a more accurate representation of a company's financial position and performance

• Required by GAAP for most businesses

There is no fixed number of heads in income tax as it varies based on the organizational structure.

• The number of heads in income tax varies based on the organizational structure and hierarchy.

• There are different levels of officers in income tax such as Income Tax Officer, Assistant Commissioner, Commissioner, etc.

• The number of heads also depends on the workload and jurisdiction of the income tax office.

• It is not possible to give a specific number of heads in income tax withou...read more

IFRS stands for International Financial Reporting Standards.

• IFRS is a set of accounting standards developed by the International Accounting Standards Board (IASB).

• It is used by companies to prepare and present their financial statements.

• IFRS is designed to provide a common language for business affairs so that company accounts are understandable and comparable across international boundaries.

• Examples of IFRS include IFRS 9 (Financial Instruments), IFRS 15 (Revenue from Contra...read more

Internal Audit is a process where an organization's financial and operational processes are reviewed by an independent party.

• Internal Audit helps ensure compliance with regulations and identifies areas for improvement.

• It provides assurance to stakeholders that the organization's operations are being conducted effectively and efficiently.

• Examples of internal audit activities include reviewing financial statements, assessing internal controls, and investigating fraud.

• Internal A...read more

Prepare profit and loss statement from trial balance

• Start with the revenue section, listing all income accounts such as sales, interest income, etc.

• Then list all expenses in the expense section, such as salaries, rent, utilities, etc.

• Calculate the net income by subtracting total expenses from total revenue.

• Include any non-operating income or expenses in a separate section.

• Finally, present the net income at the bottom of the statement.

• Ensure the statement follows the standard ...read more

GST is calculated by multiplying the taxable value of goods or services by the applicable GST rate.

• Determine the taxable value of the goods or services

• Identify the applicable GST rate (5%, 12%, 18%, or 28%)

• Multiply the taxable value by the applicable GST rate to get the GST amount

• Add the GST amount to the taxable value to get the total amount payable

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

• There are three golden rules of accounting: Debit the receiver, Credit the giver; Debit what comes in, Credit what goes out; Debit expenses and losses, Credit income and gains.

• These rules help maintain the balance in the accounting equation: Assets = Liabilities + Equity.

• For example, when a company receives cash from a customer, the cash account is debited (increased) an...read more

Accrued expense is an expense that has been incurred but not yet paid.

• Accrued expenses are recorded as liabilities on the balance sheet.

• They are expenses that have been incurred but not yet paid for, such as salaries, interest, and taxes.

• Accrued expenses are typically recognized at the end of an accounting period.

• For example, if a company has employees who have worked but not yet been paid, the company would record an accrued expense for the amount owed to the employees.

• Accru...read more

Journal entries are records of financial transactions in chronological order.

• Journal entries are used to record financial transactions in a company's accounting system.

• They include the date of the transaction, the accounts involved, and the amount of the transaction.

• Journal entries are used to create the general ledger, which is used to create financial statements.

• Examples of journal entries include recording a sale, recording a purchase, and recording depreciation.

• Journal en...read more

Fixed capital refers to the funds invested in long-term assets that are essential for the operation of a business.

• Fixed capital includes assets like land, buildings, machinery, and equipment.

• These assets are not meant for resale but are used to generate income over an extended period of time.

• Fixed capital is crucial for the production and delivery of goods and services.

• It is a key component of a company's overall capital structure.

• Examples of fixed capital include factories, ...read more

RCM stands for Revenue Cycle Management.

• It is the process of managing the financial aspects of a patient's healthcare journey.

• It includes tasks such as patient registration, insurance verification, coding and billing, and collections.

• The goal of RCM is to optimize revenue for healthcare providers while ensuring timely and accurate payment.

• RCM is commonly used in the medical field, but can also be applied to other industries that involve billing and collections.

Basic principles of accounting include consistency, relevance, reliability, comparability, and materiality.

• Consistency: Accounting methods and procedures should be applied consistently from one period to another.

• Relevance: Financial information should be relevant to the decision-making needs of users.

• Reliability: Financial information should be reliable and free from bias or error.

• Comparability: Financial information should be comparable with other periods or other companies....read more

Golden Rules of account are basic principles of accounting that serve as the foundation for recording financial transactions.

• Debit what comes in, credit what goes out

• Debit the receiver, credit the giver

• Debit expenses and losses, credit income and gains

Types of accounts include asset, liability, equity, revenue, and expense accounts.

• Asset accounts represent resources owned by the company, such as cash, inventory, and equipment.

• Liability accounts represent obligations owed by the company, such as loans and accounts payable.

• Equity accounts represent the owner's stake in the company.

• Revenue accounts track income generated by the company, such as sales revenue.

• Expense accounts track costs incurred by the company, such as salari...read more