60+ Chartered Accountant Interview Questions and Answers

Trading and profit and loss account is a financial statement that shows the company's revenue, expenses, and net profit or loss for a specific period.

• Trading and profit and loss account is prepared to determine the profitability of a business.

• It includes all the revenue earned and expenses incurred during a specific period.

• The account starts with the opening stock, includes purchases, sales, direct expenses, indirect expenses, and ends with the closing stock.

• The difference be...read more

Accounting is the process of recording, summarizing, and analyzing financial transactions of a business.

• Accounting involves recording financial transactions such as sales, purchases, and expenses.

• It includes summarizing the recorded transactions in financial statements like the balance sheet and income statement.

• Accounting also involves analyzing the financial data to provide insights and make informed business decisions.

• Characteristics of accounting include accuracy, relevan...read more

A bank reconciliation statement is a document that compares the bank statement with the company's cash records.

• It helps identify any discrepancies between the bank statement and the company's records.

• It ensures that all transactions are accurately recorded and accounted for.

• It includes adjustments for items such as outstanding checks, bank fees, and deposits in transit.

• The statement reconciles the ending balance on the bank statement with the adjusted cash balance in the comp...read more

Provision for doubtful debts is an accounting practice where a company sets aside funds to cover potential losses from customers who may not pay their debts.

• Provision for doubtful debts is a financial provision made by a company to account for potential bad debts.

• It is an estimate of the amount of money that a company expects to lose from customers who are unlikely to pay their debts.

• The provision is created by recording an expense in the company's financial statements, which...read more

Communication is the process of exchanging information, ideas, and emotions between individuals or groups.

• Communication involves both verbal and non-verbal methods.

• It requires a sender, a message, a medium, and a receiver.

• Effective communication requires clarity, conciseness, and understanding.

• Active listening and feedback are important components of communication.

• Communication can be formal or informal, written or oral.

• Examples of communication include conversations, present...read more

Contingent liability refers to a potential liability that may arise in the future depending on the outcome of a specific event.

• It is a possible obligation that may arise from past events or current conditions

• It is not a certain liability but a potential one

• Examples include pending lawsuits, warranties, and guarantees

• Contingent liabilities are disclosed in financial statements

Accounting features include recording, classifying, summarizing, and interpreting financial transactions.

• Recording financial transactions

• Classifying transactions into different categories

• Summarizing transactions into financial statements

• Interpreting financial statements to make business decisions

Triple balance sheet refers to the three financial statements - balance sheet, income statement, and cash flow statement.

• Triple balance sheet is a comprehensive financial reporting system that includes three financial statements.

• The three financial statements are balance sheet, income statement, and cash flow statement.

• The balance sheet shows the company's assets, liabilities, and equity at a specific point in time.

• The income statement shows the company's revenue, expenses, a...read more

First in first out (FIFO) is a method of inventory valuation based on the assumption that the first goods purchased are the first goods sold.

• FIFO assumes that the oldest inventory items are sold first

• It is commonly used in industries where the products have a limited shelf life, such as food and beverage

• FIFO results in higher cost of goods sold and lower ending inventory when prices are rising

• Example: A company buys 100 units of a product at $10 each on January 1 and 200 unit...read more

Profit and loss account is a financial statement that shows a company's revenues, expenses, and net income or loss for a specific period.

• It is also known as an income statement.

• It is used to determine a company's profitability.

• The revenue section includes sales, interest income, and other income.

• The expense section includes cost of goods sold, salaries, rent, and other expenses.

• The net income or loss is calculated by subtracting total expenses from total revenue.

• It is importa...read more

I would prefer a cheque as it is more convenient and widely accepted.

• Cheques are widely accepted and can be used for various transactions

• Demand drafts are usually used for larger transactions or when a guarantee of payment is required

• Cheques are easier to obtain and can be issued quickly

• Demand drafts may have additional fees and processing time

• Cheques can be cancelled or stopped if necessary

• Demand drafts cannot be cancelled or stopped once issued

A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time.

• It provides a snapshot of a company's financial position.

• Assets are listed on the left side and liabilities and equity on the right side.

• The balance sheet equation is Assets = Liabilities + Equity.

• It helps investors and creditors evaluate a company's financial health.

• Examples of assets include cash, inventory, and property.

• Examples of liabilities include...read more

LIFO method used in inventory management

• Last In First Out (LIFO) is a method used in inventory management to value and track inventory.

• Under LIFO, the most recently acquired or produced items are assumed to be sold or used first.

• This method assumes that the cost of the most recent inventory is the cost of goods sold.

• LIFO is commonly used when prices are rising, as it results in a lower taxable income due to higher cost of goods sold.

• Example: If a store purchases 10 units of a...read more

The COVID-19 pandemic affected most sectors, but technology and e-commerce saw significant improvements.

• The pandemic caused a global economic downturn, affecting most sectors.

• Industries such as travel, hospitality, and retail were hit the hardest.

• However, technology and e-commerce saw significant improvements as people shifted to online platforms for work, shopping, and entertainment.

• Companies like Amazon, Zoom, and Netflix saw a surge in demand and profits.

• The healthcare sec...read more

Accounting is the process of recording, classifying, and summarizing financial transactions to provide useful information to stakeholders.

• Accounting involves recording financial transactions such as sales, purchases, and payments.

• It classifies these transactions into categories such as assets, liabilities, and equity.

• It summarizes this information in financial statements such as balance sheets and income statements.

• Accounting provides useful information to stakeholders such a...read more

A triple column cash book is a financial record that contains three columns for cash transactions.

• It is used to record cash transactions in a business.

• The three columns are for cash received, cash paid, and balance.

• It helps in maintaining accurate records of cash transactions.

• It is commonly used by small businesses and individuals.

• Example: A business may use a triple column cash book to record daily sales, expenses, and cash balance.

A double column cash book is a bookkeeping record used to track both cash and bank transactions.

• It has two columns for recording transactions - one for cash and one for bank

• It helps in maintaining a record of all cash and bank transactions in a single book

• It facilitates easy reconciliation of bank statements with cash book

• Example: A company maintains a double column cash book to record all its cash and bank transactions

Banks are required to follow Ind AS. Lease accounting under Ind AS is based on the concept of 'right to use'.

• Banks are considered as 'public interest entities' and are required to follow Ind AS from April 1, 2018.

• Lease accounting under Ind AS is based on the concept of 'right to use' rather than 'ownership'.

• Under Ind AS 116, lessees are required to recognize all leases on their balance sheet as a right-of-use asset and a lease liability.

• Banks need to ensure that their financi...read more

The new amendments in e-invoicing in GST include changes in the invoice format, mandatory QR code, and dynamic QR code.

• Introduction of mandatory QR code on B2C invoices

• Introduction of dynamic QR code on B2B invoices

• Changes in the invoice format to accommodate QR codes

• Enhanced reporting requirements for e-invoicing

• Integration of e-invoicing with the GST portal

Process and control refer to the steps taken to ensure that a business operates efficiently and effectively.

• Process involves the steps taken to complete a task or achieve a goal.

• Control involves the measures taken to ensure that the process is carried out correctly and efficiently.

• Examples of process and control include creating standard operating procedures, implementing quality control measures, and conducting regular audits.

• Process and control are important in ensuring tha...read more

Revenue recognition is the process of accounting for and reporting revenue earned by a company.

• Revenue recognition is important for accurate financial reporting.

• It involves determining when revenue should be recognized and how much should be recognized.

• Revenue is recognized when it is earned and realized or realizable.

• There are different methods of revenue recognition, such as the percentage of completion method and the completed contract method.

• Examples of revenue recognitio...read more

Cost accounting is the process of recording, classifying, analyzing, and allocating costs associated with a product or service.

• It helps in determining the cost of production

• It helps in cost control and cost reduction

• It helps in decision making by providing cost data

• It involves the use of various techniques such as standard costing, marginal costing, etc.

• Example: A company uses cost accounting to determine the cost of producing a new product and decides whether it is profitabl...read more

Corporate account refers to the financial records of a company or organization.

• Corporate account includes all financial transactions, assets, liabilities, and equity of a company.

• It is used to track the financial health of the company and make informed decisions.

• Corporate account is managed by the finance department and is audited by external auditors.

• Examples of corporate accounts include balance sheets, income statements, and cash flow statements.

Planning concerns refer to the issues that need to be addressed while creating a plan.

• Planning concerns involve identifying the goals and objectives of the plan.

• It also involves determining the resources required to achieve those goals.

• Risk assessment and contingency planning are also important planning concerns.

• Examples of planning concerns include financial planning, project planning, and strategic planning.

Single column cash book is a cash book with only one column for recording cash transactions.

• It is a simple form of cash book used by small businesses.

• It records all cash receipts and payments in a single column.

• It does not differentiate between cash and bank transactions.

• It helps in maintaining a record of cash balance.

• Example: A stationary shop maintaining a single column cash book to record daily cash transactions.

Withdrawal cash refers to the act of taking out money from a bank account or ATM.

• Withdrawal cash is the opposite of depositing cash into an account.

• It can be done at a bank branch or through an ATM.

• The amount of cash that can be withdrawn may be limited by the bank or ATM.

• Withdrawal cash can also refer to taking money out of an investment account or retirement plan.

• It is important to keep track of all cash withdrawals to maintain accurate financial records.

The COVID-19 pandemic has severely impacted the Indian economy.

• The lockdowns and restrictions led to a significant decline in economic activity.

• Industries such as tourism, hospitality, and aviation were hit the hardest.

• The unemployment rate increased, and many small businesses shut down.

• The government implemented various measures such as stimulus packages and loan moratoriums to support the economy.

• The GDP contracted by 7.7% in the financial year 2020-21.

• The second wave of CO...read more

TDS on purchases refers to the tax deducted at source on payments made for purchases of goods or services.

• TDS on purchases is a mechanism to collect tax at the time of making payments for purchases.

• The person making the payment (deductor) deducts a certain percentage of the payment as TDS and remits it to the government.

• The deductor then issues a TDS certificate to the payee (deductee) as proof of tax deduction.

• The TDS rates vary depending on the nature of the payment and are...read more

Petty cash refers to a small amount of cash kept on hand for minor expenses.

• Petty cash is used for small expenses that are not worth writing a check for.

• It is usually managed by a designated employee who is responsible for keeping track of the cash and receipts.

• The amount of petty cash varies depending on the needs of the organization.

• Examples of petty cash expenses include office supplies, postage, and minor repairs.

• Petty cash is replenished periodically by submitting receip...read more

First in first out (FIFO) is a method of inventory valuation based on the assumption that the first goods purchased are the first goods sold.

• FIFO assumes that the oldest inventory items are sold first

• It is commonly used in industries where perishable goods are sold

• FIFO results in higher cost of goods sold and lower net income during periods of inflation

• Example: A grocery store selling fruits and vegetables would use FIFO to ensure that the oldest produce is sold first

A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time.

• It is a snapshot of a company's financial position

• Assets are listed on the left side and liabilities and equity on the right side

• The balance sheet equation is Assets = Liabilities + Equity

• It helps investors and creditors to assess the financial health of a company

• Examples of assets include cash, inventory, and property

• Examples of liabilities include loan...read more

LIFO is a method of inventory valuation where the last items purchased are assumed to be sold first.

• LIFO assumes that the last items purchased are sold first

• It is commonly used in industries where the products have a short shelf life

• LIFO can result in higher cost of goods sold and lower net income during inflationary periods

• Example: A grocery store using LIFO will assume that the last batch of milk purchased will be sold first

Cash account is a record of all transactions involving cash inflows and outflows.

• Cash account is a part of the general ledger that records all cash transactions.

• It includes all cash receipts and payments made by the company.

• It helps in tracking the cash balance of the company.

• Examples of cash transactions include cash sales, cash purchases, and cash payments for expenses.

• Cash account is important for preparing financial statements and tax returns.

Trial balance is a statement of all ledger account balances to ensure that the total debits equal the total credits.

• Trial balance is prepared at the end of an accounting period

• It lists all the ledger accounts and their balances

• The purpose is to ensure that the total debits equal the total credits

• If the trial balance does not balance, it indicates an error in the accounting records

• It is the first step in the preparation of financial statements

Financial reporting has undergone changes due to new accounting standards, technology advancements, and increased transparency requirements.

• Implementation of new accounting standards such as IFRS 9, 15, and 16

• Increased use of technology in financial reporting processes like automation and data analytics

• Enhanced disclosure requirements for increased transparency and accountability

• Focus on sustainability reporting and integrated reporting

• Impact of COVID-19 on financial reportin...read more

Account is a record of financial transactions. Debit is an entry on the left side and credit is an entry on the right side of an account.

• Account is a systematic record of financial transactions of a business or an individual.

• Debit is an entry on the left side of an account which increases assets and decreases liabilities and equity.

• Credit is an entry on the right side of an account which decreases assets and increases liabilities and equity.

• Debit and credit are used to record...read more

A ledger is a book or computer program used to record financial transactions.

• A ledger is used to keep track of all financial transactions in a business

• It contains separate accounts for assets, liabilities, income, and expenses

• Ledgers can be physical books or digital software programs

• They are essential for accurate financial reporting and analysis

• Examples of ledger software include QuickBooks and Xero

Yes, I enjoy disseminating information to help others make informed decisions.

• I believe in the importance of sharing knowledge and insights with others

• I have experience presenting financial reports and analysis to clients and colleagues

• I enjoy mentoring and training junior staff to help them develop their skills

• I am always looking for opportunities to educate myself and others on industry trends and best practices

A bank account is a financial account maintained by a bank for a customer.

• A bank account allows customers to deposit and withdraw money

• It can be a savings account, checking account, or other types of accounts

• Bank accounts may earn interest on the balance

• Examples of banks include Chase, Wells Fargo, and Bank of America

Final account is the summary of a company's financial transactions for a specific period.

• Final account includes the balance sheet, profit and loss statement, and cash flow statement.

• It shows the financial position of the company at the end of the accounting period.

• Final account is used to evaluate the company's performance and make financial decisions.

• Examples of final accounts include annual reports and financial statements.

Liability refers to the legal obligation to pay debts or fulfill other obligations. Character refers to the moral and ethical qualities of a person.

• Liability is a financial obligation that a person or company owes to another party.

• It can be in the form of loans, mortgages, or unpaid bills.

• Character refers to the personal qualities of an individual, such as honesty, integrity, and responsibility.

• It is important for a chartered accountant to have good character as they are entr...read more

Communication is the exchange of information or ideas between individuals or groups.

• Communication involves both sending and receiving messages

• It can be verbal or nonverbal

• Effective communication requires clarity, empathy, and active listening

• Examples include conversations, emails, presentations, and body language

A ledger is a book or computer program used to record financial transactions.

• A ledger is a record-keeping system for financial transactions.

• It contains all the accounts and transactions of a business.

• Ledgers can be physical books or computer programs.

• They are used to keep track of debits and credits, and to prepare financial statements.

• Examples of ledgers include general ledger, accounts payable ledger, and accounts receivable ledger.

CA work involves financial reporting, auditing, taxation, and advisory services. CS work involves legal compliance and corporate governance.

• CA work includes preparing financial statements, conducting audits, providing tax advice, and offering financial advisory services to clients.

• CS work involves ensuring compliance with legal and regulatory requirements, maintaining corporate records, and advising on corporate governance.

• CA work requires strong analytical and problem-solvin...read more

An interview is a formal conversation between an interviewer and an interviewee to assess the suitability of the latter for a job or position.

• An interview is a two-way communication process where the interviewer asks questions and the interviewee answers them.

• The purpose of an interview is to evaluate the skills, knowledge, and experience of the interviewee and to determine if they are a good fit for the job or position.

• Interviews can be conducted in person, over the phone, o...read more

SLR and CRR are two monetary policy tools used by the central bank to regulate the economy.

• SLR stands for Statutory Liquidity Ratio and CRR stands for Cash Reserve Ratio.

• SLR is the percentage of deposits that banks are required to maintain in the form of liquid assets such as cash, gold, or government securities.

• CRR is the percentage of deposits that banks are required to keep with the central bank in the form of reserves.

• SLR is used to control the flow of credit in the econo...read more

I am very interested in accountancy and have pursued it as my career choice.

• I have always been fascinated by numbers and financial management.

• I enjoy analyzing financial statements and identifying areas for improvement.

• I have completed relevant education and training to become a Chartered Accountant.

• I have gained practical experience through internships and work experience.

• I am constantly learning and keeping up to date with changes in accounting standards and regulations.