300+ Finance Executive Interview Questions and Answers

Accounts receivable involves managing outstanding invoices and payments from customers, while accounts payable involves managing payments to suppliers and vendors.

• Accounts receivable involves invoicing customers for goods or services provided

• Accounts receivable also includes tracking and following up on outstanding payments from customers

• Accounts payable involves managing payments to suppliers and vendors for goods or services received

• Accounts payable also includes ensuring t...read more

I expect to bring my expertise in financial analysis and strategy to drive growth and profitability for the company.

• I have a track record of identifying cost-saving opportunities and implementing effective financial controls.

• I am skilled in financial modeling and forecasting, which can help the company make informed decisions about investments and expansion.

• I am also experienced in developing and executing strategic plans that align with the company's goals and objectives.

• By ...read more

Revenue recognition as per IndAS 115

• Identify the contract with the customer

• Identify the performance obligations in the contract

• Determine the transaction price

• Allocate the transaction price to the performance obligations

• Recognize revenue when (or as) the entity satisfies a performance obligation

Reconciliation between GSTR 2B and books of accounts

• Compare the data in GSTR 2B with the data in the books of accounts

• Identify and rectify any discrepancies

• Ensure that all invoices and transactions are accounted for in both GSTR 2B and books of accounts

• Reconcile on a regular basis to avoid any errors or penalties

• Use software tools to simplify the process

A debit balance in creditor accounts indicates overpayments, affecting liabilities and cash flow on the balance sheet.

• A debit balance in creditor accounts suggests that the company has overpaid its suppliers.

• This overpayment will appear as a current asset on the balance sheet, reducing total liabilities.

• For example, if a company owes $10,000 but has a $2,000 debit balance, its net liability is effectively $8,000.

• This situation can impact cash flow, as excess cash is tied up i...read more

Dishonored cheques impact cash book balances, leading to discrepancies and potential liquidity issues.

• 1. Cash Book Overstatement: A favorable bank balance in the cash book may mislead management about available funds.

• 2. Reversal of Deposits: When a cheque is returned, the previously recorded deposit must be reversed, reducing the cash book balance.

• 3. Impact on Liquidity: This can create liquidity issues, as the business may have relied on those funds for operations or payment...read more

Motherson is a global automotive supplier with a focus on electrical distribution systems, automotive rearview mirrors, and polymer processing.

• Founded in 1975 in India

• Operates in 41 countries

• Employs over 135,000 people

• Supplies to major automotive companies such as BMW, Ford, and Volkswagen

• Acquired PKC Group, a Finnish wiring harness manufacturer, in 2017

The financial account is a component of a country's balance of payments that records transactions involving financial assets and liabilities.

• It tracks the flow of funds between a country and the rest of the world.

• It includes transactions such as foreign direct investment, portfolio investment, and loans.

• The financial account is divided into subcategories like direct investment, portfolio investment, and other investment.

• Direct investment involves the acquisition of a controll...read more

I have a passion for numbers and problem-solving, and I believe accounting is the foundation of finance.

• I enjoy working with numbers and analyzing financial data.

• I have strong attention to detail and organizational skills, which are essential in accounting.

• I believe accounting is the language of business and provides a solid foundation for a career in finance.

• I am interested in helping businesses make informed financial decisions and improve their overall performance.

Analyzing financial statements involves evaluating a company's financial health through various metrics and ratios.

• 1. Gather financial statements: Collect the balance sheet, income statement, and cash flow statement.

• 2. Perform ratio analysis: Calculate key ratios like liquidity (current ratio), profitability (net profit margin), and solvency (debt-to-equity).

• 3. Trend analysis: Compare financial data over multiple periods to identify trends, such as revenue growth or expense m...read more

KYC stands for Know Your Customer.

• KYC is a process used by financial institutions to verify the identity of their customers.

• It involves collecting and verifying customer information to prevent fraud, money laundering, and other illegal activities.

• KYC requirements may include providing identification documents, proof of address, and other relevant information.

• Financial institutions are legally obligated to perform KYC procedures to ensure compliance with regulations.

• KYC helps ...read more

TDS slabs are tax rates at which tax is deducted at source based on income levels.

• TDS slabs vary based on the type of income and the individual's age

• For example, TDS on salary income ranges from 0% to 30% depending on income levels

• TDS on interest income is usually deducted at 10% for individuals

My goal for future planning is to continuously learn and grow in my career while maintaining a healthy work-life balance.

• Continuously improve my skills and knowledge through training and development opportunities

• Set achievable career goals and work towards them

• Prioritize self-care and maintain a healthy work-life balance

• Stay up-to-date with industry trends and advancements

• Build strong professional relationships and network

• Contribute to the success of my organization

Sales and purchase invoices are documents used in financial transactions, while bank statements show transactions with a bank. AR stands for accounts receivable and AP stands for accounts payable.

• Sales and purchase invoices are documents used to record sales and purchases in a business.

• Bank statements show all transactions made with a bank account, including deposits, withdrawals, and fees.

• AR (accounts receivable) represents money owed to a company by its customers for goods ...read more

Two way matching compares invoice and purchase order, while three way matching adds receipt of goods to the comparison.

• Two way matching ensures that the invoice matches the purchase order in terms of quantity, price, and terms.

• Three way matching adds the receipt of goods to the comparison to ensure that the goods have been received and match the invoice and purchase order.

• Two way matching is commonly used for low-value purchases, while three way matching is used for high-valu...read more

LMI stands for Lenders Mortgage Insurance, required when a borrower has a deposit of less than 20% of the property value.

• LMI is a type of insurance that protects the lender in case the borrower defaults on their mortgage.

• It is typically required when the borrower has a deposit of less than 20% of the property value.

• The cost of LMI is usually added to the borrower's loan amount.

• LMI does not provide any protection or benefit to the borrower.

A Fixed Asset Register (FAR) is a comprehensive record of a company's fixed assets, detailing their acquisition, valuation, and depreciation.

• Tracks all fixed assets like machinery, buildings, and vehicles.

• Includes details such as purchase date, cost, and location.

• Helps in calculating depreciation for financial reporting.

• Facilitates asset management and compliance with regulations.

• Example: A company may have a FAR listing its office buildings and their respective values.

The Order to Cash Cycle is the process from receiving an order to collecting payment, crucial for cash flow management.

• 1. Order Placement: Customer places an order, e.g., a retailer orders products from a supplier.

• 2. Order Processing: The order is confirmed and processed in the system, ensuring inventory availability.

• 3. Order Fulfillment: Products are picked, packed, and shipped to the customer.

• 4. Invoicing: An invoice is generated and sent to the customer for payment.

• 5. Paym...read more

Types of interest rates include fixed, variable, prime, and LIBOR.

• Fixed interest rates remain the same throughout the loan term.

• Variable interest rates fluctuate based on market conditions.

• Prime interest rates are the rates offered by banks to their most creditworthy customers.

• LIBOR (London Interbank Offered Rate) is the average interest rate at which major global banks borrow from one another.

I can contribute to financial strategy, optimize budgets, and enhance reporting processes to drive growth and efficiency.

• Develop financial strategies to align with company goals, such as increasing revenue by 15% over the next fiscal year.

• Optimize budgeting processes to reduce costs by identifying inefficiencies, potentially saving the company 10% annually.

• Enhance financial reporting accuracy and timeliness, ensuring stakeholders receive critical data for decision-making.

• Impl...read more

Different types of interest rates include fixed, variable, prime, and LIBOR rates.

• Fixed interest rates remain the same throughout the loan term

• Variable interest rates fluctuate based on market conditions

• Prime rates are the interest rates that banks charge their most creditworthy customers

• LIBOR rates are the average interest rates at which major global banks borrow from one another

Prepaid income is income received in advance, while prepaid expenses are expenses paid in advance.

• Prepaid income is income received before it is earned, such as subscription fees paid in advance.

• Prepaid expenses are expenses paid for in advance, like insurance premiums or rent.

• Both prepaid income and prepaid expenses are recorded as assets on the balance sheet until they are earned or used.

To audit purchase or expenses voucher, follow these steps:

• Verify the authenticity of the voucher

• Check if the voucher is properly authorized and approved

• Ensure that the voucher is supported by relevant documents

• Verify the accuracy of the voucher amount

• Check if the voucher is recorded in the correct account

• Perform a test check of a sample of vouchers

• Document the audit findings and report to management

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

• The income statement shows a company's revenue and expenses over a period of time.

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

• The cash flow statement shows a company's inflows and outflows of cash over a period of time.

• The income statement and cash flow statement are linked through net income, which is used to calculate cash flow ...read more

Child labor persists due to poverty, lack of education, and weak enforcement of laws.

• Poverty forces families to rely on children for income

• Lack of education limits opportunities for children and perpetuates the cycle of poverty

• Weak enforcement of laws allows employers to exploit children for cheap labor

• Cultural attitudes towards child labor also play a role in its persistence

• International demand for cheap goods fuels the demand for child labor in some industries

• Efforts to com...read more

Preparation of balance sheet involves listing assets, liabilities, and equity. Ratios are computed using financial data from the balance sheet.

• List all assets, liabilities, and equity on the balance sheet

• Calculate various financial ratios such as current ratio, debt to equity ratio, and return on equity

• Use formulae like Current Ratio = Current Assets / Current Liabilities

• Interpret the ratios to analyze the financial health and performance of the company

Taxation refers to the process of levying taxes on individuals and businesses by the government.

• Taxation is used by governments to generate revenue for public services and infrastructure.

• Different types of taxes include income tax, sales tax, property tax, and corporate tax.

• Tax laws and regulations vary by country and can be complex and constantly changing.

• Tax planning and compliance are important for individuals and businesses to avoid penalties and maximize tax benefits.

• Tax...read more