20+ Finance Trainee Interview Questions and Answers

TDS stands for Tax Deducted at Source and is a system of collecting income tax in India.

• TDS is a system of collecting income tax in India

• It is deducted at the source of income

• The person making the payment is responsible for deducting TDS

• TDS rates vary depending on the type of payment and the income of the recipient

• TDS is applicable to salaries, interest, rent, commission, and other payments

• TDS certificates are issued to the deductee as proof of tax payment

My favorite subject is finance, focusing on DCF, terminal value, and selecting the appropriate discount rate.

• DCF (Discounted Cash Flow) is a valuation method used to estimate the value of an investment based on its expected future cash flows.

• Terminal value represents the value of an investment at the end of a forecast period, capturing the bulk of its total value.

• To choose the discount rate, I consider the weighted average cost of capital (WACC), which reflects the risk and r...read more

Internal control can be implemented in a company through various measures such as segregation of duties, regular audits, and implementing policies and procedures.

• Segregation of duties to prevent fraud and errors

• Regular audits to ensure compliance with policies and procedures

• Implementing policies and procedures to guide employees on proper conduct and processes

• Establishing a system of checks and balances to monitor and review financial transactions

• Training employees on interna...read more

Cash flow from operating activities is calculated by adjusting net income for non-cash items and changes in working capital.

• Start with net income from the income statement

• Add back non-cash expenses like depreciation and amortization

• Adjust for changes in working capital items like accounts receivable, accounts payable, and inventory

• Subtract any non-operating gains or losses

• Example: Cash flow from operating activities = Net income + Depreciation - Change in accounts receivable ...read more

Golden rules of accounting and depreciation/amortization

• Golden rules of accounting are the basic principles that guide the accounting process

• 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

• Depreciation is the decrease in value of an asset over time due to wear and tear or obsolescence

• Amortization is the process of spreading the cost of an intangible a...read more

Golden rules of accounting include prepaid expenses, accruals, and deferrals.

• Prepaid expenses are expenses paid in advance but not yet incurred, recorded as assets until they are used up.

• Accruals are revenues or expenses that have been earned or incurred but not yet recorded.

• Deferrals are revenues or expenses that have been recorded but not yet earned or incurred.

• Prepaid expenses are an example of an asset account, while accruals and deferrals are examples of adjusting entrie...read more

Unbilled revenue is revenue that has been earned but not yet invoiced to the customer.

• Unbilled revenue is also known as accrued revenue or deferred revenue.

• It is common in industries where services are provided over a period of time, such as consulting or software development.

• Unbilled revenue is recorded as a liability on the balance sheet until an invoice is issued.

• Once an invoice is issued, the unbilled revenue is recognized as revenue on the income statement.

• For example, a...read more

M&A refers to mergers and acquisitions, crucial for corporate growth and restructuring in finance.

• Mergers involve two companies combining to form a new entity, e.g., Disney and Pixar.

• Acquisitions occur when one company purchases another, like Facebook acquiring Instagram.

• M&A can enhance market share, diversify products, and achieve synergies.

• The process includes due diligence, valuation, negotiation, and integration.

• Regulatory approval is often required to prevent monopolisti...read more

The current GDP of India is approximately $2.87 trillion USD.

• The GDP of India is one of the largest in the world, ranking around 5th or 6th globally.

• It is a key indicator of the economic health and growth of the country.

• The GDP is calculated by adding up the total value of all goods and services produced within the country in a specific time period.

• As of 2021, the GDP of India is estimated to be around $2.87 trillion USD.

GST forms are documents used for filing GST returns and claiming input tax credit.

• There are various GST forms for different purposes such as registration, returns, refunds, etc.

• Some of the commonly used GST forms are GSTR-1, GSTR-3B, GSTR-9, etc.

• GSTR-1 is used for filing outward supplies details, GSTR-3B is used for monthly summary returns, and GSTR-9 is used for annual returns.

• GST forms can be filed online through the GST portal.

• Proper filling of GST forms is important for c...read more

Budget is a financial plan that outlines expected income and expenses. Types include static, flexible, and rolling budgets.

• Budget is a financial plan that helps organizations allocate resources and achieve their goals.

• Static budget is a fixed budget that remains unchanged regardless of actual sales or production.

• Flexible budget adjusts to changes in sales or production levels.

• Rolling budget is a continuous budget that is updated regularly throughout the year.

• Other types of bu...read more

My strength lies in my analytical skills, enabling me to interpret complex financial data and make informed decisions.

• Strong analytical skills: I excel at breaking down complex financial reports to identify trends and insights.

• Attention to detail: In my previous internship, I meticulously reviewed financial statements, catching errors that saved the company money.

• Adaptability: I quickly learn new financial software, which helped my team streamline our reporting process.

• Team c...read more

My aim is to become a successful finance professional by continuously learning and growing in the field.

• To gain practical experience in financial analysis and reporting

• To develop strong analytical and problem-solving skills

• To eventually become a certified financial analyst (CFA)

Journal entries are used to record financial transactions in accounting. They involve debiting and crediting accounts.

• Journal entries are used to record transactions in the general ledger.

• Each journal entry consists of a debit entry and a credit entry.

• Debits must equal credits in each journal entry to maintain the accounting equation.

• Journal entries are posted to the general ledger accounts to keep track of the financial transactions.

• Example: A company receives $1,000 cash fr...read more

Proficient in using Excel for financial analysis and Word for report writing.

• Excel: Creating financial models, analyzing data using formulas and functions, creating charts and graphs.

• Word: Writing reports, creating presentations, formatting documents.

• Example: Used Excel to analyze financial statements and create budget forecasts. Used Word to write reports on financial performance.

Growth rate is the percentage increase in a company's revenue, earnings, or other financial metrics over a specific period of time.

• Growth rate is used to measure the rate at which a company is expanding or growing.

• It is calculated by dividing the difference between the final value and the initial value by the initial value, and then multiplying by 100 to get a percentage.

• For example, if a company's revenue increased from $100,000 to $120,000 in a year, the growth rate would b...read more

Trading involves buying and selling financial instruments such as stocks, bonds, commodities, or currencies with the goal of making a profit.

• Trading involves the buying and selling of financial instruments like stocks, bonds, commodities, or currencies.

• Traders aim to make a profit by taking advantage of price movements in the market.

• Different trading strategies include day trading, swing trading, and position trading.

• Trading can be done through various platforms such as stock...read more