90+ Financial Associate Interview Questions and Answers

Journal entry for cash sales involves debiting the cash account and crediting the sales revenue account.

• Debit the cash account to reflect the increase in cash due to the sales

• Credit the sales revenue account to record the revenue generated from the sales

• The journal entry would typically be: Cash (debit) and Sales Revenue (credit)

The journal entry for provision of bad debts is a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.

• Bad Debt Expense is an expense account that represents the amount of uncollectible accounts receivable.

• Allowance for Doubtful Accounts is a contra-asset account that reduces the balance of accounts receivable to its net realizable value.

• The provision for bad debts is an estimate of the amount of accounts receivable that are expected to be uncollectible.

• E...read more

Prudence concept is the principle of exercising caution and good judgment in decision-making.

• It involves taking a conservative approach to financial management

• It requires considering potential risks and uncertainties before making decisions

• It is important for ensuring the long-term financial stability of an organization

• For example, a company may choose to hold onto excess cash reserves rather than investing them in risky ventures

Journal entry for bad debts

• Debit the bad debt expense account

• Credit the accounts receivable account for the amount of the bad debt

• If the bad debt has already been written off, credit the allowance for doubtful accounts account instead of accounts receivable

• Example: Debit Bad Debt Expense for $500, Credit Accounts Receivable for $500

The first thing to consider while starting statutory audit is understanding the client's business and industry.

• Understand the client's business and industry

• Identify the key risks and controls

• Assess the materiality of the financial statements

• Plan the audit approach and procedures

• Consider any regulatory requirements or changes

• Review prior year's audit work

• Communicate with the client and their management team

I rate myself highly on data analysis and business intelligence skills.

• I have a strong background in data analysis and have successfully completed several projects that required in-depth analysis.

• I am proficient in using various data analysis tools and software, such as Excel, SQL, and Tableau.

• I have a solid understanding of statistical analysis and can effectively interpret and present data-driven insights.

• I have experience in developing and implementing business intelligenc...read more

Journal entries for intercompany transactions are used to record financial transactions between two entities within the same company.

• Intercompany transactions involve the transfer of goods or services between two entities within the same company.

• The journal entry for intercompany transactions involves recording the transaction in the books of both entities.

• The debit and credit accounts used in the journal entry will depend on the nature of the transaction.

• For example, if Enti...read more

Yes, I am proficient in using MS Excel for financial analysis and data management.

• I have extensive experience in creating and managing spreadsheets for financial modeling and forecasting.

• I am skilled in using Excel functions and formulas to perform complex calculations and analysis.

• I can create charts, graphs, and pivot tables to visualize financial data effectively.

• I am familiar with data manipulation techniques such as sorting, filtering, and conditional formatting.

• I have u...read more

Strategy is a plan of action designed to achieve a long-term or overall aim.

• Strategy helps in setting clear goals and objectives for the company.

• It helps in identifying the strengths and weaknesses of the company and its competitors.

• It helps in making informed decisions and allocating resources effectively.

• It helps in adapting to changes in the market and staying ahead of the competition.

• Examples of successful strategies include Apple's focus on innovation and customer experi...read more

Financial budgeting, planning and analysis face challenges due to changing market conditions, data accuracy, and lack of communication.

• Market volatility can affect budgeting and planning

• Data accuracy is crucial for effective analysis

• Lack of communication between departments can lead to discrepancies

• Forecasting future trends can be difficult

• Unexpected expenses can disrupt budgeting plans

• Inflation and currency fluctuations can impact financial planning

• Difficulty in balancing sh...read more

Book closure process is the process of closing the register of shareholders to determine the list of shareholders eligible for dividends.

• Book closure process is done by companies to determine the list of shareholders eligible for dividends.

• During this process, the register of shareholders is closed for a specific period of time.

• Only those shareholders who are on the list at the end of the book closure period are eligible for dividends.

• Book closure dates are announced in advan...read more

Trial balance is a list of all the accounts in the general ledger with their debit or credit balances. Cash flow statement shows the inflow and outflow of cash. EBITDA is a measure of a company's operating performance.

• Trial balance is used to ensure that the total of all debits equals the total of all credits.

• Cash flow statement shows the sources and uses of cash during a specific period of time.

• EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization...read more

P2P cycle refers to the procure-to-pay process in which goods or services are ordered, received, and paid for. A P.O. (purchase order) is a document issued by a buyer to a seller outlining the details of a purchase transaction.

• P2P cycle involves requisitioning, purchasing, receiving, and paying for goods or services

• Purchase Order (P.O.) is a document issued by a buyer to a seller specifying the details of the purchase, such as quantity, price, and terms

• P.O. helps in tracking ...read more

Basic of accounting is to record financial transactions and prepare financial statements.

• Accounting is the process of recording, classifying, and summarizing financial transactions.

• The basic accounting equation is Assets = Liabilities + Equity.

• Journal entries of GST and TDS are recorded to account for taxes paid and collected.

• For example, a journal entry for GST paid would be Debit GST Paid and Credit Bank Account.

• Similarly, a journal entry for TDS collected would be Debit TD...read more

Revenue recognition for cars sold with insurance and maintenance services.

• Revenue should be recognized separately for the car sale, insurance, and maintenance services.

• If the insurance and maintenance services are bundled with the car sale, revenue should be allocated based on their relative standalone selling prices.

• If the insurance and maintenance services are sold separately, revenue should be recognized when the services are provided.

• The revenue recognition method should ...read more

Journal entries are records of financial transactions that are recorded in a company's general ledger.

• Debit and credit accounts are identified and recorded

• Each entry must have a corresponding debit and credit entry

• Entries must be recorded in chronological order

• Examples include recording sales revenue, expenses, and depreciation

• Journal entries are used to create financial statements

Investment decisions depend on metrics like ROI, risk assessment, market trends, and financial ratios.

• Return on Investment (ROI)

• Risk assessment

• Market trends

• Financial ratios

Financial activities involve managing money and investments, while commercial activities involve buying and selling goods and services.

• Financial activities include budgeting, investing, accounting, and financial reporting

• Commercial activities include marketing, sales, procurement, and supply chain management

• Examples of financial activities include managing a company's cash flow, investing in stocks or bonds, and creating financial statements

• Examples of commercial activities i...read more

GL coding is a system of assigning codes to financial transactions. P2P cycle refers to the process of procuring goods and services. Journal entries are records of financial transactions.

• GL coding involves assigning codes to transactions for easy tracking and analysis

• P2P cycle includes steps like requisition, purchase order, receipt of goods, and payment

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

• GL coding and journal entries are important f...read more

Transportation of goods can face problems such as delays, damages, theft, and regulatory issues.

• Delays due to traffic, weather, or mechanical issues

• Damages caused by improper handling or packaging

• Theft by employees or external parties

• Regulatory issues such as customs clearance or documentation

• Capacity constraints or lack of available transportation options

A derivative is a financial contract whose value is based on the performance of an underlying asset.

• Derivatives are used for hedging or speculation.

• Types of derivatives include futures, options, swaps, and forwards.

• Futures contracts involve buying or selling an asset at a predetermined price and date.

• Options contracts give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price and date.

• Swaps involve exchanging cash flows based on differ...read more

Working capital is the difference between current assets and current liabilities on a balance sheet. Depreciation is the allocation of the cost of an asset over its useful life.

• Working capital is calculated as current assets minus current liabilities.

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

• Depreciation is the reduction in value of an asset over time, typically recorded as an expense on the incom...read more

The accounting entry for fixed deposits involves recording the initial deposit and any subsequent interest earned.

• Fixed deposits are recorded as an asset on the balance sheet.

• The initial deposit is debited to the fixed deposit account.

• Any interest earned is credited to the fixed deposit account.

• At maturity, the fixed deposit is either renewed or the funds are transferred back to the bank account.

• If the fixed deposit is renewed, the interest earned is added to the principal am...read more

Market volatility can be understood by analyzing historical data, economic indicators, and market sentiment.

• Monitor historical price movements and trading volumes

• Track economic indicators such as GDP growth, inflation rates, and interest rates

• Pay attention to market sentiment and news events that can impact investor confidence

• Use technical analysis tools like Bollinger Bands or Moving Averages to identify potential volatility

• Consider external factors like geopolitical events ...read more

I rate myself 8 on analytical skills, 7 on communication, 9 on attention to detail, and 6 on teamwork.

• Analytical skills - 8: I am proficient in analyzing financial data and making strategic recommendations.

• Communication - 7: I can effectively communicate complex financial information to clients and team members.

• Attention to detail - 9: I am meticulous in reviewing financial documents and ensuring accuracy.

• Teamwork - 6: While I work well in a team, I prefer independent tasks t...read more

A share represents ownership in a company and is bought and sold on the stock market.

• A share is a unit of ownership in a company, representing a claim on part of the company's assets and earnings.

• Shares are bought and sold on the stock market, where investors can trade them with each other.

• Share prices fluctuate based on the company's performance, market conditions, and investor sentiment.

• Investors buy shares in the hope that the company will grow and increase in value, allow...read more

Purchase process in costing involves identifying the need, selecting suppliers, negotiating prices, placing orders, receiving goods, and making payments.

• Identify the need for the purchase

• Select potential suppliers and obtain quotes

• Negotiate prices and terms with the chosen supplier

• Place the order with the supplier

• Receive the goods and verify their quality and quantity

• Make payment to the supplier

Deferred revenue entry is posted by debiting the deferred revenue account and crediting the revenue account.

• Identify the amount of revenue that has been deferred

• Debit the deferred revenue account for the identified amount

• Credit the revenue account for the same amount

• Ensure that the deferred revenue account balance is reduced as revenue is recognized

• Update the financial statements accordingly

I analyze a company's balance sheet by examining its assets, liabilities, and equity to assess financial health and performance.

• Start by reviewing the total assets and liabilities to understand the financial position of the company.

• Calculate key financial ratios such as current ratio, debt-to-equity ratio, and return on equity to evaluate liquidity, leverage, and profitability.

• Look for any significant changes in the balance sheet over time to identify trends or potential red ...read more

The new FCRA act implementation refers to the changes and updates made to the Fair Credit Reporting Act.

• The new FCRA act includes provisions for free credit reports for consumers every 12 months.

• It also requires creditors to provide adverse action notices to consumers based on information in their credit reports.

• The act imposes stricter regulations on credit reporting agencies to ensure accuracy and privacy of consumer information.

• Consumers have the right to dispute inaccurat...read more

If I forget to deduct TDS, I will rectify the mistake immediately by deducting the TDS from the next payment and inform the relevant authorities.

• Immediately deduct the TDS from the next payment

• Inform the relevant authorities about the mistake

• Ensure proper documentation of the error and correction

• Take steps to prevent such errors in the future

Capital market is a platform where long-term securities are traded between investors and issuers.

• It is a market for buying and selling of long-term securities such as stocks, bonds, and debentures.

• It provides a platform for companies and governments to raise funds for their long-term investments.

• It is regulated by the Securities and Exchange Board of India (SEBI) in India.

• Examples of capital markets include the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)...read more

The politics of freebies is a controversial topic with varying opinions.

• Freebies can be used as a marketing strategy to attract customers

• Some argue that freebies create a culture of entitlement and dependency

• Politicians often use freebies as a way to gain votes

• Freebies can have a negative impact on the economy and government finances

• Examples of freebies include free healthcare, education, and basic income

Reconciliation involves comparing two sets of records to ensure they are in agreement, while substantiation involves providing evidence or support for a claim or statement.

• Reconciliation is typically done between financial records, such as bank statements and accounting records, to identify and resolve discrepancies.

• Substantiation involves providing documentation or evidence to support a claim or transaction.

• Reconciliation focuses on ensuring accuracy and consistency between ...read more

Balance sheet does not reflect the current market value of assets and liabilities.

• Balance sheet only shows historical cost of assets and liabilities.

• Intangible assets like patents, trademarks, and goodwill are not always accurately reflected.

• Balance sheet does not account for off-balance sheet items like leases and contingent liabilities.

• Inflation can distort the value of assets and liabilities over time.

• Balance sheet does not provide information on the quality of assets or t...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 helps in summarizing financial information for decision-making

• Examples include bookkeeping, financial reporting, and auditing

• The golden rule of accounting is 'Debit the receiver, credit the giver'

• This means that for every transaction, there must be an equal debit and credit entry

A journal is a record of financial transactions. Journal entries are the individual records of each transaction.

• A journal is a chronological record of all financial transactions of a business.

• Journal entries are the individual records of each transaction, including the accounts involved, the amounts, and the date.

• Journal entries are used to create the general ledger, which is the main accounting record of a business.

• Examples of journal entries include recording a sale, record...read more

GST R 1 DATE is the due date for filing monthly GST returns. 2A and 2B are different sections of the GST return form. Current responsibility varies based on job role.

• GST R 1 DATE is the due date for filing monthly GST returns

• 2A and 2B are sections in the GST return form where details of inward supplies are to be provided

• Difference between 2A & 2B lies in the nature of supplies covered and the timing of availment of input tax credit

• Current responsibility may include preparing ...read more

I am skilled in building and maintaining relationships with stakeholders through effective communication and collaboration.

• I have experience in regularly communicating with stakeholders to provide updates on financial performance and address any concerns.

• I prioritize understanding the needs and expectations of stakeholders to ensure their satisfaction and alignment with organizational goals.

• I have successfully managed stakeholder relationships by being responsive, proactive, ...read more

AP refers to Accounts Payable while AR refers to Accounts Receivable.

• AP is the money a company owes to its vendors or suppliers while AR is the money that a company is owed by its customers.

• AP is a liability while AR is an asset.

• AP is recorded as a credit while AR is recorded as a debit.

• Examples of AP include bills for goods or services received but not yet paid for, while examples of AR include invoices for goods or services provided but not yet paid for by customers.

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

• The golden rules include: Debit what comes in, Credit what goes out; Debit the receiver, Credit the giver; Debit expenses and losses, Credit income and gains.

• These rules ensure that accounting entries are recorded accurately and consistently.

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

Selling a product involves understanding customer needs, highlighting product benefits, and closing the deal.

• Understand the customer's needs and preferences

• Highlight the unique features and benefits of the product

• Address any objections or concerns the customer may have

• Close the deal by asking for the sale or offering incentives

• Follow up with the customer to ensure satisfaction and encourage repeat business

Accounts payable is the amount of money a company owes to its suppliers for goods or services purchased on credit.

• Accounts payable is a liability on the company's balance sheet.

• It represents the amount of money the company owes to its vendors or suppliers.

• Accounts payable is typically recorded when an invoice is received from the supplier.

• Examples include payments for inventory, utilities, rent, and other expenses.

• Managing accounts payable effectively is important for maintai...read more

The new TDS rules refer to changes in tax deducted at source regulations.

• The new TDS rules include higher TDS rates on non-filers of income tax returns.

• There are changes in TDS rates for interest income, rental income, and other payments.

• The new rules also introduce TDS on e-commerce transactions above a certain threshold.

• The TDS rules aim to increase tax compliance and prevent tax evasion.

To prepare financial models from scratch, follow these steps:

• Gather relevant financial data and information

• Identify the purpose and scope of the financial model

• Determine the key assumptions and variables

• Choose the appropriate modeling technique (e.g., discounted cash flow, sensitivity analysis)

• Build the model structure using spreadsheets or specialized software

• Input the data and formulas, ensuring accuracy and consistency

• Test and validate the model by comparing results with h...read more

GreyCampus is an online learning platform that offers professional certification courses and training programs.

• Offers courses in various fields such as project management, data science, cybersecurity, and digital marketing

• Provides live online classes and self-paced learning options

• Has partnerships with industry leaders like Microsoft, IBM, and Amazon Web Services

• Offers job placement assistance and career services to students

• Has a high success rate of students passing certific...read more

Finance is the study of how individuals, businesses, and organizations manage money and investments.

• Finance involves analyzing financial statements, managing budgets, and making investment decisions.

• It includes areas such as banking, investments, insurance, and financial planning.

• Finance helps individuals and businesses make informed financial decisions to achieve their goals.

• Examples of finance careers include financial analysts, investment bankers, and financial advisors.