10+ Financial Planning Analyst Interview Questions and Answers

Budgeting involves planning and allocating resources for a specific period, while forecasting predicts future financial outcomes based on historical data and assumptions.

• Budgeting is a proactive process that involves setting financial goals and allocating resources to achieve those goals.

• Forecasting is a reactive process that uses historical data and assumptions to predict future financial outcomes.

• Budgeting is typically done on an annual basis, while forecasting can be done ...read more

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

• Unbilled revenue is recorded as a current asset on the balance sheet.

• Journal entry for recognizing unbilled revenue: Debit Unbilled Revenue and Credit Revenue.

• Journal entry for invoicing unbilled revenue: Debit Accounts Receivable and Credit Unbilled Revenue.

Netflix revenue model is based on subscription fees from customers for access to their streaming service.

• Netflix generates revenue primarily through subscription fees paid by customers for access to their streaming service.

• They offer different subscription plans with varying prices and features, such as Basic, Standard, and Premium.

• Netflix also generates revenue through partnerships and licensing deals with other companies for content distribution.

• Revenue is recognized when s...read more

It depends on the individual's financial goals, risk tolerance, and investment timeline.

• Mutual funds offer diversification and professional management, while individual equity purchases can provide higher returns but also higher risk.

• Mutual funds are better for beginners or those who prefer a hands-off approach to investing.

• Equity purchases may be more suitable for experienced investors who are willing to actively manage their investments.

• Consider factors such as fees, perfor...read more

Tesco's annual report highlighted a strong increase in online sales and a focus on sustainability initiatives.

• Tesco reported a 77% increase in online sales during the pandemic.

• The company outlined its commitment to reducing food waste and plastic packaging.

• Tesco's annual report also mentioned investments in renewable energy and community initiatives.

An option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a specific time period.

• Options provide flexibility and leverage for investors.

• Investors purchase options to hedge against risk or speculate on price movements.

• There are two types of options: call options (the right to buy) and put options (the right to sell).

• Options can be used in various strategies such as covered calls, protective ...read more

Financial planning is the process of setting goals, evaluating resources, and creating a plan to achieve financial success.

• Involves setting financial goals and objectives

• Assessing current financial situation and resources

• Creating a plan to achieve financial goals, including budgeting, saving, investing, and managing debt

• Regularly reviewing and adjusting the plan as needed

My coping mechanism involves taking breaks, practicing mindfulness, and seeking support from colleagues and mentors.

• Taking short breaks throughout the day to recharge

• Practicing mindfulness techniques such as deep breathing or meditation

• Seeking support from colleagues and mentors to discuss challenges and brainstorm solutions

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

• The first golden rule is the rule of debit and credit.

• The second golden rule is the rule of assets and liabilities.

• The third golden rule is the rule of income and expenses.

• These rules ensure accuracy and consistency in financial reporting.

• For example, if a company purchases inventory on credit, the rule of debit and credit requires that the inventory account is debited and the a...read more

IFRS 15 is a financial reporting standard that outlines the principles for recognizing revenue from contracts with customers.

• IFRS 15 provides a single, comprehensive revenue recognition model for all contracts with customers.

• It specifies the criteria for recognizing revenue and how to measure the amount of revenue to be recognized.

• The standard requires entities to identify performance obligations in a contract and allocate the transaction price to these obligations.

• IFRS 15 im...read more

Mutual funds are professionally managed investment funds that pool money from multiple investors to purchase securities, while ULIPs are insurance products that offer both insurance and investment benefits.

• Mutual funds are managed by professional fund managers who invest in a diversified portfolio of securities based on the fund's investment objective.

• ULIPs combine insurance and investment components, offering policyholders both life insurance coverage and the opportunity to ...read more

Net worth is the total assets minus total liabilities of an individual or company, while cash flow is the movement of money in and out of a business.

• Net worth is a static measure of wealth, while cash flow is a dynamic measure of financial health.

• Net worth includes all assets and liabilities, such as investments, real estate, and debts, while cash flow focuses on the actual movement of money.

• Net worth is a snapshot at a specific point in time, while cash flow shows the inflow...read more