10+ R2R Analyst Interview Questions and Answers

Journal entries for depreciation and disposal of fixed assets involve recording depreciation expense and gain/loss on disposal.

• Depreciation expense is debited to Depreciation Expense account and credited to Accumulated Depreciation account.

• When a fixed asset is disposed of, the book value of the asset is removed from the books by debiting Accumulated Depreciation and crediting the Fixed Asset account.

• Any gain or loss on disposal is recorded by debiting/crediting the Fixed Ass...read more

Basic principles of journal entries include double-entry system, debit and credit, and recording transactions accurately.

• Journal entries follow the double-entry system, where every transaction affects at least two accounts.

• Debits and credits are used to record increases and decreases in accounts, respectively.

• The accounting equation (Assets = Liabilities + Equity) must always balance after journal entries.

• Transactions must be recorded accurately and in the correct accounting ...read more

The journal entry for Sales Return involves debiting Sales Returns and crediting Accounts Receivable or Cash.

• Debit the Sales Returns account to reduce sales revenue

• Credit Accounts Receivable if the customer is returning the goods on credit

• Credit Cash if the customer is returning the goods for a refund

• Example: Debit Sales Returns $500, Credit Accounts Receivable $500

Fixed Assets Reconciliation is the process of comparing the general ledger balance of fixed assets with the physical assets owned by the company.

• It involves verifying the existence, location, and condition of fixed assets

• It ensures that all fixed assets are accounted for and properly valued

• It helps in identifying any discrepancies between the general ledger and physical assets

• It is usually done on a periodic basis, such as monthly or annually

• Examples of fixed assets include b...read more

Reconciliation is the process of comparing two sets of records to ensure they are in agreement.

• Reconciliation involves comparing financial or transactional records to identify discrepancies.

• It is a crucial process in accounting and finance to ensure accuracy and prevent fraud.

• Examples include bank statement reconciliation, inventory reconciliation, and intercompany reconciliation.

• Reconciliation can be done manually or through automated software.

• The process typically involves ...read more

Month end activities are the tasks performed at the end of each month to close the books and prepare financial statements.

• Reconciling accounts

• Posting adjusting entries

• Preparing financial statements

• Reviewing financial data for accuracy

• Closing the books

Accrual based accounting provides a more accurate representation of a company's financial position by matching revenues with expenses.

• Accrual accounting recognizes revenue and expenses when they are incurred, regardless of when cash is exchanged.

• It provides a more accurate depiction of a company's financial health by matching revenues with expenses in the same accounting period.

• Accrual accounting helps in better tracking of financial performance and enables better decision-ma...read more

Bank reconciliation is the process of comparing a company's bank statement with its own financial records.

• It helps to identify any discrepancies between the two records.

• It ensures that all transactions are accurately recorded.

• It involves matching transactions on the bank statement with transactions in the company's accounting system.

• Any differences are investigated and resolved.

• Bank reconciliation is typically done on a monthly basis.

Amortization is the process of spreading out the cost of an intangible asset over its useful life.

• Amortization is commonly used in accounting to allocate the cost of intangible assets such as patents, copyrights, and trademarks over their useful life.

• It is similar to depreciation, which is used for tangible assets like buildings and equipment.

• The amortization expense is recorded on the income statement and reduces the value of the intangible asset on the balance sheet.

• Amortiz...read more

Deferred revenue is the income received in advance for goods or services that are yet to be delivered or rendered.

• Deferred revenue is also known as unearned revenue.

• It is a liability on the balance sheet until the goods or services are delivered or rendered.

• Examples include annual subscriptions, prepaid rent, and gift cards.

• Deferred revenue is recognized as revenue on the income statement when the goods or services are delivered or rendered.

• It is important for companies to pr...read more

Record to Report (R2R) is the process of collecting, processing, and reporting financial information within an organization.

• R2R involves activities such as journal entries, reconciliations, and financial reporting.

• It helps ensure accurate and timely financial reporting for decision-making.

• Examples of R2R tasks include closing the books at the end of a financial period and preparing financial statements.

• R2R also involves compliance with accounting standards and regulations.

Golden Rules of Accounting are basic principles that guide the process of recording financial transactions.

• 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.

• These rules help maintain the balance in accounting entries and ensure accuracy in financial reporting.

• For example, when a company receives cash from a customer, the cash account is debited (increa...read more