10+ R2R Associate Interview Questions and Answers

Journal entry for fixed asset sold with adjustment of gain or loss on sale

• Debit the accumulated depreciation account to remove the asset's accumulated depreciation

• Debit the cash or accounts receivable account for the amount received from the sale

• Credit the fixed asset account for the original cost of the asset

• Credit the gain or loss on sale of fixed asset account for the difference between the sale price and the book value of the asset

Golden principles of accounting refer to the basic rules and guidelines that govern the field of accounting.

• The principle of consistency: Accounting methods and procedures should be consistent from one period to another.

• The principle of materiality: Only significant information that would influence the decision-making of users should be included in financial statements.

• The principle of conservatism: When in doubt, accountants should choose the option that is least likely to o...read more

Journal entry for accrual basis of transaction

• Accrual basis recognizes revenues and expenses when they are earned or incurred, regardless of when cash is exchanged

• To record an expense on accrual basis, debit the expense account and credit the accounts payable or accrued expenses account

• To record revenue on accrual basis, debit accounts receivable and credit the revenue account

• Accrual basis ensures that financial statements reflect the true financial position of a company

• Accru...read more

The Golden rules of accounting are basic principles that guide the process of recording 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 help ensure that financial transactions are accurately recorded and classified in the accounting system.

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

Bank Reconciliation Statement is a document that compares the bank's records with the company's records of its bank account.

• It helps in identifying any discrepancies between the two sets of records.

• It includes items such as deposits in transit, outstanding checks, bank errors, and service charges.

• The goal is to ensure that the ending balance on the bank statement matches the ending balance in the company's accounting records.

Conservatism is a political and social philosophy that prioritizes tradition, stability, and gradual change over radical reform.

• Conservatism emphasizes the importance of preserving established institutions and values.

• It is skeptical of rapid societal change and advocates for incremental adjustments.

• Conservatives often prioritize individual responsibility, limited government intervention, and traditional family structures.

• Examples include Edmund Burke's defense of gradual refo...read more

Accrual basis of accounting recognizes revenue when earned and expenses when incurred, regardless of when cash is exchanged.

• Revenue is recorded when it is earned, not necessarily when cash is received

• Expenses are recorded when they are incurred, not necessarily when they are paid

• Matches revenues with expenses in the period they occur, providing a more accurate financial picture

• Required by GAAP for most businesses

When purchasing an asset from a foreign accounting, it is important to consider currency exchange rates and potential tax implications.

• Consider the impact of currency exchange rates on the cost of the asset

• Understand any tax implications or duties associated with importing the asset

• Ensure compliance with any international accounting standards

• Consult with experts or advisors familiar with cross-border transactions

• Keep detailed records of the transaction for financial reporting...read more

When purchasing assets from foreign accounting, it is important to consider currency exchange rates and any potential tax implications.

• Consider the impact of currency exchange rates on the cost of the asset

• Be aware of any tax implications or duties that may apply to the purchase

• Ensure compliance with any international accounting standards or regulations

• Consult with a financial advisor or accountant familiar with international transactions

• Keep detailed records of the transacti...read more

Sundry debtor refers to a person or entity who owes money to a company for goods or services provided on credit.

• Sundry debtor is a type of accounts receivable on a company's balance sheet.

• It represents amounts owed by customers or clients for goods or services provided on credit.

• Sundry debtors are typically short-term in nature and are expected to be collected within a year.

• Examples include outstanding invoices from customers, loans given to employees, etc.

Accounts receivable is the money owed to a company by its customers for goods or services provided on credit.

• Accounts receivable represents the amount of money owed to a company by its customers for goods or services provided on credit.

• It is considered an asset on the company's balance sheet.

• Companies often have specific departments or roles dedicated to managing accounts receivable and ensuring timely payment.

• Examples of accounts receivable include outstanding invoices, paym...read more

Types of depreciation include straight-line, double declining balance, units of production, and sum-of-the-years-digits.

• Straight-line depreciation evenly spreads the cost of an asset over its useful life.

• Double declining balance accelerates depreciation in the early years of an asset's life.

• Units of production depreciation is based on the actual usage of the asset.

• Sum-of-the-years-digits depreciation method takes into account the decreasing productivity of an asset over time.

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

• Debit what comes in, credit what goes out

• Debit the receiver, credit the giver

• Debit expenses and losses, credit income and gains

Journal entry of leasing involves recording lease payments and related expenses in the appropriate accounts.

• Lease payments are recorded as a debit to the lease expense account and a credit to the cash or bank account.

• Depreciation expense related to the leased asset is recorded in the income statement.

• Interest expense on the lease liability is recorded in the income statement.

• The lease liability is recorded on the balance sheet as a long-term liability.

• Initial direct costs inc...read more

Sale entry with TDS involves deducting TDS from the sale amount and recording it in the books.

• Determine the TDS rate applicable for the sale

• Calculate the TDS amount by multiplying the sale amount with the TDS rate

• Record the sale amount and TDS amount separately in the books

• Ensure that the TDS amount is deposited with the government within the due date