Senior Private Equity Fund Accountant Interview Questions and Answers

Accrual and cash entries impact the balance sheet differently.

• Accrual entry records revenue or expenses that have been earned or incurred but not yet received or paid.

• Cash entry records the actual inflow or outflow of cash.

• Accrual entry affects the income statement and balance sheet, while cash entry only affects the balance sheet.

• Accrual entry increases or decreases both revenue and expenses on the income statement, which in turn affects the net income.

• Accrual entry also inc...read more

A master-feeder structure is a common investment structure in private equity funds. Blockers and feeders are two types of entities within this structure.

• A master-feeder structure is used to pool capital from different types of investors into a single investment vehicle.

• The master fund is the main investment vehicle that holds the assets and makes the investments.

• Feeder funds are separate entities that pool capital from specific types of investors, such as individuals or insti...read more

Corporate events impact the treatment and pricing of securities in private equity funds.

• Corporate events such as mergers, acquisitions, divestitures, and bankruptcies can affect the value of securities held by private equity funds.

• The treatment of these events in accounting practices can vary based on the specific circumstances and accounting standards.

• Pricing of securities may be adjusted to reflect the impact of corporate events on the underlying assets of the fund.

• Examples...read more

Prepaid fees allocation journal entries involve recognizing expenses over time instead of all at once.

• Prepaid fees are initially recorded as assets on the balance sheet

• Allocate a portion of the prepaid fees to expenses each period

• Debit the expense account and credit the prepaid fees account

• Repeat the journal entry each period until all prepaid fees are expensed

• Example: Debit Expense Account $1,000, Credit Prepaid Fees Account $1,000

The footnotes section of an investment report provides information on the levels of investment.

• The footnotes section typically includes details on the types and amounts of investments made.

• It may provide information on the allocation of funds across different asset classes or sectors.

• Footnotes can also disclose any significant changes in investment strategies or portfolio composition.

• Examples of footnotes could include details on investments in specific companies, industries,...read more

PPM and LPA are legal documents used in private equity funds.

• PPM stands for Private Placement Memorandum, which is a legal document that provides detailed information about a private equity fund to potential investors.

• LPA stands for Limited Partnership Agreement, which is a legal document that outlines the terms and conditions of the partnership between the general partner and limited partners in a private equity fund.

• PPM focuses on providing information about the fund's inve...read more