Senior Private Equity Fund Accountant
Senior Private Equity Fund Accountant Interview Questions and Answers
Q1. Accrual entry and cash entry of the same. How it affects the BS
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
Q2. Master Feeder structure. Difference between blocker and feeder
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
Q3. Coptorate events and its trestment and pricing of securities
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
Q4. Journal entries of prepaid fees allocation .
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
Q5. Levels of investment in Foot note section
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
Q6. Day to day activities of fund accounting
The day to day activities of a fund accountant involve maintaining financial records, reconciling transactions, preparing financial statements, and providing support to investors and auditors.
Maintaining accurate financial records for the private equity fund
Reconciling transactions and ensuring accuracy of investment data
Preparing financial statements, including balance sheets, income statements, and cash flow statements
Calculating and distributing investor capital calls and ...read more
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Q7. PPM vs LPA difference
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
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