Top 10 Basic Accounting Interview Questions and Answers
Preparing for an accounting interview? Before you go through the questions, it is also necessary to get an overview of accounting in the job market. There is no denying the fact that the level of competition is extremely intense. Most organizations are looking to hire a competent candidate, who has good knowledge in the field. Your business language, and the ability to handle questions on how you can help the growth of an organization, will be of added advantage.
How do you improve the knack of driving the points across to the interviewer? Here are the most frequently asked accounting interview questions along with the answers. This will be the key to acing the accounting interview. It guides you into finance, FP & A, equity and more.
More so, interviewers do touch the basic as well as the most challenging questions. Get started with these set of accounting job questions and answers for next interview.
Q1. Why do you want to make a career as an accountant?
Ans. I have a great fascination with numbers, and always loved working with it. To help organizations, corporations identify measures for cost-cutting, not previously discovered, developing tax strategies, or performing sensitive analysis to support revenue projects and forecast is the ideal I have.
Q2. What is working capital?
Ans. The current asset minus current liabilities, which is used in day-to-day trading, is called Working Capital.
Q3.What does having negative working capital mean?
Ans. Negative working capital indicates the efficiency in businesses with low inventory and accounts receivable. In other industries, negative working capital may relate that a company is facing financial trouble.
This is common in certain industries like the restaurant business, or grocery retails.
For instance, at a grocery store, customers pay upfront, inventory moves relatively quickly, but the suppliers often give 30 days or more credit. This means that the company receives cash from customers prior to paying cash to the suppliers.
Q4.What’s the most challenging accounting task you’ve to have to solve?
Ans. I haven’t faced a lot of tough accounting challenges or tasks in the real world. However, having graduated from a top University of Accounting puts me in an extra edge. I am imbued and confident that I can solve an accounting problem to its best, then the rest of the candidates, or even my other fellow students.
I have had the privileged of working as an intern in a Tax Consulting organization and made the selection from amongst 200 other candidates. I was assigned several challenging tasks and brought out solutions to it.
Q5. Which accounting software are you familiar with?
Ans. I have had the experience of working with several accounting software programs. But, I am comfortable working with Netsuite, Abila, and Zoho. Recently, I started using Intacct, it has a host of features like forecasting and performance management. Intacct is rather difficult to learn but is straight and easy to understand once you are familiar with the interface. I would be glad to know, which accounting software do you use?
Q6. How do you maintain accounting accuracy?
Ans. Maintaining accounting accuracy is the organization’s most important activity. The otherwise can lead to huge losses. There are numerous tools and resources which can be used to limit the potential for errors to occur, and identify those errors quickly. It requires identifying revenue streams, keeping track of the invoices and receipts, preparing all financial statements, tracking all deductible expenses and preparing for tax returns.
Q7. What are the common errors in accounting?
Ans. Errors in accounting are numerous. The most common are – errors of omission, errors of commission, errors of principle and compensating error.
Q8. How does an inventory write-down affect the three statements?
Ans. On the balance sheet, the asset account of inventory is decreased by the amount of the write-down, along with the shareholders’ equity. The income statement gets hit with an expense in either COGS or a separate line item for the amount of the write-down, which reduces the net income.
On the other hand, on cash flow statement, the write-down is added back to CFO as it is a non-cash expense. But, it must not be double-counted in the changes in non-cash working capital.
Q9: If you were CFO of our company, what would keep you up at night?
Ans. I would step back and give a high-level overview of the company or organization’s current financial position. For income statements, my priority would be its growth, margins & profitability. Take attention to balance sheets: its liquidity, capital assets, credit metrics, and liquidity ratios. Cash flow statements for both long-term and short-term would be my focus, and seek to raise money or return capital to shareholders.
Q10: If I had only one statement and wanted to review the overall health of a company, which statement would I use and why?
Ans. Cash is always the king. It is the cash flow statement that gives a true picture of how much cash the company is generating income. The three statements give a picture of the health of the company.