Accounting and Taxation

Top 50 Accountancy Interview Questions with Answers.

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Some common accountancy interview questions with answers to help both the hiring manager and the candidate check out their finance and accounting skills.

People often use the word “accounting” to describe the process of putting together and sharing financial information. The ICAI (Institute of Chartered Accountants of India) is a small group of the best accountants in India. As a chartered accountant, you have the option of working for an organization or starting your own business. Any business of moderate size or larger needs professional accountants to keep its finances honest. Licensed professional accountants are in high demand in various sectors. The private corporate sector, the government, public undertaking organizations, and non-governmental organizations (NGOs) are all part of these sectors. After gaining chartered account certification, your career opportunities are endless. The various careers you can pursue as a professional accountant are Auditors, Cost Accountants, Management and Corporate Consultants, Tax Consultants, Financial Analysts, Company Liquidators, GST Experts, Corporate Finance Officers, Chief Executive Officers, Professors, etc.

In today’s competitive job market, interviews have become essential. It’s common knowledge that the procedure of applying for a job and then going through interviews can take a lot of time and effort. In this process, the employer evaluates the candidate based on several factors. These factors ensure that they are qualified for the position by verifying their credentials.

Accounting interview Question and Answers

In this article, we’ve included 50 sample accountancy interview questions with answers below to help you prepare for your upcoming interviews.

The entire Q&A section has been broken down into six sections for your convenience.

  • The Questions on Your Accounting Experience.
  •  Financial Accountancy Interview Questions with Answers.
  •  Managerial Accountancy Interview Questions with Answers.
  •  Cost Accountancy Interview Questions with Answers.
  •  Tax Accountancy Interview Questions with Answers.
  •  Auditing related Accountancy Interview Questions with Answers.

1.    The Questions on Your Accounting Experience:

Q1. Can you tell me a little bit about yourself?

The interviewer wants to start a conversation with you by asking this question. He wants to know what you’re like in general. This question gives you the chance to steer the conversation in the direction you want. The next question will depend on how you answer this one.

You can make an excellent first impression with your response to the query. Always make your answer fit the job for which you are applying.

Separate your answer into three parts: background information, your current role and expertise, and what you hope to achieve in the future.

Q2. How would you describe your strengths and weaknesses?

As you respond to this inquiry, please focus on the positive and ignore the negative. Focus on highlighting the skills that will help you succeed in the industry and leave out the flaws that have nothing to do with your ability to do the job. Your ability to understand and express yourself to others is a strength. You have a pleasant demeanor and can fit into new environments. Moreover, you seek opportunities to hone your abilities. Even more so, you make a serious attempt to expand your knowledge. These are examples of your strengths. When discussing your flaws, do so in a light-hearted manner. One of your weaknesses is that you trust everyone. Sometimes it brings good results; other times, it gets you in trouble.

Q3. What are your salary expectations?

Money can be a touchy subject, but there are appropriate responses.

Through research, you should always be aware of the going rate of pay for this position. Always go for the higher end of a range and show that you’re willing to bargain by showing that you have the skills and experience to do so. You should state your interest in the position and availability to the interviewer.

Q4. Why did you decide to leave your prior workplace?

Avoid disparaging references to current or former employers. Instead, say you’re seeking better prospects or professional growth. Make it clear why you’re a better match for the job.

Q5. Can you describe your plans for the next five years?

Teamwork and ambition are both admirable traits. Having a focus on the future demonstrates foresight. In your application, you should emphasize that you want a job that will help you grow. You hope that this new job will lead to better opportunities and responsibilities for you in the future.

2.    Financial Accountancy Interview Questions with Answers.

Financial Accountancy Interview Questions with Answers.

Q6. Can you walk me through the fundamentals of balance sheet analysis?

Candidates should be aware of the following when conducting a balance sheet analysis:

  • Determine if there will be any issues with the cash flow
  • Track the rise in sales and income.
  • Verify if the corporation has any outstanding debts.
  • Keep an eye on the profit margins.
  • Calculate the ROI of your possessions.

Q7. What methods would you use to evaluate a firm’s financial reports?

When answering these kinds of accountancy interview questions and answers, candidates can talk about the four ways to look at financial statements.

  • Horizontal Method

The horizontal method is a way to compare financial information from different time periods by putting it in columns next to each other.

  • Vertical Method

The vertical method looks at a financial statement by putting each item’s value in terms of a percentage.

  • Trend Percentages Method

The trend percentages method is used to compare financial statements over a long period of time.

  • Ratios Method

The ratios method is used to show how different things in a single period’s financial statement are related.

Q8. What steps make up a double-entry system, and when should you strive to avoid using one?

Some of the things that happen when you use a double-entry system are:

Keeping track of deals

Making up the final account

Make journal entries in the ledger account regularly.

In these types of accountancy interview questions with answers, aspirants could list some of the problems with a double-entry system and say that using one requires a lot of paperwork. If a company doesn’t have the people and skills needed, it might be best not to use a double-entry system because it’s hard to find mistakes in the books.

Q9. Is there a standard method for estimating and figuring out bad debt?

Aspirants must be familiar with the many techniques available for estimating bad debt, such as aging analysis. If you take the amount of bad debt and divide it by the total accounts receivable, you get the bad debt percentage.

Q10. Describe financial accounting’s dual-aspect principle.

When you do a Double Entry transaction, you change a matching account. Two accounts document all financial transactions. Double-entry bookkeeping records credits and debits. Since a negative balance cancels out a positive one, debits and credits must be equal. Double-entry bookkeeping simplifies problem-solving by simplifying accounting procedures and improving financial reporting.

Q11. What is the straight-line method of calculating depreciation?

To figure out the straight-line basis, take the asset’s purchase price and subtract its salvage value, which is an estimate of how much it will be worth when it is no longer needed. Divide that number by the number of years you expect the item will be useful, or its “useful life.”

Q12. What is the reducing balance depreciation method?

The declining balance approach uses the asset’s book value at the start of the year rather than a fixed percentage of its value for calculating depreciation.   In this case, the rate stays the same, but the amount of depreciation goes down over time because it’s based on the book value.

Q13. How many different kinds of business transactions are there?

 You can classify business deals into two broad categories: capital and revenue.

Q14. What is TDS? What part of the balance sheet does it occupy?

TDS collects tax at the source. A person (deductor) who owes a specific amount to another (deductee) must deduct tax at source and send it to the Central Government. The deductee whose income tax was deducted at source can claim the amount on Form 26AS or a TDS certificate from the deductor.

3.     Managerial Accountancy Interview Questions with Answers

Managerial Accountancy Interview Questions with Answers

Q15. What are the three mainstays of managerial accounting?

The three mainstays of management accounting are planning, making decisions, and controlling. Moreover, forecasting and monitoring progress are other essential features.

In these sorts of accounting interview questions and answers, the candidate should add further details about planning, making decisions, and controlling.

Q16. In what ways can managerial accounting contribute to the achievement of organizational goals?

Managerial accounting is a crucial business process that can affect a corporation in both the short and long term. At the optimal time, location, and cost, the managerial accountant ensures the company receives all the materials. In the long run, good managerial accounting will lead to more productivity and lower costs. In the short term, it will lead to fewer production stops because of a lack of raw materials.

Q17. Please explain why you would make an excellent managerial accountant.

I have the necessary experience as a managerial accountant as well as the abilities necessary for the position, such as the ability to communicate effectively, solve complex problems, and remain calm under pressure.

Q18. What managerial accounting technologies are you familiar with?

Information is key to a managerial accountant’s success in their role. Financial managers’ tasks involve budgeting, forecasting, managing risks, and giving advice on investments. Complex computer programs simplify the work of management accountants.

Mention your experience with software like Xero and Oracle NetSuite that helps with the financial analysis of a company. This system provides conventional and innovative reports for use in running a company. You can also talk about your familiarity with Oracle NetSuite. It’s a robust cloud-based ERP solution that has a multitude of resources for managing finances and accounting.

Q19. Define the term “accrual.”

Accrual accounting allows a business to record income before getting paid and expenses as they happen. A journal record tracks a company’s income and expenses, regardless of when money changes hands.

Q20. Six sigma: what does it mean?

Six Sigma is a method for constant improvement that uses data and statistics to find and fix problems in a service or product. The population standard deviation, or sigma, measures dispersion in a set of process-related variables.

Q21. Can you tell me about the cutting-edge tools you’ve used in managerial accounting recently?

Customer profitability analysis, predictive accounting, behavioral cost management, Cloud computing, artificial intelligence, and the industrial internet of things are just some of the cutting-edge managerial accounting tools I’ve worked with before (IIoT).

Q22. Define enterprise performance management (EPM).

Closing the books is an aspect of enterprise performance management that consolidates and finalizes outcomes (EPM). The major users of EPM are CFO and finance department. HR, marketing, sales, and IT also utilizes EPM data for planning and reporting.

Q23. What exactly does “predictive accounting” entail?

Finance departments must provide fast insights and analysis in today’s harsh corporate environment. Predictive accounting anticipates future financial performance based on past operations and performance. Predictive accounting seeks future insights. It believes

that the company’s work is repetitive.

4.    Cost Accountancy Interview Questions with Answers.

Cost Accountancy Interview Questions with Answers.

Q24. How would you define “costing”?

When we talk about “costing,” we mean the process of calculating expenses. For this reason, it encompasses the methods and procedures used to find out the prices of goods and services. These include historical costing, marginal costing, absorption costing, and standard costing, all of which are used in different fields.

Q25. Can you please explain the three cost models?

Process costing, job costing, and direct costing are the primary costing approaches. The production and decision-making settings in which each of these techniques excels vary.

Q26. What are the top three uses for cost accounting?

  • Cost accounting is a way to figure out how much a product costs.
  • Most of the time, it’s up to each business unit to decide how much to charge for the goods they sell. A business should price its goods and services in such a way that they cover its production and distribution expenses. The product’s cost structure, market conditions, consumer segments, and supply and demand determine the pricing of a product or good.
  • Cost accounting helps reduce waste. Cost accounting analyses and sorts cost to find money, time, or effort lost. By examining the inefficiency in asset use, we can get to the root causes of the problem.

Q27. What role does cost accounting play in pricing?

Cost accounting helps management figure out how much a product or service will cost to make and how much it will cost to sell. This helps them make decisions about how to run the business. Using the cost value as a guide, management can figure out ways to control costs to make as much money as possible.

Q28. Give some context regarding the drawbacks of cost accounting.

  • Cost accounting records only the past monetary value of past transactions. Hence, it is not up to date with the current state of the business.
  • Raw materials, labor, and other input prices change, making accurate cost projections impractical. Costs fluctuate due to supply-and-demand shifts, government policies, and the economy.
  • To record transactions in the books of account, one must know how to record transactions, identify them, and summarize them so that the user can understand them. No one can record a transaction without proper accounting understanding. Secondly, keeping books of accounts and cost records is expensive and time-consuming. Bookkeeping is impossible for small and medium-sized organizations.

Q29. What do you mean by “cost center”?

A cost center is a division or group within an organization that does not generate revenue but has an indirect financial impact on the business. Cost centers boost the profit of the organization indirectly. These jobs fall under the categories of administration, service, and support. These roles are crucial to the company’s success.  Therefore, organizations cannot cut these roles.

Q30. Can you explain the various cost centers?

Cost centers come in two main types:

Production cost centers are the areas where the products are made or produced. One example of this is a shop floor.

Cost centers that provide services to these other cost centers are called “service cost centers.” Examples of these are the HR or IT departments.

Q31. Why is it essential to have cost centers?

Cost centers are important because they give the company something of value. The remaining business can run without hindrance because of these departments and jobs. Cost centers are essential to any well-functioning business for the following reasons:

  • They make things better for the clientele.
  • They do routine upkeep on structures and machinery.
  • Scientific investigation and innovation are the results of their efforts.
  • Business strategy and data analysis are two of their primary responsibilities.
  • They oversee administrative duties.

Q32. What Does “Cost Unit” Mean? Could you give an example to explain?

To put it simply, it’s the basic monetary measurement for goods and services that serves as the basis for pricing calculations. Kilowatt-hours, tonnes, liters, consulting hours, and even patent rights are all examples of units of production.

5.    Tax Accountancy Interview Questions with Answers.

 Tax Accountancy Interview Questions with Answers.

Q33. Could you please differentiate between tax accounting, forensic accounting, and auditing?

These accountancy interview questions with answers test your knowledge of accountant functions.

These three sections are the basis for all accounting.

Tax accounting focuses on a company’s financial records. It prepares tax forms and quarterly and yearly financial reports. A secondary objective is to lower the organization’s tax burden.

Forensic accounting is the process of looking at a business’s books and other records for legal and business reasons.

Accounting records, along with the organization’s processes, rules, and operations, are subject to auditing. The company conducts an audit to guarantee compliance with all laws and regulations and to identify areas where things are going wrong.

Q34. How do you define and record a deferred tax liability?

Deferred tax liability is an assessed tax that hasn’t been paid. This occurs when liability is recognized in one period but not paid until a later period. Installment sales are one such example. Deferred taxes are recorded as owner’s equity liabilities.

Q35. What exactly are long-term capital gains, and how do they differ from short-term ones?

These technical accountancy interview questions with answers test your flexibility.

Companies can realize capital gains by selling off assets like land, buildings, machinery, or stocks and bonds. To figure out the profit, you take the difference between the asset’s original buy price and its final sale price, minus any discounts or credits for costs incurred during the selling process. It’s the holding period that decides whether an investment yields a long-term or a short-term return. For each type of investment, the time frame is different.

Q36. Explain the concept of inter-company reconciliation.

Companies must only file a consolidated tax return for their parent firm. Individual subsidiaries may, besides, make up the organization. Organizations can assign transactions to each subsidiary after completing an inter-company reconciliation. This results in a more accurate portrayal of the subsidiary’s financial condition and performance, as well as the avoidance of duplicate transaction recording.

Q37. Why is it essential for businesses to keep their tax records for at least seven years?

Businesses must keep tax documents for seven years in case of an IRS examination. This prevents an IRS audit and makes information searchable. Accountants can look at tax returns from previous years to lower a company’s tax bill and file an amended return. Prior years’ tax returns can help estimate future taxes and reveal tax-saving trends.

Q38. How would you define total income?

Total income determines a person’s income tax. It’s the income that originates in India (excluding revenue earned or received outside of India). Total income includes all earnings (salary, tips, commissions, sales, dividends, etc.). Tax liabilities, a business’s financial health, and a person’s or entity’s ability to pay payments depend on total income.

Q39. How many heads appear below the total income column? Mention them.

There are five categories listed under total income. They constitute

  • Earnings from Salaries
  • Income from real estate
  • Gains and profits from a business or vocation
  • Capital gains
  • Other sources of income

Q40. How may a taxpayer get a tax refund for an overpayment?

Overpayment of tax is returnable in India, along with interest.  It’s important to file your income tax return on time if you want to receive a refund. In the “Status of Tax Refunds” section of the NSDL-TIN website, you can find out where your refund request is by entering your Permanent Account Number (PAN) and the assessing year for which you are asking for a refund.

Q41. What is a Deferred Tax Asset?

When a company overpays taxes, the money is recorded as deferred asset tax or provision for future taxation. A deferred tax asset emerges when a company pays taxes early or overpays and is entitled to a refund.

6.   Auditing-related Accountancy Interview Questions with Answers.

Auditing-related Accountancy Interview Questions with Answers.

Q42. Define internal audit for me, please.

Internal auditing is the process of looking objectively at a company’s financial and operational procedures.

Q43. Define what you mean by ” independent (external) audit” and “in-house (internal) audit.”

In-house (Internal) auditors will examine business process problems and hazards. But the independent (external) auditors perform an audit of the company’s financial records and then provide their verdict on the company’s financial statements.  Internal auditors monitor the company’s activities at regular intervals throughout the year. The external auditors perform one audit per year.

Q44. Decommission Liability: Could you please explain what this term means?

The amount due upon permanent plant shutdown is the decommissioning liability of the corporation.

Q45. What are the necessary elements for an internal audit?

When conducting an internal audit, the treasurer must produce all relevant financial documents, including the bank statement, checkbook register, canceled checks, deposit slip, expense vouchers or warrants with bill receipts, annual treasurer’s report, etc.

Q46. What are the benefits of doing an in-house (internal) audit?

A reliable in-house (internal) audit is essential for:

  • Boost the magnitude and complexity of corporations
  • Raise the bar for conformity
  • Pay close attention to internal controls and risk management strategies.
  • Innovative approaches to business
  • Regulators have imposed stringent standards to safeguard investors.
  • There is a lot of emphasis on IT in a competitive market.

Q47. How do you define vouching?

Vouching is the process of making sure that the vouchers kept by management are real by comparing them to the supporting documents.

Q48. When conducting an in-house (internal) audit, how should you go about it?

Internal auditing entails doing the following:

  • Determine your end goal.
  • Find the risks and go over the goals
  • Plan and check on things
  • Check the facts and finish the work.
  • Construct a report or product that will prompt them to take action.
  • Proceed

Q49. Define the term “drawn plan” as it pertains to internal auditing.

The internal auditor, audit committee, and top management agree on risk assessment, which determines audit periodicity.

Q50. After the internal audit, what should be the next step?

As a result of the internal review,

  • Gather the auditees and the auditors together to go over the non-conformances and the missing pieces.
  • Timely audit reports should prompt auditees to fix concerns.
  • Assist the responsible parties by suggesting workable timeframes for completing the necessary corrective activities.
  • Consider the auditees’ reactions and how they felt your team did.

The Bottom line.

We appreciate you taking the time to read our guide to accountancy interview questions with answers by Henry Harvin. Getting ready for the interview is important if you want to get the accounting job of your dreams. In light of this, we’ve put a lot of effort into developing specialized guides that will assist you in getting ready by providing you with practice accountancy interview questions with answers.

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FAQs

Q1. Can you please explain what a chartered accountant (CA) is?

The ICAI (Institute of Chartered Accountants of India) recognizes only chartered accountants as qualified accounting professionals in India. The ICAI has three distinct examinations to gauge its competence. Each exam can take up to 3 hours and be worth a maximum of 100 points.

Q2. Why a CA career is interesting?

Being a chartered accountant not only allows you to adapt to changing circumstances, but also provides you with a solid foundation from which to build a secure future. Laws, alterations to in-laws, and other nuanced, nuances are all well within their sphere of expertise. That’s why nearly every business hires certified public accountants to oversee its books.

Q3. Is there a minimum age to take the CA Foundation Exam?

There is no age limit for individuals who wish to take the CA Foundation examination.

Q4. Is it hard to get CA certification?

The test is easy. It’s for 12th-graders, bachelors, and professionals. The syllabus helps candidates pass the exam. Yet, it is one of India’s toughest exams.

Q5. How much money does a certified chartered accountant make in India?

In India, the annual salary for a chartered accountant ranges from 2.5 lakhs to 15.0 lakhs, with an average of 7.0 lakhs.

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