Top 20 Accounting Interview Questions with Answers
These questions assess whether you’re genuinely interested in this specific opportunity and whether you’ll thrive in their environment. Behavioral questions are designed to predict future performance based on past behavior. They’re often the most challenging because they require specific examples and detailed storytelling. We’ll cover everything from the dreaded “Tell me about yourself” opener to tricky behavioral questions that trip up even experienced candidates. Plus, you’ll learn how to turn potentially awkward questions about weaknesses and failures into opportunities to showcase your growth mindset and problem-solving skills. With an MBA in Finance and over 17 years in financial services, Kishore Kumar has expertise in corporate finance, mergers, acquisitions, and capital markets.
- This is required because if you are interviewing for a start-up where survival is the focus rather than the effectiveness of controls, they will prefer Tally, which will be very cost-efficient.
- They want to ensure that you can provide valuable input for informed decision-making and contribute to the company’s overall financial strategy.
- The weighted average cost of capital (WACC) is the proper discount rate to use for an unlevered DCF.
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For example, imagine a client pre-pays for their driveway to be repaved. Their payment is counted as deferred revenue until the company fulfills the service and repaves the driveway. Our blog articles are written independently by our editorial team. “What opportunities does this role have for professional development?
Core Technical Questions Every Accountant Faces
- Keeping liquidity in the form of funds in the bank can help the working capital flow, but it comes at an opportunity cost.
- Focus on how you identified the error and took corrective action.
- You can also expect to be asked about how you would respond to a specific work-related situation.
They’re designed to help the interviewer understand who you are, why you’re here, and whether you’ve done your homework. The discount rate, i.e., the cost of capital, needs to include all providers of capital, both debt and equity, which the WACC does. On the contrary, the cost of equity would be the right discount rate for a levered DCF. FCFF matches with WACC as FCFFs are the cash flows that belong to both debt and equity providers. The difference between a company’s total assets and liabilities is the net worth of the company. In simpler terms, it is the worth of the company after paying all debts.
Bonus: Tips for Cracking Accounting Interviews
Employers want to ensure that you have the necessary skills and experience to manage these tasks accurately and efficiently. Understanding the fundamentals of accounting is essential for anyone in the field, and the accrual versus cash basis is one of those core concepts. By asking this question, interviewers can gauge your knowledge of these accounting methods, as well as your ability to clearly explain the differences between them.
Top 20 Finance Intern Interview Questions and Answers (Updated
The best way to determine a company’s ability to cover short-term commitments is by using the current ratio. The current ratio involves dividing the company’s top 20 accounting interview questions with answers current assets by current liabilities. This ratio is sometimes referred to as the working capital ratio because it determines how much of the company’s liabilities will be covered by current assets. It states that a company’s liabilities and equity are equal to its assets. The accounting equation also relates to the balance sheet, which shows a company’s assets, liabilities, and equity.
Financing activities show activities such as borrowings, shares issues, etc. Very put, provision is an amount of profit put aside on the books to cover an expected / potential expense in the foreseeable future. In day-to-day accounting, there is a high chance that expenses already incurred in the given period may not be booked. A provision should be created in the books for these expenses, which we have already availed. Expenses incurred in a given financial year should be booked in the same year to maintain the true and fair view of the financial statements.
Interviewers appreciate candidates who can think logically under pressure. They’re not always looking for perfection but for clear reasoning. Showing composure in such moments can even leave a good impression. Cash basis accounting only counts money once it has been received.
Bank reconciliation is a vital part of an accountant’s daily duties, and employers want to ensure that candidates have a solid understanding of the process. Your ability to explain this process demonstrates your attention to detail and competence in managing financial data. Consider these accounting interview questions and answers as a first step in determining whether your candidate has the confidence, experience and personality to move forward with the position. Thank you for reading CFI’s guide to accounting interview questions.
In your interview, you can demonstrate an understanding of this process by discussing your experience in handling vendor invoices and maintaining good relationships with suppliers. If you have previous accounting experience, this is a great opportunity to discuss moments when you encouraged teamwork among your peers to get an end-of-year statement out on time. This question is also a time to talk about your time management skills. For those with more experience, it’s important to focus on an instance when you changed or created a process that directly impacted the company. You could talk about a time you noticed a specific report was consistently taking more time than expected.
Financial statements give an overview of the company’s financial position and performance, and this question tests your ability to explain complex concepts simply. Above we reviewed some of the most common interview questions job-seekers will face when applying for accounting positions. We also discussed how to answer each question and provided a sample answer.
How do you handle month-end and year-end closing processes?
By asking this question, interviewers want to gauge your understanding of internal controls and your ability to apply them effectively in real-life situations. Sharing a concrete example demonstrates your practical experience and highlights your problem-solving skills in the accounting field. As an accounting professional, you’ll be expected to work with various accounting software programs to manage financial data, generate reports, and perform other tasks. When you’re heading into an accounting interview, expect more than just a casual chat. Interviewers are there to explore your qualifications, technical knowledge, and how well you’d fit into their team or organisation.
But, you discovered a way to make the process more efficient, saving the company time (and money). The income statement, also known as the profit and loss statement, reports a company’s revenues, expenses, and net income over a specified period. It provides insights into the company’s profitability and operational efficiency by showing how well it generates profits from its operations.
This behavioral question within the technical category tests problem-solving skills. Accounting is considered one of the harder business majors because it’s up against majors like marketing, management and business admin. It’s an easier major when you compare it to the sciences or engineering. Once you grasp the basic fundamentals, it’s not a difficult major. I believe the accounting ERP used by your organization and Microsoft Excel will be my best friends, and I will be spending maximum time with these two applications at work.