30 Accounting Interview Questions and Sample Answers
Looking for accounting interview questions and answers? Interviewing for an accounting position requires a firm understanding of an organization's accounting function. And whether interviewing with a public accounting firm. Or with a business directly. The hiring manager is going to test core competencies through behavioral interview questions. And domain knowledge of the accounting function or the accounting process. All through questions that qualify the candidate.
An accounting interview process is similar to any other job interview. A hiring manager or accountant will perform the interview. The interviewer will sit with the candidate for anywhere from 30 minutes to one hour. And ask several questions that address the requirements of the accounting role.
Some roles that these interview questions are applicable for are:
- Staff Accountant
- Accounts Receivable Clerk
- Accounts Payable Clerk
- Payroll Clerk
- Certified Public Accountant
- Accounting Manager
- And any other accounting job.
Preparing for an upcoming interview
Questions like these can be seen when being hired as an accounting professional in a public accounting firm. Or a small accounting firm. Or by the business directly as part of the accounting department.
These questions are less applicable for those applying to investment banking positions. When the interviewer asks a behavioral interview question, which starts with, “Tell me about a time.” It should get answered with a previous work situation and story. Use the STAR method to answer these questions. STAR stands for “Situation, Task, Action, and Result.” And can be a helpful method for telling a unique and insightful story in a short period of time. A behavioral question will always be an open-ended question that prompts the candidate to tell a story.
All interview questions should get answered in roughly 90-seconds or less. As a job candidate, it’s important to have a friend or family member ask each interview question. And practice delivering a response to the prospective employer.
Accounting Interview Questions and Sample Answers
Below is a list of common accounting interview questions and sample answers. Take each answer and customize it to the employer. Or to the requirements listed in the job description. Never repeat these sample answers verbatim.
1. What does it mean to be an accountant?
Sample answer: An accountant is an essential function of a business. Without the accounting function and accounting application applied to a business. The organization and business operators can suffer losses. Or financial burdens at the end of each quarter or fiscal year. The accounting concept is the act of recording financial activity to report and review the status and health.
2. Why is accounting important to a business?
Sample answer: Accounting is important to the business because it alleviates a heavy burden on the operators to track accounting principles and accounting functions. If the operators were to track the business's accounting needs, the regular service providing or product development of the business would get slowed.
3. What is a balance sheet?
Sample answer: A balance sheet is a statement of financial position or statement of financial condition. It is a summary of the financial balance of the organization and the business.
4. What is the financial statement?
Sample answer: A financial statement is similar to a balance sheet in that it provides relevant financial information with a structure behind it. This provides the ability to oversee financial status and conditions. Or other details of a companies financial picture.
5. What are the accounting standards?
Sample answer: Accounting standards are guidelines that accounting professionals should follow as it pertains to the organization and business type. These are a common set of standards, procedures, and operating policies that define the organization's accounting practice.
6. What is accounting software used to handle accounting needs?
Sample answer: Quickbooks, Quicken, and Microsoft Excel are the most common accounting software forms.
7. What is “cash flow”?
Sample answer: Cash flow is the net amount of cash and cash-equivalents being transferred into and out of business. Cash flow gets calculated by making certain adjustments to net income by adding or subtracting differences in revenue, expenses, and credit transactions.
8. What is a “cash flow statement”?
Sample answer: A cash flow statement sometimes gets referred to as “cash flows.” It is a financial statement showing how changes in balance sheet accounts and income affect cash and cash equivalents.
9. What is a fixed asset?
Sample answer: A fixed asset sometimes gets referred to as a tangible asset or property. This would be equivalent to machinery and equipment or real estate property. This is a term used to describe assets that cannot be easily converted into cash.
10. What is a contingent liability?
Sample answer: A contingent liability is a liability contingent on the outcome of an event. For example, an uncertain future event like a pending lawsuit would get considered a contingent liability.
11. What is a ledger account?
Sample answer: A ledger account or “accounting ledger” is an account or record used to store bookkeeping entries. This ledger is then used as the entries that need to be placed into the balance sheet and income statement transaction. Accounting ledger entries can include cash, accounts receivable, investments, accounts payable, expenses, and other customer deposits.
12. What is a depreciation expense?
Sample answer: A depreciation expense is when a company allocates an asset’s cost through its useful life. When a company prepares financial statements, it records a depreciation expense to allocate a portion of the cost of the expense itself. This could be a building, machinery, equipment, or other operating equipment purchased in that fiscal year.
13. What is a bank reconciliation statement?
Sample answer: A bank reconciliation statement is a summary of banking and business activity. It reconciles an organization's bank account with its financial records. This includes deposits, withdraws, and other financial activities.
14. What would a tax accountant help with?
Sample answer: A tax accountant would help with tax strategies. This would be a professional who would help in assisting the minimization of taxes or the elimination of tax payments.
15. What is a trial balance?
Sample answer: A trial balance is a list of all general ledger accounts in the ledger of a business. In short, it is a bookkeeping worksheet that compiles all the credit and debit account columns totals into one balance.
16. What is an income statement?
Sample answer: An income statement. Or P&L (profit and loss statement). Are both a financial statement that shows a company the revenues and expenses during a particular time period. This is calculated by looking at the net income or net profit after subtracting expenses, depreciation, and taxes.
17. What are tangible assets?
Sample answer: Tangible assets are similar to a fixed asset. This would be an asset that cannot be easily converted to cash. This includes real estate property, heavy machinery, and other operating equipment.
18. What is the accounting principle?
Sample answer: An accounting principle is a standard operating procedure followed and accepted by the accounting team. Accounting principles refer to the broad underlying concepts that guide accountants when preparing financial statements and following other accounting professions' financial protocols.
19. What is a current asset?
Sample answer: A current asset or “current assets” can include cash. And cash equivalents. Accounts receivable assets. Stock inventory. Marketable securities. Prepaid liabilities. And other liquid assets. Contrary to a tangible asset, which is more difficult to convert to cash, current assets are reasonably expected to sell.
20. How would you handle a difficult client?
Sample answer: Difficult clients come in any service industry. When a difficult client is present, it's important to practice empathy. It's best to put ourselves in their position. And try to see what they see. And then speak to them the way we would like to be spoken to.
In short, it's best to learn about the client. Learn what their needs are. How they are interested in being interacted with. And then try to be the best service provider we can.
21. What would you like to accomplish as an accountant?
Sample answer: After graduation, I decided to pursue being a CPA. And getting my certification. I'd like to learn what it takes to operate a firm. And learn more about the client-services part of this business. For me, it's important to learn what businesses require and how we can help address requirements.
22. What is TDS?
Sample answer: TDS stands for Tax Deducted at Source. It is a concept aimed at collecting tax information at every source of income. This is important for both personal finance and corporate finance. In a balance sheet, it's shown in the assets portion. And should be placed right after the head current asset.
23. What would you do if a company showed positive cash flows but was still in trouble?
Sample answer: A company can show positive cash flow but still have unsustainable sources of income. Projected or forecasted losses or market condition changes can be major factors in this. It's best to inform clients of these projections. And try to provide some insight into how this might be curved or avoided.
24. What are the common errors in accounting?
Sample answer: Errors of omission are one. Errors of commission. Errors of principle. And compensating errors. These errors are dependent on the accountant working with the business. In short, they are human errors. These types of errors can be costly for a business.
25. What's the key difference between inactive and dormant accounts?
Sample answer: Inactive accounts are closed. And are no longer being used by the business in the future. A dormant account is not currently functional. But still could be used by the business in the near future. Or far future. Dormant accounts are useful to a business.
26. What are ways to estimate bad debts?
Sample answer: Bad debts can be estimated by looking at the percentage of outstanding accounts. The accounts aging analysis. And the percentage of credit sales on behalf of the business. These figures can provide insight into the business's "bad" debts.
27. What is a deferred tax asset?
Sample answer: A deferred tax asset is when the taxable amount has been paid. Or has been carried forward. But has not been recognized in the income statement. The value is created by looking at the book income and the taxable income. And then taking the difference between these two metrics.
28. What's your favorite accounting application?
Sample answer: Personally, I prefer using Microsoft Excel. Some clients prefer to use tools like CGram, Financial Force, Microsoft Dynamics AX, and more. But my favorite is using spreadsheets. And using formula's inside those spreadsheets to perform complex actions on financial data.
I've used a variety of software. And I try to keep my approach simple. I believe the simple approach carries over to the client.
29. What's a bank reconciliation statement? And how is it different from a regular bank statement?
Sample answer: A bank reconciliation statement (or BRS) is a form that follows individuals. The purpose of the statement is to follow personal bank account records. Usually, issued on behalf of the bank or institution. It refers to their personal bank activity. And looks at debits, credits, and other balance differs from the cashbook balance.
Often confused with the bank statement. And which is a core part of the process. But is not the same as a reconciliation statement.
30. What's a purchase return?
Much like the name indicates, a purchase return is the return of merchandise. This should be reflected in the balance sheet. A purchase return can be for multiple types of assets. But mostly surrounding fixed assets. Where a customer or buyer experienced unsatisfactory products. And returned the products to the seller.
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