Accounting Questions and Answers for an Interview

Explaining your skills and knowledge is important in making a strong impression during your accounting interview. Interviewers want to understand how much experience and education you have and how it fits in their role. Refer to the job description to understand the employer's ideal candidate before your interview. In this article, we will discuss some of the questions you are likely to encounter in a job interview and provide example answers to help you succeed.

Accounting Interview Questions In Different Sectors

Accounting interview questions are usually related to the specific organisation and area. For example, interviewers from a trading company ask about goods in transit. Examiners working in a manufacturing company ask about purchases of raw material and finished products. Government or public agencies ask about contingent liabilities and types of taxes. Interview questions from non-governmental organisations (NGOs) are about tax calculations because these are non-profit legal entities.

You have to modify your responses according to the role. Your answers should be brief, but they should cover all the essential details about the topic.

Related: 7 Behavioural Questions For An Accounting Interview

Accounting Interview Questions And Answers

Regardless of the organisation and area, here are some common questions you can expect with tips and examples on how to answer them:

• Why did you choose accounting as a profession?

• Which accounting software are you familiar with? Which one is the best according to you?

• What is GST?

• Why do you want to join this company?

• What is a double entry?

• What do you know about a balance sheet? How is it prepared?

• What is a bank reconciliation statement?

• What is the difference between depreciation and amortisation?

• What are GAAP standards, and what are accounting standards accepted universally and in India?

• What are the factors affecting the cash flow of the company?

• What is contingent liability? What is bad debt?

• What is cost accounting?

Related: 48 Accounting Assistant Interview Questions (With Answers)

Why did you choose accounting as a profession?

This question is about your interest in accounting. Interviewers want to know that you are passionate about your job, which will help you stay motivated while you work. Try to be specific about your interest and indicate how your skills are useful in accounting. Mentioning your career progression and plans also help in showing your sincerity.

Example: "I believe that accountants make a significant contribution to any organisation and improve its fiscal condition. This job will provide me with the highest job satisfaction because it will give me a sense of purpose since I have been interested in working with numbers for a long time. This career will enable me to utilise my numerical skills to their full potential."

Which accounting software are you familiar with? Which one is best according to you?

Interviewers ask this question to check if you are aware of all the different accounting software available in the market. The second part of the question tests your opinions and experience working with these programs. It is important to provide a critical analysis of your preferred software and explain that you are willing to learn different programs.

Example: "I have worked with many software programs in my previous jobs. The software I used most was Microsoft Excel, Tally, Tally.ERP 9, Freshbooks and Zoho Books. I do not consider any of them to be the best, but I am also planning to learn QuickBooks. Its user interface is simple and allows me to focus on accounting tasks instead of switching between menus and fields."

What is GST?

This question checks if you are familiar with the recent development and changes in the taxation policies implemented by the government. It is a straightforward question, but try to add some extra information about the term in one or two sentences to make the answer more effective.

Example: 'GST stands for Goods and Services Tax, effective from July 1, 2017. It is a destination-based form of indirect taxation, which replaced many different indirect taxes, VAT, excise duties and octroi on value addition.'

Why do you want to join this company?

Interviewers want to know that you are genuinely interested in working for their organisation. To give a thorough answer, research the company's website to learn more about its goals, mission and work environment. Choose one or two things that you like the most and explain why they make you want to work for the company.

Example: "I applied for this position only after researching your organisation. The work ethic in your company is a perfect fit for my way of working. I also found that the vision of the company to diversify its business activities aligns with my goal of handling different types of accounting responsibilities. As an accountant, I would be able to contribute more and broaden my horizons."

What is double entry?

Double entries are a common accounting process that employers might ask about regardless of your experience level. It is most common for interviewers to ask them for entry-level jobs, but they might ask a mid- or senior-level candidate to see how they explain simple concepts. It is essential to memorise the terminology used in this profession so you can answer this question accurately.

Example: 'Double entry is a system of bookkeeping where every credit entry in an account requires a corresponding and opposite debit entry in a different account. So, the sum total of all credits is equal to the sum total of all the debits.'

How do you prepare a balance sheet?

This question is a common entry-level interview question. The interviewers check if you know the basics and if you can create a balance sheet in the absence of any accounting software.

Example: 'At the end of a financial year, the company journal is closed with entries up to that particular date. These journal entries are posted in the corresponding ledger accounts, and accounts are tallied to prepare the final balance sheet of assets and liabilities.'

What is a bank reconciliation statement and what are the factors affecting it?

Bank reconciliation statements are now mostly automated, but interviewers still want to know that you understand how they work. Refresh your memory on basic concepts, like bank reconciliation statements, to show you know how to review them and get any needed information.

Example: A bank reconciliation statement is a summary of matching entries in bank statements of a company with its balances in the cash book. The factors affecting it are:

• Interest received from the bank but not entered in the company's cash book

• Cheques issued but not presented in the bank

• Dishonoured cheques

What is the difference between depreciation and amortisation?

This is a very specific question to check your detailed knowledge of this subject. You can define both terms and give examples to showcase your level of understanding.

Example: 'Depreciation is the loss of value of tangible assets, like furniture and fixtures, machinery, buildings, computers and electronic material. Amortisation is writing off intangible assets, such as patents, loans and goodwill.'

What are GAAP standards and what are the other accounting standards accepted in India and abroad?

This question tests your knowledge of different accounting standards. You can just name them, or explain these in detail with any differences if you are feeling confident.

Example: 'GAAP stands for generally accepted accounting principles set by the Financial Accounting Standards Board. Companies in the United States must follow these standards. In India, companies must follow the Indian Accounting Standard set by the Accounting Standards Board.'

Which factors affect the cash flow of the company?

Cash flow differs from trading companies, manufacturing entities and government undertakings. You need to modify your answer based on where you are applying.

Example: 'Cash flow depends on the type of corporation. Trading companies generate income from trading activities. Manufacturing outlets generate revenues through sales of products. Government undertakings receive different grants from the government, which form their main source of income. The common factors affecting any cash flow are day-to-day operations, investments, financing operations and inventory.'

What is contingent liability? What is bad debt?

These two terms may seem similar, but they are very different. Interviewers want to know you can make the distinction, so make sure to provide a detailed answer.

Example: 'Contingent liability is an outcome of an event that may or may not happen. It is not an actual liability, so it is not included in the balance sheet. Instead, it is reported as a footnote. Bad debt is the amount considered as not receivable at all in the future, and is written off with permissions at a suitable date.'

What is cost accounting?

Cost accounting is one of the advanced concepts in accounting. If you are applying in a service- or product-based company, you should prepare to answer this question.

Example: 'Cost accounting is a way of determining the final price of products or services by considering the expenses incurred in their production.'

Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.

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