11 Commerce Interview Questions (With Sample Answers)
By Indeed Editorial Team
Updated 4 September 2022 | Published 1 May 2022
Updated 4 September 2022
Published 1 May 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Commerce is a broad subject that encompasses any activities involving the exchange of goods and services. If you are a fresh commerce graduate looking for jobs within this field, the interviewer may expect you to know about concepts related to business, production, economics and finance. Having an idea about what kind of questions the interviewer may ask can help you prepare better and succeed at your interview. In this article, we discuss 11 commerce interview questions and learn how to answer them.
11 Commerce Interview Questions With Sample Answers
Here are 11 commerce interview questions that an interviewer may ask:
1. What are liquid assets? Give examples.
There are different types of assets that a business holds for different purposes. The interviewer wants to know if you are familiar with these. It may show them you can read and understand a balance sheet and evaluate the assets, liabilities and debts of a company.
Example answer: 'Those assets that a company can quickly convert into cash within a short timeframe are called liquid assets. These can be commodities for sale or inventory, money in the bank, accounts receivable and other items that you may exchange for cash within a year. Liquid assets are also referred to as current assets on the balance sheets. It is important for a company to have a certain amount of liquid assets as it helps with day-to-day operating costs.'
2. What is the purpose of audits?
Audits are an integral part of operating a business. While earning revenue, companies are required to make sure they are following all the important government rules and regulations so they can stay out of trouble. The interviewer wants to see that you understand the seriousness of this.
Example answer: 'An audit involves examining the financial data of a company to verify that they have correctly logged the details in the balance sheets. There are many reasons companies or third parties carry out audits of their financial records. It creates more transparency and enhances the trust factor. Employees who can access the audited reports may feel more secure about their positions in the company if the reports are positive. It also builds trust among the creditors and investors. One of the major reasons to conduct an audit is to ensure the company abides by the legal protocols.'
3. What is a value-added tax?
In the course of running their business operations, there are many taxes and liabilities that a business pays. The interviewer may want to see if you are familiar with the tax system and such government regulations.
Example answer: 'Value-added tax, or V.A.T., is a tax that is levied at various stages of the production and distribution cycle of goods and services. There are different VAT rates for different types of goods and services. For instance, some products are exempt from VAT, such as salt and khadi. Products that are usually priced high like gold and silver, have a VAT of one per cent. Goods bought and used more frequently, like cooking oil, medicines and tea, attract a VAT of four to five per cent.'
4. What is a capital asset?
Like liquid assets, capital assets are equally crucial in running a business smoothly. The interviewers want to know if you are aware of what represents capital assets and how they are beneficial for the company. Give examples of some capital assets in your answer.
Example answer: 'Capital assets are those assets that can be used to make more money. These can be financial assets, tangible assets, human capital and brand capital. Companies can easily liquidate financial assets into cash or cash equivalents. Tangible assets include the machinery and the factory where the product gets manufactured. Human capital includes the human resources or people who work for the company. Brand capital is the anticipated value of a brand based on its recall and recognition.'
5. What is a subsidy?
There are certain government policies and offerings that can help businesses grow and prosper. It is important to know what these policies and offerings are so that they may capitalise on them for better results. You can describe what a subsidy is and how it benefits businesses.
Example answer: 'A subsidy is a type of financial aid or concession offered by the government to individual entities or businesses. The government may do this to help the business continue to offer products at subsidised rates and prevent price hikes. Sometimes, they do it to offset the negative impact of an economic crisis or market fluctuations.'
6. What is the role of a public relations department?
There are various departments that assist in the smooth functioning of business operations. Every department has a unique role to play, but they work in conjunction and coordination with each other. You can describe what a public relations department does with some examples of their duties.
Example answer: 'A public relations department has a crucial role to play in the image management of a company. They manage media relations, handle publicity, answer public enquiries, coordinate conferences and track and assess media coverage. They also manage guest relations, visit agendas and tours, prepare brochures and other communications materials and marketing publicity.'
7. What do you understand about equilibrium?
Prices can often fluctuate depending on the demand and supply. It is important for a product to reach its equilibrium price to ensure a consistent demand where the price stops fluctuating. You can start by describing what an equilibrium is and then give an example to explain it further.
Example answer: 'Companies achieve equilibrium when the demand and supply match. This is when the price becomes stable. When the supply of goods is more than its demand, prices may fall. As a result, the demand shoots up, causing the price to rise again. For example, a shop manufactures 100 tool kits and prices them at ₹700 each. At this price, it attracts 20 buyers. So, it drops the price down to ₹500 per toolkit and gains another 30 buyers. When it drops the price to ₹350, it attracts a total of 100 buyers. ₹350 is the equilibrium price point.'
8. What is a futures market?
Trading and investment are some of the ways in which many businesses try to increase their revenue. Having an excellent knowledge of these can be beneficial for anyone working in the commercial sector. Try to explain what a futures market is and who trades in futures.
Example answer: 'A futures market is one where you can buy or sell securities for a future date. The price of the security remains the same as the current price but the delivery is at a later date. Such transactions are also referred to as futures contracts. Futures trading is a popular way for some very seasoned traders to make money.'
9. What do you understand by free trade?
Identifying opportunities for business growth is one of the key aspects of running a successful business. Free trade is one such opportunity. You can explain what this policy is and how it benefits businesses.
Example answer: 'Free Trade is a policy where the government permits free movement of imports and exports without discriminating against them. They do this by refraining from applying tariffs or subsidies. There are conflicting views about whether it is beneficial to have free trade. I think it is in the interests of all involved as free trade leads to more efficiency, innovation and growth. It also makes high-quality products available to buyers at lower prices.'
10. What is a mortgage?
Loans, debts and liabilities are almost unavoidable in business. It is important to know the right actions to take so that these can get paid off. The interviewer wants to check if you understand the various aspects of a loan and debts in business.
Example answer: 'Businesses and individuals may sometimes require heavy loans from the bank or lending parties. When it is a large sum, the bank may insist on keeping a piece of land, property or securities that the borrower owns as a mortgage. They hold the mortgage until the borrower pays back the loan amount.'
11. What is a guarantor?
There are different parties or individuals that partake in a loan agreement. A guarantor is usually required when taking a heavy loan. Explain what a guarantor is and what their responsibility entails.
Example answer: 'A guarantor is an individual or entity that promises to take responsibility for another person's obligations in case they fail to do so. This can be by paying off a debt that is owed by them or clearing off payments. Usually, when someone takes a big loan, they require a guarantor who has the desired net worth or ability to fulfil the commitment.'
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