Are you interviewing for the accounting job profile? If you are wondering what type of questions you are likely to face in the interview, we are here to help.
Below given is a list of common accounting interview questions that can help you prepare well for your upcoming interview.
Before we start, let’s understand the accounting interview process.
Accounting Interview Process Explained
Most accounting interviews follow six main steps:
- Resume screening
- Aptitude or basic accounting test (optional)
- Technical interview
- HR interview
- Final or managerial round
- Offer and onboarding
Read more: What is Accounting? A Complete Guide for Every Business
Most Common Accounting Interview Questions
These are some frequently asked accounting interview questions you might come across during interviews.
1. Define what is a balance sheet?
A balance sheet is a statement consisting of all the assets, liabilities, and capital of a company at a certain point.
2. What does Tally accounting mean?
Tally accounting is an ERP software that is used by small as well as large businesses for business functionalities like accounting, finance, inventory, payroll, etc.
3. What is the difference between capital and revenue transaction?
This is one of the most common accounting interview questions.
Accounting involves two types of business transactions-capital and revenue. Revenue transaction refers to the transactions relating to the day to day activities. A capital transaction refers to the transaction for long term objective such as the purchase of a fixed asset.
4. What is the meaning of working capital?
Working capital refers to the value of current assets minus current liabilities that are used in day-to-day trading.
5. What is the meaning of premises in terms of accounting?
In terms of accounting, the word premises refer to the number of fixed assets that are shown in the balance sheet.
6. What is VAT?
VAT stands for value added tax. It is a type of consumption tax placed on a product’s sales price. It stands for the price of ‘value added’ on the product in its production stage.
Note: In India, VAT has been replaced by GST (Goods and Services Tax) since 1st July 2017, but VAT is still used in several other countries.
Read more: Accounting Manager Roles and Responsibilities
7. What is the basic accounting equation?
Accounting is all about measuring the assets, capital, and liabilities of a business. Therefore, the basic accounting equation is:
Assets = Liabilities + Owners Equity
8. How are accounting and auditing different?
Accounting and auditing are two different terms. Accounting means recording the daily financial activities of a business, whereas, auditing is checking whether these events are noted correctly or not.
9. What is retail banking?
Retail banking means carrying out financial transactions with a retail client and not any other business or organizational customers.
10. What are trade bills?
Trade bills are simply the documents generated against each transaction.
11. What is double entry bookkeeping and what are its rules?
Double entry bookkeeping follows the principle by which every debit has a corresponding credit due to which the value of the debit is equal to the total of all credits. This simply means that when one account is debited at the same time another account is credited by the similar account.
Rules followed
- In the case of personal account: debit the receiver and credit the giver
- In the case of real account: debit is what comes in and credit is what goes out
- In the case of nominal account: debit all the expenses and credit all the incomes
Read more: Accounting Manager Interview Questions
12. What is debit and credit note?
Debit note is nothing but an intimation note sent to an individual dealing with the business stating that his account will be debited for the purpose indicated therein. Whereas, credit note is an intimation note sent to an individual dealing with the business stating that his account will be credited for the purpose indicated therein.
13. Can you name the different branches of accounting?
Different branches of accounting are:
- Financial accounting
- Management accounting
- Cost accounting
14. What does the term dual aspect mean in terms of accounting?
The term dual aspect means every transaction that you carry out has two aspects, i.e., it affects two accounts in their respective opposite sides. For example, to make a purchase, you have to give cash in exchange for the product or service you avail and when you sell something you get the money in exchange for the sale you make. So in short, losing and receiving money are the two aspects of a financial transaction. Therefore, the transaction should be recorded in two places.
The concept of duality in terms of fundamental accounting equation is:
Assets = Liabilities + Capital
15. Name the accounting events that are a part of compound entries?
A compound journal entry is an accounting entry in which there is more than one debit, more than one credit, or more than one of both debits and credits. Accounting events that generally involve compound journal entries are:
- Different expenses related to diverse line items in a supplier invoice
- Payroll related deduction and payments
- Overall bank deductions related to bank reconciliation
- Customer invoice related financial receivable and sales tax
16. What is inactive and dormant account?
Inactive accounts are the accounts that are closed and will not be used anytime in the future. Dormant accounts are accounts that are not functional but can be used in the future.
17. What are fictitious assets?
Fictitious assets are assets that cannot be shown or touched, but can only be felt such as rights, good will, etc.
18. What is the meaning of the general ledger account?
The general ledger is a type of account that a company maintains for recording information of a specific type of transaction such as assets, liabilities, gains, losses, equities, etc. In short, these accounts are maintained for recording all type of transactions that are aggregated in the income statement and balance sheet.
19. What are balance sheet accounts?
Known as permanent accounts, balance sheet accounts are type of accounts in which the balance is not closed in the end of financial year and is carried forward to the next accounting year.
20. What is marginal cost?
Marginal cost is the estimated cost of additional inputs that are required to produce the output. The cost is calculated by dividing the total cost change by the difference in product output. This simply states the increase and decrease in the total cost of the product due to the production of one extra unit in the product.
21. What is the meaning of the term overhead in accounting?
In terms of accounting, overhead means the value of indirect expenditures of a company i.e. the rent dues, salaries, etc.
22. How many accounting standards are there in India and are you familiar with each?
Possible answer:
There are 41 notified Indian Accounting Standards (Ind AS) in India, issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA). These standards are largely converged with IFRS.
23. What does deferred tax liability stand for?
It stands for the fact that a company will be required to pay more tax in the future due to its transactions in the current period.
24. What are the accounting applications you have used?
Possible answer 1:
I have experience in using Tally, Zoho Books, QuickBooks Online, SAP Business One, and Microsoft Accounting Professional, which are widely used by businesses today.
Possible answer 2:
To improve accuracy and simplify the process, I have previously worked on software such as Tally, Zoho Books, Microsoft Accounting Professional, and QuickBooks, among others.
25. What is GST?
It is Goods and Services Tax (GST), a type of indirect tax that is charged by the seller to the customer on the value of goods or services availed. GST was implemented in India on 1st July 2017 and replaced all the earlier indirect taxes. GST compliance is now fully integrated with e-invoicing and invoice reconciliation through the GSTN portal, which has made the process more transparent and automated.
Read more: Accounts Payable Interview Questions
26. What is bank reconciliation?
It is a process done by companies to ensure that their records i.e. the balance sheet, general ledger account details, etc. are in accordance with the bank's records.
27. What are different financial constraints that can have an impact on the company's financial statements?
Some examples of financial constraints are:
- Zero balance between benefits and costs incurred
- Qualitative characteristics having no or zero balance
- Having no clarity between true and fair view presentation
- Too much of delay leading to irrelevant information
28. What is the meaning of GAAP?
GAAP stands for Generally Accepted Accounting Principles that are issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act. These are general accounting standards followed by companies to summarize their records into financial statements accurately.
Note: In India, Ind AS (Indian Accounting Standards) are largely converged with IFRS, but GAAP continues to form the conceptual foundation of financial reporting.
29. In your view, what are the concepts/terms that an accountant should have good knowledge of?
Possible answer:
An accountant should have good knowledge of the following:
- Analyzing and reporting financial data
- Budget planning
- Account management
- Basic accounting principles and practices
- Knowledge of financial rules and regulations
- Knowledge of various accounting software's
30. What is cost objective and why is it done?
Cost objective is the process of recording all the cost incurred by the company in running the usual business. This is done to ascertain the cost of loss and profit ratio of the company and to find ways to control the cost.
31. What is a liability account?
It is a general ledger account of a company that records its obligations, debt, customer prepayments, deferred income taxes, etc. that are a result of the past transactions done by the company.
Read more: Career Objectives for Accountants
Accounting HR Interview Questions and Answers
Here are the most commonly asked HR interview questions for accounting roles to assess your personality and communication skills.
32. How do you ensure your work is error free?
Possible answer:
When I am in an extremely difficult situation, I am always open to ask for suggestions from my team members. I have a habit of reviewing everything before I send out the files on email or show it to my seniors. I make use of software as well as calculators to ensure I am doing the task correctly.
33. What drew you to choose accountancy as a profession?
You might also come across personal accounting interview questions like this one.
Possible answer 1:
Accountants are in great demand with opportunities across all sectors and industries, and even in different parts of the world. I feel it is a very challenging yet exciting job profile. Moreover, I have always been interested in numbers and problem-solving tasks.
Possible answer 2:
Accountancy is not just about numbers; it also helps an individual develop his communication, leadership and problem-solving skills. It highly satisfies me as I do not just learn things on a professional level, but also on a personal level.
34. Why should we hire you?
Possible answer 1:
The position that you are hiring for suits me the best. I am sure that with the skills that I bring to the table, I would help the company grow as I have a proven track record of managing the company’s finances effectively.
Read more: Popular Accounting Skills You Should Learn Now
Possible answer 2:
I possess the required qualification and skills for this job. I am a pro with numbers and accounting software. I also have good analytical skills, besides being good at mathematics, which I believe are important for an accountant.
Check out detailed article on How to answer 'Why should I hire you?'
35. Do you prefer to work alone or as a team?
Here is a tricky accounting interview question you might be asked.
Possible answer 1:
I like working in a team as I think two minds can do the job in a better way than one. I also like brainstorming and collaborating with my colleagues.
Possible answer 2:
I really enjoy collaborating with a team and brainstorming ideas, but I can work independently too to get things done. For the most part, I do prefer working alone as I think it helps me work faster and meet the deadlines.
Read more: What Is an Accountant’s Salary in India?
36. Do you have any questions for us?
You can ask general questions about the company culture or specific questions related to your profile. Some of the sample questions to ask:
- Which accounting software is used in the company?
- What are the main projects the team is working on currently?
- What are the existing challenges of the accounts department?
- How often are the financial review meetings conducted?
- What are the next steps in the interviewing process?
Check out some more questions to ask in an interview.
Tips for answering accounting interview questions
Let us take a look at some important tips to answer accounting interview questions.
- Accounting standards: Before the interview, ensure you are aware of all the basic accounting standards as knowing them is a basic requirement that a company has even when recruiting a fresher.
- Accounting software: Today all the companies, big or small, make use of accounting software for a speedy and reliable process. Hence, it is important that you are well aware of how to use various accounting applications.
- Narrate your experience: Utilize stories or your previous work experience to tell the employer about how you have helped your previous company reduce costs or gone out of your way to advise the management.
- Be well prepared: Apart from preparing for the common interview questions, do some company research and read the job description carefully to understand if you meet the basic requirement of the tasks/skills required to get hired by the company.
- Comprehension: Listen to all the questions carefully before answering. Don’t jump on to answering before actually understanding what the recruiter is trying to question you on.
- Stay updated: Stay updated with the latest changes in Ind AS and GST compliance, including e-invoicing rules and automation tools used in accounting.
For further details, check out this article on interview preparation.
Popular accounting books to read
Here are some popular accounting books you can read to simplify complex concepts and prepare for interview questions.
- Accounting Made Simple by Mike Piper
- Warren Buffet Accounting Book
- Financial Statements by Thomas Ittelson
- Accounting Cheat Sheet by John Gillingham
- Guide to Indian Accounting Standards by B.D. Chatterjee
Popular accounting blogs to follow
These are the popular accounting blogs that share the latest updates and practical guides to help accountants stay informed.
- Jagoinvestor
- Chartered Club
- Accounting Coach
- Tax Guru
- Apna Plan
FAQs
Q1: What type of questions are asked for an accountant interview?
A: In an accountant interview, you might be asked different types of questions. Some questions might be about your experience, such as "Can you tell us about your previous accounting jobs?" Other questions might be about your skills, like "How do you handle financial reports?" They might also ask you about your knowledge of accounting principles, such as "Can you explain the difference between accrual and cash accounting?" Additionally, they might ask about your problem-solving abilities, like "How would you handle a discrepancy in the financial records?"
Q2: What are the basic fundamentals of accounting?
A: Accounting is all about keeping track of money. It helps businesses know how much money they have and where it's going. There are a few basic things to know:
- Income: This is the money a business makes from selling goods or services.
- Expenses: These are the costs a business has, like buying supplies or paying employees.
- Assets: These are things a business owns that have value, like cash, equipment, or buildings.
- Liabilities: These are things a business owes money for, like loans or bills.
- Equity: This is the difference between a business's assets and liabilities. It's like the owner's share of the business.
Q3: What are types of accounting?
A: There are three main types of accounting:
Financial accounting: This type of accounting focuses on recording and reporting financial transactions for external stakeholders, such as investors, creditors, and government agencies. It includes preparing financial statements like income statements, balance sheets, and cash flow statements
Management accounting: Management accounting is used by businesses to help internal management make decisions. It involves analyzing financial data to provide insights and recommendations for improving performance, controlling costs, and making strategic decisions.
Tax accounting: Tax accounting deals with preparing and filing tax returns for individuals, businesses, and other entities. Tax accountants ensure compliance with tax laws and regulations while minimizing tax liabilities through deductions, credits, and other strategies.
Q4: What are common accounting interview questions?
A: Common accounting interview questions usually cover both technical knowledge and practical skills. Recruiters often ask about your understanding of accounting concepts, your experience with financial reporting, and your familiarity with software tools. Some examples include:
- What are the three main financial statements and how are they connected?
- Explain the difference between capital and revenue expenditure.
- What is double-entry accounting and why is it important?
- How do you perform bank reconciliation?
- What accounting software have you used?
Q5: What are basic accounting questions?
A: Basic accounting questions focus on fundamental concepts and principles that form the foundation of bookkeeping and financial reporting. Common examples include:
- What is the basic accounting equation?
- What are assets and liabilities?
- What is the difference between cash and accrual accounting?
- Define debit and credit.
- What is a balance sheet?
Q6: Are accounting-related interview questions difficult?
A: Not really. Most accounting-related interview questions cover basic concepts and simple practical scenarios. With good preparation and a clear understanding of fundamentals, you can answer them confidently and perform well in the interview.
