R2R(Record to report) is a Finance and Accounting management process. It requires gathering, processing, and porting timely and exact info to give planned, financial, and working feedback. It is only to understand how a business works.
R2R also has plans for making up and reporting all accounts. Usually kept in general or book and controlled by a controller. The steps are as follows:
- Data collection.
- Data extraction.
- Data verification.
- Change of data.
- Posting of vouchers.
- Voucher storage in a de-normalized and compressed format.
Let's look into some good questions for the topic r2r process interview questions.
R2R Process Interview Questions for Freshers
1. What is the R2R process?
Answer - R2R is a finance and accounting management process that needs meeting, working, and giving good and exact financial data. R2R posts planned, economical, and working feedback on the company works to management and other partners.
2. What is amortization?
Answer - Amortization is only tried to abstract aid. On the other hand, depreciation is used for real assistance. Amortization is the value decline caused by the distribution and a non-real aid cost over various accounting periods.
For example, suppose a small business, a fake Company. They Spend 500,000 on R&D. And expect to continue it for five years. In that case, it may elect to amortize. This display $100,000 in the yearly statements for five years.
3. What are the three different kinds of accounts?
Answer - If you don't want to sound wrong and much different from the crowd, clarify your answer briefly and clearly (one line about each is ideal).
Following are the three types of accounts.
- Real - Real accounts include all assets in a business, whether real or non-real.
- Personal - Personal accounts are tied to a person, entity, or legal body.
- Nominal- This category includes all costs and losses or income and gains accounts
4. What are the three most important financial statements?
Answer - The three financial statements are income, balance sheet, and cash flow.
- Income Statement: It is under revenue, income, profit, and loss for an accounting period.
- Balance sheet: It would display a company's current assets, duty, and capital situation.
- Cash Flow Statement: This statement checks a company's cash and cash-like flows during an accounting period.
5. What is the journal entry for donated goods?
Answer - When a company decides to donate items to charity, it must account for those donations in the formal financial statements. In this situation, buying is decreased by the correct cost of things.
6. What is the free samples journal entry?
Answer - When a company wants to promote a new product or line of products. It may decide to give away free samples to consumers. In this situation, the purchase account is added. Then, the advertisement account is in debt.
7. What is Executive Accounting?
Answer - Executive Accounting is planned mainly for service-based companies. Executive accountants are in charge of properly planning a yearly cost of a company. The executive accountant checks each department's budget, considering the company's overall financial objectives, before impacting the company.
8. What are the receivables?
Answer - Bills receivable are the earnings or payments a supplier or company receives from its clients. Any time a company is a due money for goods or services that have been supplied but have not yet been paid for, a receivable is formed. This might result from a sale to a consumer using shop money, a monthly payment due after receiving the goods or services, or a monthly payment plan.
9. What is working capital?
Answer - Working capital is the money used to cover all of the short-term costs of the company, which are for one year.
It is different from other companies' benefits and current debt. Working capital pays the short-term debt, purchases inventory, and daily operating expenses.
10. What are Retain Earnings?
Answer - Retained earnings are a company's net earnings or profits after dividend payments. The term "retained" conveys that those earnings were not paid out to investors as dividends but kept by the company as an important accounting term.
As a result, retained earnings fall when a company loses money or pays dividends and rise when new profits are generated.
R2R Process Interview Questions for Intermediate
11. What is the difference between Reserves and Provisions?
Reserves | Provisions |
| Reserves are created to support a company's financial position and to cover unknown charges or losses. | Provisions cover the particular debt, such as a provision for doubtful debts. |
| Reserves are created when the company is profitable. | Provisions are made in any case, whether a company makes profits or losses. |
| They can also be used to pay dividends to shareholders. | Since they are planned for specific debt, they cannot be used to distribute dividends. |
| They are made by deducting funds. The P&L Appropriation Account. | They are formed by debiting the profit and loss account. |
| Creating reserves for the firm is not required, it is done mainly for caution. | It is legally required to make provisions. |
| Reserves are recorded on a balance sheet's liability side. | Provisions are either displayed on a balance sheet's liabilities or deductions from the asset in question. |
12. Suggest improving the company's working capital flow.
Answer - Stocks can be the key to increasing the company's working money. We have complete control over the stock part of the working money. We can put pressure on our creditors to pay us immediately.
- Still, we don't directly impact them because they are independent legal bodies, and they are the ones who give us business in the last.
- We may be open to delaying supplier payments, but this destroys business relationships and weakens industry goodwill.
- In addition, if we delay payments, they may refuse to enhance things in the future.
- Maintaining funds in bank cash may help the flow of working capital, but it comes at an opportunity cost.
- With this in mind, inventory management can help increase the company's working capital.
- With all of this in focus, it can be believed that goods management can seriously help advance the company's working capital. Overstocking should be prevented, and list turnover should be high.
- Electronic commerce, telecommunications, and other businesses operate with negative working funds. So, before responding, conduct some research on working funds.
13. What is GAAP?
Answer - GAAP's full form is Generally Accepted Accounting Principles. For the Institute of Chartered Accountants of India and the rules of the Companies Act, 1956.
It is a collection of accounting levels and common industry terms companies use to
- Maintain correct financial data.
- Summarize accounting data into financial statements.
- Whenever it is required necessary, reveal information.
14. What is a Contra Account?
Answer - It's an account employed to reduce or balance the value of a related account. In the case of a specific kind of account, it holds the opposing sign.
A credit balance will exist in a contra account if an account has a debit balance (such as an asset account). In contrast, a liability account is correct.
15. What are Contingent Liabilities?
Answer - Contingent liabilities are debts that a company may or may not suffer, depending on the outcome of a future event. The happening of this type of duty is entirely dependent on the events of a likely future event.
Assume Dell begins a patent violation action against Asus, and Asus not only know that it may be required to pay for violations but also evaluate the overall amount. In this situation, Asus will record the expected amount as a Contingent Liability in their records.
16. What are Accruals?
Answer - Accruals are another often sent issue in the finance and accounting interview questions list. They are costs or earnings that were suffered or generated but were not recorded in the books of accounts. Adjustment notes are included in the financial statements to reveal after an accounting time period.
- Accrued expense is a cost that has been suffered but has not been recorded in the books of accounts. As financial statements, it is required to have an adjustment entry in the books of accounts.
- Accrued revenue is the income that has been earned but is not yet recorded in the books of accounts. An adapting entry, similar to arising cost, will also be necessary for this plan.
17. Define the term 'Depreciation.'
Answer - These are the most common accounting interview question. You might state that depreciation refers to the declining value of any asset in use. Calculating a company's net income in each accounting period is required.
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