Top Accounting Interview Questions (With PDF) - Accounting Capital (2023)

Finance and Accounting Interview Questions (FAQs)

We have a collection of top finance and accounting interview questions compiled with real-life experiences and research with working professionals. They are a must-read for all job seekers especially freshers and intermediate level candidates with an experience range of 0-4 years.

These finance and accounting interview questions can also act as a great refresher for someone trying to brush up on their accounting fundamentals. Bonus PDF at the end of this article!

Our research involved over 100 aspirants who went through a technical or written interview in companies such as EY, KPMG, Deloitte, PWC, Grant Thornton, Ameriprise Financial, American Express, FIS, Fluor Corporation, Genpact, Bechtel, Citigroup, Accenture, Agilent, UHG, UBS, Bank of America, HCL, Sapient, Blackstone, HSBC, FIS, WNS, AXA XL, BT, Boston Consulting Group, Royal Bank of Scotland, Whirlpool, GE, EXL, BlackRock, etc.

1. What are the three Golden Rules of Accounting?

First things first this is the most basic yet the easiest one to be taken for granted, know this well.

In bookkeeping, three golden rules of accounting are,

Personal Account – Debit the receiver, Credit the giver

Real Account – Debit what comes in, Credit what goes out

Nominal Account – Debit all expenses & losses, Credit all incomes & gains

Understand this with examples hereThree Golden Rules of Accounting with examples

2. What are the three main types of accounts?

They are Real, PersonalandNominal but wait… if don’t want to sound artificial and stand out from the crowd then make sure you are explaining your answer in brief (one line about each is ideal)

Real – All assets in business either tangible or intangible classify as real accounts.

Personal – Accounts related to a person, entity or any legal body, etc. are called personal accounts.

Nominal – All accounts related to expenses & losses or incomes & gains fall under this category.

3. Why is Depreciation not Charged on Land?

Oh! this is a classic and one that fascinates the operations manager more than often. There is no scope for leaving this one out from any list of finance and accounting interview questions.

The reason why you will never see depreciation being charged on land is that land has an infinite useful life. Without knowing how many years a fixed asset will last depreciation cannot be charged.

The formula to calculate straight-line depreciation is (Cost of Fixed Asset – Scrap Value)/Useful life and you don’t have a number to fill the denominator here.

4. What is Amortization?

Amortization is only done for Intangible assets, unlike depreciation which is for tangible assets. Reduction in value by prorating the cost of an intangible asset over multiple accounting periods is called amortization.

Example – A small-sized technology company Unreal Corp. spends 500,000 on R&D which is expected to sustain for 5 years so it may decide to amortize this & show 1,00,000 each year for 5 years in the financial statements.

If you may wish to deep dive into the topic here is our detailed article on Amortization with an example

(Video) TOP 20 ACCOUNTANT Interview Questions And Answers!

5. Why is Closing Stock not Shown in Trial Balance?

Not all goods purchased in beginning & during the accounting period are sold until the end of that period, this results in a remainder balance known as closing stock.

Closing stock is a part of purchases & trial balancealready includes purchases, henceif the closing stock is shown as a separate item it will double count and result in an error.

Example – Purchases for a period = 60,000, Closing Stock (remainder out of purchases) = 10,000, if both of these items are separately shown inside trial balance the effect will double up & trial balance will error out.

This one also stands tall among top finance and accounting interview questions asked in technical rounds by hiring managers.

6. What are the three main Financial Statements?

This is another very common question asked in finance andaccounting interviews, especially with entry-level roles. Three main financial statements are Income Statement, Balance Sheet, and Cash Flow Statement.

Again, follow the i.e. to add one brief statement to each one of them, but don’t over-talk it will only make you vulnerable to more questions.

Income Statement – It presents a summarized view of revenue, income, profit, and loss of a particular accounting period.

Balance Sheet – B/S would show them as on date assets, liabilities & capital position of a business.

Cash Flow Statement – It shows the movement of cash and cash equivalents for a business during an accounting period.

Learn more on Three Main Financial Statements, Details and their Format

7. What is Capital, type of account & where is it shown in the financial statements?

Also called net worth or owner’s equity, capital is the money brought in by the owner of the business as an investment to start the operations. Capital is a Personal Accountas it belongs to an individual or a firm (owner).

Capital is shown on the liability side of a balance sheet.

Here is our detailed article onCapital along with its Journal Entry here.

8. What are Fictitious Assets?

Bind this to your memory fictitious assets are not assetsthey are fake or deceptive they are actually expenses & losses which for some reason couldn’t be written off during the accounting period incurred. They are written off in multiple future accounting periods.

Examples – Preliminary expenses, promotional expenses of a business, discount allowed on the issue of shares, the loss incurred on issue of debentures, etc.

Fictitious assets are shown in the balance sheet on the asset side.

9. What is the Journal Entry for Goods Given in Charity?

When a business decides to give goods in charity it also needs to account for those goods in the appropriate financial statement(s), in this case, purchases are reduced with the exact cost of goods donated.

Journal entry

(Video) 3 most frequently asked accounting interview questions

10. What is the Journal Entry for Free Samples?

When a business wants to advertise a new product or a new line of products it may decide to distribute free samples to the customer. In this case purchase, a/c is credited and advertisement a/c is debited.

Journal entry

11. What is Depreciation, different types of depreciation & its journal entry?

The reduction in the value of a tangible fixed asset due to normal usage, wear and tear, new technology or unfavourable market conditions is called Depreciation.

Journal entry

Types of Depreciation

  • Straight Line Method
  • Diminishing Value Method
  • Annuity method
  • Machine hour rate method
  • Revaluation method
  • Sum-of-the-years’ digit method

Read more on Depreciation with examples along with types of depreciation

12. What are Contingent Liabilities?

Contingent liabilities are those liabilities that may or may not be incurred by a business depending on the outcome of a future event.The existence of this kind of liability is completely dependent on the occurrence of aprobableevent in future.

Example – Let’s suppose that Apple files a case of a patent violation on Samsung and Samsung not only realizes that it may have to pay for violations but also estimates how much in total. In this case, Samsung will record the estimated amount in their books of accounts as a Contingent Liability.

13. What is the difference between Reserves and Provisions?

14. What are Accruals?

Another very frequently discussed topic in the list of finance and accounting interview questions is accruals. Theyare expenses and revenues that have been incurred or earned but have not been recorded in the books of accounts.Adjustmententries are incorporated in the financial statements to report these at the end of an accounting period.

Accrued Expense is an expense that has been incurred, buthas not been recorded in the books of accounts presently. It will require an adjustment entry in the books of accounts to reflect this in the financial statements.

Accrued Income is an income that has been earned, but has not been recorded in the books of accounts presently. Similar to accrued expenses, an adjustment entry will be required in this case too.

There is some more explanation on Accruals along with a couple of examples here.

15. What is a Contra Account?

It is an account that is used to reduce or offset the value of an associated account. It holds the opposite sign for a particular type of account.

If an account has a debit balance (e.g for an Asset a/c), then there will be a credit balance in its contra account. The opposite is true for a liability account.

Example for contra accounts

(Video) Capital IQ Finance & Accounting Interview Questions & Answers 1 10

Read more on Contra Account with more details and examples.

16. What are Drawings, what type of account is it & its journal entry?

When a proprietor withdraws cash or goods from its own business for personal use it is termed as drawings. It reduces capital invested and is a temporary account that is cleared at the end of each accounting period.

“Drawings” is a Personal Account & is shown on the liability side of a balance sheet.

Journal entry for cash withdrawn

Journal entry for goods withdrawn

17. What is a Bank Reconciliation Statement & why is it prepared?

Almost all compilations of finance and accounting interview questions include at least one question on BRS, this topic is deemed important.

Bank Reconciliation Statement or BRSrefers to a statement that is made to reconcile the bank balance shown onthe bank statement or passbook with the bank balance shown in the cash book.

Both internal source(s) i.e. the cash book and external source(s) i.e. the bank statement/passbook are reconciled with each other, then all the mismatches are identified and properly recorded.

Reasons for preparing a BRS

More on Bank Reconciliation Statement and reasons to prepare a BRS

18. What is Deferred Revenue Expenditure?

Another one among the list of commonly asked finance and accounting interview questions is Deferred Revenue Expenditure. It is an expenditure that is revenue in nature and incurred during an accounting period, but its benefits are to be derived from a number of following accounting periods.

The part of the amount which is charged to the profit and loss account in the current accounting period is reduced from the total expenditure and the rest is shown on the balance sheet as an asset.

Example – A small business spends1,50,000 on advertising which is unusually large for them. The benefits from it are expected to be derived over 3 years so the company decides to divide the expense over 3 yearly payments of 50K. This type of expense is amortized.

19. What is the difference between Trade Discount & Cash Discount?

20. What is a Credit Note and Debit Note?

Be ready for this question in accounting interviews for roles related to Accounts Payable and Accounts Receivable.

(Video) Top 250 Accounting Interview Questions with Answers…..

Debit Note – When abuyer returns goodsto the seller, he sends a debit note as an intimation to the seller of the amount and quantity being returned and requesting the return of money.

Credit Note –When a sellerreceivesgoods(returned)from the buyer, he prepares and sends a credit note as an intimation to the buyer showing that the money for the related goods is being returned in the form of a credit note.

21. Additional 20 Finance and Accounting Interview Questions in our eBook

Top Accounting Interview Questions (With PDF) - Accounting Capital (13)

Top Accounting Interview Questions (With PDF) - Accounting Capital (14)

Get Full Version of eBook with 40 Question & Answers

The first of our two-book series “Golden Book of Accounting and Finance Interviews – Part I” contains 20 additional finance and accounting interview questions including the ones in the above article. Our eBook is a great resource for every job seeker.

*As this eBook requires an update every year, it is no longer free and comes at a very nominal price of INR 99.

>Read 11 Tips to Follow for Freshers Before an Accounting Interview

>Read Compilation Journal Entries

10 Free Accounting Quiz (with answers)

(Video) Accountant/Accounting Interview Questions And Answers For Freshers/Experienced | 2020


What questions will be asked in an accounting interview? ›

Table of contents
  • Why do you want to do accountancy?
  • Are you able to convey technical information to someone of more or less technical ability? Please give an example.
  • What are your strengths and weaknesses?
  • Can you give examples of when you've helped a team be successful?
  • Why do you want to work for this firm?

What are the 10 most common interview questions and answers? ›

10 most common interview questions and answers
  • Tell me about yourself.
  • What attracted you to our company?
  • Tell me about your strengths.
  • Tell me about your strengths.
  • Where do you see yourself in five years?
  • Tell me about a time where you encountered a business challenge?

What are the questions in financial accounting? ›

Financial Accounting (Q&A)
  • What is the accrual basis of accounting?
  • What is the distinction between debtor and creditor?
  • What is accounting?
  • Where do dividends appear on the financial statements?
  • What is a contingent liability?
  • What is principles of accounting?
  • What are accrued expenses and when are they recorded?

What are the 3 types of accounts? ›

3 Different types of accounts in accounting are Real, Personal and Nominal Account. Real account is then classified in two subcategories – Intangible real account, Tangible real account. Also, three different sub-types of Personal account are Natural, Representative and Artificial.

What are 15 good interview questions? ›

15 tricky job interview questions — and how to nail them
  • Can you tell me a little about yourself?
  • How did you hear about the position?
  • What do you know about the company?
  • What are your greatest professional strengths?
  • What do you consider to be your weaknesses?
  • What is your greatest professional achievement?

What are the 3 financial statements? ›

The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.

What are basic accounting principles? ›

Some of the most fundamental accounting principles include the following:
  • Accrual principle.
  • Conservatism principle.
  • Consistency principle.
  • Cost principle.
  • Economic entity principle.
  • Full disclosure principle.
  • Going concern principle.
  • Matching principle.

What is debit and credit? ›

What are debits and credits? In a nutshell: debits (dr) record all of the money flowing into an account, while credits (cr) record all of the money flowing out of an account. What does that mean? Most businesses these days use the double-entry method for their accounting.

Why is TDS an asset? ›

TDS refers to Tax which has been deducted from the salaries of employees or payments made to contractors or others, TDS will be shown as an Asset since it now needs to be remitted to the Tax department within the specified period.

What are journal entries? ›

What is a Journal Entry? A journal entry is used to record a business transaction in the accounting records of a business. A journal entry is usually recorded in the general ledger; alternatively, it may be recorded in a subsidiary ledger that is then summarized and rolled forward into the general ledger.

What is accounting cycle? ›

The accounting cycle is the process of accepting, recording, sorting, and crediting payments made and received within a business during a particular accounting period.

What are the 4 principles of GAAP? ›

What Are The 4 GAAP Principles?
  • The Cost Principle. The first principle of GAAP is 'cost'. ...
  • The Revenues Principle. The second principle of GAAP is 'revenues'. ...
  • The Matching Principle. The third principle of GAAP is 'matching'. ...
  • The Disclosure Principle. ...
  • Why are GAAP Principles important?
10 Sept 2021

What are the 5 accounting concepts? ›

: Business Entity, Money Measurement, Going Concern, Accounting Period, Cost Concept, Duality Aspect concept, Realisation Concept, Accrual Concept and Matching Concept.

Which type of account is a capital account? ›

In accounting, a capital account is a general ledger account that is used to record the owners' contributed capital and retained earnings—the cumulative amount of a company's earnings since it was formed, minus the cumulative dividends paid to the shareholders.

What is a debit entry? ›

Debit means an entry recorded for a payment made or owed. A debit entry is usually made on the left side of a ledger account. So, when a transaction occurs in a double entry system, one account is debited while another account is credited.

Why capital account is credited? ›

A debit to a capital account means the business doesn't owe so much to its owners (i.e. reduces the business's capital), and a credit to a capital account means the business owes more to its owners (i.e. increases the business's capital).

What are 50 common interview questions and answers? ›

50+ most common job interview questions
  • Tell me about yourself.
  • Walk me through your resume.
  • How did you hear about this position?
  • Why do you want to work at this company?
  • Why do you want this job?
  • Why should we hire you?
  • What can you bring to the company?
  • What are your greatest strengths?

How do I prepare for a 2022 interview? ›

Here are the most important interview skills to focus on and how to make sure you project professionalism and expertise in your field.
  1. Interview preparation.
  2. Know the company.
  3. Speaking skills (clear, cohesive, calm)
  4. Think first, speak second.
  5. Listening.
  6. Show interest, not desperation.
  7. Show gratitude.

What are the 5 Star interview questions? ›

The most common questions are:
  • Tell me about a time when you were faced with a challenging situation. ...
  • Do you usually set goals at work? ...
  • Give me an example of a time you made a mistake at work.
  • Have you ever faced conflict with a coworker? ...
  • Tell me about a time when you handled the pressure well.

What are the top 100 interview questions? ›

Basic Interview Questions:
  • Tell me about yourself.
  • What are your strengths?
  • What are your weaknesses?
  • Why do you want this job?
  • Where would you like to be in your career five years from now?
  • What's your ideal company?
  • What attracted you to this company?
  • Why should we hire you?

What are the top 20 interview questions? ›

20 Most Common Interview Questions & How to Answer Them
  • Tell me about yourself.
  • What are your weaknesses?
  • Why should we choose you for this job?
  • What are your hobbies outside of work?
  • Where do you see yourself in five years' time?
  • Why are you leaving your current position?
  • What are your main strengths?
17 Jan 2018

What are some unique interview questions? ›

If you were interviewing me for my job, what would you want to know about me? If you had an unlimited budget, what innovation would you want to create in our industry? How could AI potentially change our industry? What do you think our industry is going to look like in 10 years?

Why trial balance is not balance? ›

The totals of debits and credits for all accounts must be equal to help confirm the accuracy of the data in the general ledger and a trial balance will not balance if a transaction isn't entered correctly in both a single debit and credit account.

What is in the trial balance? ›

A trial balance is a report that lists the balances of all general ledger accounts of a company at a certain point in time. The accounts reflected on a trial balance are related to all major accounting items, including assets, liabilities, equity, revenues, expenses, gains, and losses.

What are the 5 types of financial statements PDF? ›

The usual order of financial statements is as follows:
  • Income statement.
  • Cash flow statement.
  • Statement of changes in equity.
  • Balance sheet.
  • Note to financial statements.

What is GAAP in accounting PDF? ›

Generally accepted accounting principles (GAAP) are the uniform standards and guidelines for financial accounting and. reporting which govern the form and content of the financial statements of an entity. Hierarchy of Government GAAP.

What are the 11 concepts of accounting? ›

11 important concepts in accounting
  • Business entity concept. ...
  • Going concern concept. ...
  • Money measurement concept. ...
  • Accounting period concept. ...
  • Accrual concept. ...
  • Revenue realisation concept. ...
  • Full disclosure concept. ...
  • Dual aspect concept.
20 May 2022

What is GAAP and its principles? ›

Generally accepted accounting principles, or GAAP, are standards that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices.

What is the T account? ›

A T-account is an informal term for a set of financial records that use double-entry bookkeeping. It is called a T-account because the bookkeeping entries are laid out in a way that resembles a T-shape. The account title appears just above the T.

Is cash an asset? ›

Personal assets are things of present or future value owned by an individual or household. Common examples of personal assets include: Cash and cash equivalents, certificates of deposit, checking, and savings accounts, money market accounts, physical cash, Treasury bills.

What is real account? ›

A real account is an account that retains and rolls forward its ending balance at the end of the year. These amounts then become the beginning balances in the next period. The areas in the balance sheet in which real accounts are found are assets, liabilities, and equity.

Who will deduct TDS? ›

The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.

What is TDS journal entry? ›

TDS means tax deducted at source. If tax is deducted from assessee's income and deposited in the Govt. account, its journal entries will be in the books of company. For example ABC company used the service of MR. N person.

What is TDS cut salary? ›

Rate of TDS Deduction

The TDS to be deducted by dividing the estimated tax liability of the employee for the financial year by the number of months of his employment under the particular employer. However, if there is no PAN of employee, TDS shall be deducted at the rate of 20% plus 4% cess.

What are the 3 journal entries? ›

There are three main types of journal entries: compound, adjusting, and reversing.

What is a ledger in accounting? ›

An accounting ledger is an account or record used to store bookkeeping entries for balance-sheet and income-statement transactions. Accounting ledger journal entries can include accounts like cash, accounts receivable, investments, inventory, accounts payable, accrued expenses, and customer deposits.

What is journal called? ›

Journal is called a subsidiary book. Journal is known as the books of original Entry or Books of prime entry. The transactions are recorded in the journal in chronological order. With the help of a journal, ledger accounts are prepared.

What is the 4 phases of accounting? ›

First Four Steps in the Accounting Cycle. The first four steps in the accounting cycle are (1) identify and analyze transactions, (2) record transactions to a journal, (3) post journal information to a ledger, and (4) prepare an unadjusted trial balance.

What are the 5 major transaction cycles? ›

The Transaction Cycle model is one way to view basic business processes. The purpose of The AIS Transaction Cycles Game is to provide drill and practice or review of the elements that comprise the five typical transaction cycles identified as: revenue, expenditure, production, human resources/payroll, and financing.

What is a petty cash book? ›

Petty Cash Book is used for recording payment of petty expenses, which are of smaller denominations like postage, stationery, conveyance, refreshment, etc. Person who maintains petty cash book is known as petty cashier and these small expenses are termed as petty expenses.

Why should we hire you in accounting? ›

You should hire me as an accountant simply because I am a great person to have around. Always attentive to the needs and feelings of people around me, and bringing enthusiasm and positive attitude to any workplace, just having me around will help the productivity of the entire team.

What are the basics of accounting? ›

The 3 fundamental concepts of accounting are:
  • Accruals concept. The accruals concept states that revenues can be recognised only when they are earned, and expenses, when assets are used. ...
  • Going concern concept. ...
  • Economic entity concept. ...
  • Records. ...
  • Transactions. ...
  • Financial statements. ...
  • Revenue principle. ...
  • Expense principle.
14 Jul 2021

How do you introduce yourself in an accounting interview? ›

The key point to a self-introduction for an accounting interview is to be precise about the strengths and achievements you mention. Give examples of what sets you apart from the other candidates. You can start with: your work experience, skills sets, key strength, and then finish with your career objective.

What are the 4 principles of GAAP? ›

What Are The 4 GAAP Principles?
  • The Cost Principle. The first principle of GAAP is 'cost'. ...
  • The Revenues Principle. The second principle of GAAP is 'revenues'. ...
  • The Matching Principle. The third principle of GAAP is 'matching'. ...
  • The Disclosure Principle. ...
  • Why are GAAP Principles important?
10 Sept 2021

What is GAAP in accounting PDF? ›

Generally accepted accounting principles (GAAP) are the uniform standards and guidelines for financial accounting and. reporting which govern the form and content of the financial statements of an entity. Hierarchy of Government GAAP.

What are the 4 principles of IFRS? ›

IFRS requires that financial statements be prepared using four basic principles: clarity, relevance, reliability, and comparability.

Why do u want this job? ›

Show your enthusiasm

'This opportunity is really exciting as I will be able to learn/develop/progress in an exciting environment/industry that I am passionate about. ' 'The first thing that caught my eye when I saw the job spec for this role was...'

What is your weakness best answer? ›

Answer “what is your greatest weakness” by choosing a skill that is not essential to the job you're applying to and by stressing exactly how you're practically addressing your weakness. Some skills that you can use as weaknesses include impatience, multitasking, self-criticism, and procrastination.

What is credit and debit? ›

What are debits and credits? In a nutshell: debits (dr) record all of the money flowing into an account, while credits (cr) record all of the money flowing out of an account.

What is debit and credit rule? ›

The following are the rules of debit and credit which guide the system of accounts, they are known as the Golden Rules of accountancy: First: Debit what comes in, Credit what goes out. Second: Debit all expenses and losses, Credit all incomes and gains. Third: Debit the receiver, Credit the giver.

What is accounting cycle? ›

The accounting cycle is the process of accepting, recording, sorting, and crediting payments made and received within a business during a particular accounting period.

What is your strength as accountant? ›

Attention to detail and excellent math skills are my greatest strengths. At least everything I've experienced so far during my studies and professional career suggest so. Just like everyone else, however, I have my weaknesses. I am impatient at times, and I definitely have to improve on my communication skills.

What are your salary expectations? ›

Choose a salary range.

Rather than offering a set number of the salary you expect, provide the employer with a range in which you'd like your salary to fall. Try to keep your range tight rather than very wide. For example, if you want to make $75,000 a year, a good range to offer would be $73,000 to $80,000.

What are the top 5 questions to ask an interviewer? ›

7 good questions to ask at an interview
  • Can you tell me more about the day-to-day responsibilities of the role? ...
  • How could I impress you in the first three months? ...
  • Are there opportunities for training and progression within the role/company? ...
  • Where do you think the company is headed in the next five years?


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