Accounting Interview Questions
- What is accounting? Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions.
- What are the main principles of accounting? The main principles of accounting are the economic entity assumption, the monetary unit assumption, the time period assumption, the going concern assumption, and the cost principle.
- What is the difference between bookkeeping and accounting? Bookkeeping is the process of recording financial transactions, while accounting is the process of interpreting, classifying, analyzing, and summarizing those transactions.
- What is the difference between cash basis accounting and accrual basis accounting? Cash basis accounting records transactions only when cash is exchanged, while accrual basis accounting records transactions when they occur, regardless of when cash is exchanged.
- What is the difference between gross profit and net profit? Gross profit is the difference between revenue and the cost of goods sold, while net profit is gross profit minus all expenses, including taxes.
- What is the difference between a balance sheet and an income statement? A balance sheet shows a company’s assets, liabilities, and equity at a specific point in time, while an income statement shows a company’s revenues and expenses over a period of time.
- What is the difference between accounts payable and accounts receivable? Accounts payable are the amounts a company owes to its creditors, while accounts receivable are the amounts a company’s customers owe to it.
- What is the difference between a debit and a credit? A debit increases an asset or expense account and decreases a liability, equity, or revenue account, while a credit decreases an asset or expense account and increases a liability, equity, or revenue account.
- What is the difference between a trial balance and a general ledger? A trial balance is a list of all accounts and their balances used to check for errors in the recording of transactions, while a general ledger is a complete record of all transactions.
- What is the difference between a budget and a forecast? A budget is a plan for expected financial performance, while a forecast is a prediction of future financial performance.
