The dual aspect principle in financial accounting indicates that all business transactions should have double-entry bookkeeping due to the dual nature of each transaction. For example, during any purchase, the organization trades cash for the item they require and then receives it, which underpins the dual aspect principle in financial accounting. Use the sample answers in this section as a guide when assessing your candidates’ responses to this selection of five of the interview questions from the above list. Below, you can see a selection of five crucial questions related to accounting processes, along with sample answers you can use as a guide when interviewing candidates.

“Generally, I find the best approach is to use analogies if a term isn’t widely used outside of the world of accounting. For example, I may describe a ledger as a record-keeping system that’s not unlike a database, as most people are familiar with databases, at least conceptually. A journal entry has the information about the credits and debits made to a specific account. They are represented by separating the credits and debits into columns. In zero accounting profits, the explicit costs are covered by the revenues of the company. Zero economic profits are defined as the state of normal profits when its economic profit is equal to zero.

How to calculate turnover accounting?

The existence of this kind of liability is completely dependent on the occurrence of a probable event in future. 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. The cost sheet contains both direct and indirect expenses incurred in producing any product. The classifying the expenses incurred based on administration, office, distribution, and selling overheads.

First impressions are key in interviews, and accounting is no different. Irrespective of which accounting firm you’re applying to, you can be sure that your interviewer will ask this question, as it’s a notable standard in the industry. Consequently, answering the technical, behavioral, and logical questions with confidence and consistency is key to converting an interview into an offer.

tips for using financial accounting interview questions in the hiring process

Additionally, we recommend that you read our new blog post on “100 Accounting Terms You Must Know for Interviews“. BEP or Break Event Point can be defined as a situation in which the company neither gets profit nor no loss. It top 20 banking terms you should know involves the activity in which total revenues equal total costs. The term payroll is defined as a list of employees who get paid by the organization. EA represents as a taxpayer and collects and audits, financial transactions.

This will help you to sneak in a few qualities from your personality which are in sync with the job description. This is not an accounting question but is usually asked right at the outset of the interview. The question is intended to break the ice and get a peek into your personal details. You can take advantage of this question and steer the conversation in a particular direction. For example, you can talk about your life, what made you choose a career in accounting and anything that might lay a good impression on you in front of the interview panel.

Everything You Need To Build Your Accounting Skills

Equity refers to the amount of money that would be returned to all the shareholders of a company if all of the assets were liquidated. Similarly, owner’s equity refers to the owner’s rights to the assets of the business. It is also called the capital of the business and can be calculated by removing the creditor’s equity from the total equity.

The different accounting concepts include money measurement concept, accounting period, matching concepts, etc. 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 type of Personal Account which belongs to an individual or a firm (owner). Balance Sheet – B/S would show them as on-date assets, liabilities & capital position of a business. Income Statement – It presents a summarized view of revenue, income, profit, and loss of a particular accounting period. This single entry will affect both accounts, the asset accounts, and the liabilities accounts.