We know that all types of transactions need to be documented. The trade bills are the documents, generated against each transaction.
In accounting, trial balance is an accounting report that lists the balances in each of an organization's general ledger accounts. This is done at the end of posting journal entry to ensure that there are no posting errors.
GAAP means Generally Accepted Accounting Principle; it is a framework of accounting, standards, procedures & rules determined by the professional accounting industry and practiced by publicly traded U.S companies all over the U.S.A.
By depreciation we mean that a value of an asset is decreasing as it is in use. It has two types such as “Straight Line Method” and “Written Down Value Method”.
A deposit in transit is a checks and cash that have been received and recorded by an entity, but which have not yet been entered in the records of the bank where the funds are deposited.
There are three branches of accounting named as “Financial Accounting”, “Management Accounting” and “Cost Accounting”.
We know that accounting is all about assets, liabilities and capital. Therefore, the accounting equation is:
Assets = Liabilities + Owners Equity.
As the name implies, the dual aspect concept states that every transaction has two sides. For example, when you buy something, you give the cash and get the thing. Similarly, when you sale something, you lose the thing and gets the money. So this getting and losing is basically two aspects of every transaction.
A short term amounts due from buyers to a seller, who have purchased goods or services from the seller on credit is referred as account receivable.
Speak confidently when answering questions where success is the subject. You do not have to gush and describe every possible aspect you can think of. Talk about a few key concepts, like communication and negotiation skills, market research and customer prospecting, etc. You will make an even better impression if you give an example from your own professional life to demonstrate your idea.
A compound journal entry is just like other accounting entry where there is more than one debit, more than one credit, or more than one of both debits and credits. It is essentially a combination of several simple journal entries.
Public accounting is a type of accounting that is done by one company for another company. Private accounting is done for your own company.
Yes, I have prepared few MIS reports during my previous jobs. MIS reports are created to identify the efficiency of any department of a company.
An interviewer expects an account manager to be efficient in knowing how to meet targets within deadlines. He may ask the candidate about his track record for achieving targets. With this question, he gives the candidate an opportunity to provide examples of goals and strategies to achieve them. The interviewer may look for the candidate's strong communication skills as a vital tool in the candidate's examples.
Working capital is a financial metric that calculates the resources available to the company to finance its day-to-day operations. It is typically calculated by deducting current liabilities from current assets.
Suppose you have to produce an additional unit of output. The estimated cost of additional inputs to produce that output is actually the marginal cost.
It is a type of accounting in which separate account is created for departments. It is managed separately as well as shown independently in the balance sheet.
It is the residual value of an asset. The residual value is the value that any asset holds after its estimated life time.
An interviewer asks a candidate about her opinion of a successful account manager to understand the characteristics that the candidate believes would make her a success. The candidate should identify three or four key concepts as examples of her own experiences such as communication skills, effective negotiation skills, and strengths in market research. She should sound confident in answering this question.
Yes, I am familiar with CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.
This question tests your confidence, self awareness, and independence. Do not be afraid to speak your mind confidently. The ability to work independently and make decisions is crucial if you are an account manager. This in turn requires being organized and self motivated, with the ability to work with many customers at once. This means outstanding customer service skills.
Things that fall under intangible asset are,
☛ Brand names
☛ Domain names, and so on.
A bank reconciliation is a process done by a company to ensure that the company's records (check register, balance sheet, general ledger account, etc.) are correct and that the bank's records are also correct.
Balancing means to equate both sides of the T-account i.e. the debit and credit sides of a T-account must be equal/balanced.
Accounting is all about recording daily business activities while auditing is the checking that whether all these events have been noted down correctly or not.
It is a kind of hidden tax that is included in the service provided by the service provider and paid by the service receiver.
A cash discount should be recorded in journal entry as a reduction of expense in “cash account”.
Assets minus liabilities is equal to owners' equity or stockholders equity.
Account which is responsible or affected by the interest payable is “Current liability account”
It is a kind of groups made on the basis of same responses by a system.
A reconciliation statement is prepared when the passbook balance differs from the cashbook balance.
It is shown on the assets section, right after the head current asset.
It is a statement that states all the liabilities and assets of the company at certain point.
It is the abbreviation of Institute of Chartered Accountants in India.
Deferred taxation is a part of owner's equity.
Entries to revenues accounts such as Service Revenues usually goes into credit side.
It is the indirect expenditure of a company such as salaries, rent dues etc.
It is the time required by the company to pay all its account payables.
Premises refer to fixed assets that are shown in the balance sheet.
There are two types of transactions in accounting i.e. revenue and capital.
A Bad debt expense is the amount of an account receivable that is considered to NOT be collectible.
Offset accounting is one that decreases the net amount of another account to create a net balance.
VAT means Value Added Tax.
Yes, TDS abbreviates Tax Deduction at Source.
Yes, I have worked as an accountant at two different places.
Financial statement of the company includes various information like
☛ Balance Sheet ( Assets, liabilities, and equity)
☛ Income statement ( Profit or Loss statement)
☛ Equity statement
☛ Cash flow statement
In addition to accounting activities, an account manager holds a management position that involves company relations to interact effectively with staff. With a question related to a preferred work environment, an interviewer is probing the candidate's leadership abilities and interpersonal skills. A candidate who chooses an environment in which he can interact to offer support and feedback, may be preferred to a candidate who prefers to sit behind a desk.
Double entry accounting is an accounting system that requires recording business transaction or event in at least two accounts. It is the same concept of accounting, where every debit account should be matched with a credit account.
For example, if a company takes a loan from a bank, it receives cash as an asset but at the same time it creates a liability on a company. This single entry will affect both accounts, the asset accounts, and the liabilities accounts, such entry is referred as double entry accounting.
A certified financial accountant should have knowledge about
☛ Accounting principles and practices
☛ Reporting and analysis of financial data
☛ Auditing practices and principles
☛ Account management
☛ Software knowledge dealing with Accounting
☛ Knowledge of relevant laws, codes and regulations
Reversing journal entries are entries made at the beginning of an accounting period to cancel out the adjusting journal entries made at the end of the previous accounting period.
The General ledger account is an account where the company records all the information for its various expenses and income types into separate accounts. Such that all the debits and credits pertaining to that particular type of transaction can be entered in one place and kept balanced.
You must be very good at statistics if you want to do well in accounting. Otherwise, with minimum knowledge you cannot manage your day to day transactions effectively in accounting.
It is the term introduced in the records for every defective or unsatisfactory good returned back to its supplier.
Yes, as per my knowledge there are total 33 accounting standards published so far by ICAI. The purpose of these standards is to implement same policies and practices in any country.
I think all are good though but Microsoft Accounting Professional is best because it offers reliable and fast processing of accounting transactions that saves time and increases proficiency.
Public accounting offers audits and CPAs to review company financial records to ensure accountability. It is for general public.
Material facts are the bills or any document that becomes the base of every account book. It means that all those documents, on which account book is prepared, are called material facts.
The disadvantage of double entry system,
☛ If there is any compensatory errors, it is difficult to find out by this system
☛ This system needs more clerical labour
☛ It is difficult to find the errors if the errors are in the transactions recorded in the books
☛ It is not preferable to disclose all the information of a transaction, which is not properly recorded in the journal
The investment of personal assets by the owner will increase total assets and increase owner's equity.
A standard journal entry includes, date of business transaction, name of the accounts affected, amounts to be debited or credited and a brief description of the event.
The ability to meet goals and deadlines is important for an accounts manager. If you have legitimately never failed to meet a goal then feel free to share this achievement, but don't stop there. Explain several factors that have enabled you to maintain your excellent record. If you have failed to meet a goal in the past, describe the most salient points of the project and outline the steps that led to failure. Then show the interviewer that you are the kind of person who can learn from their mistakes by detailing how you would approach the problem differently in the future to elicit a better outcome. Whether you have failed to meet a goal or have a perfect record, be sure to detail a strategy for meeting goals that has worked well for you in the past and that you believe will serve you well in this position.
As an account manager, you work on two fronts: the clients and your company. Both require excellent communication skills. You need to earn the trust of both clients and managers, to convince both sides to close the best possible deal. Teamwork is probably more related to coordinating actions with the company, the development, sales, and marketing departments.
The three factors that can affect your cash flow and business profit includes
☛ Cash flows from investing activities: It includes shares, bonds, physical property, machineries, etc.
☛ Cash flows from operating activities: It does not include cash received from other sources like investments
☛ Cash flow from financing activities: It includes any activities that involves dividend payments that the company made to its shareholders, any money that includes stock to the public, any money borrowed from the lender etc. in other words, it is a report that tells the firm about the money borrowed and paid out in order to finance its activities.
Due to double entry, the “cash account” will increase as such the liability account increases.
The account “Cash” will be credited when a company pays a bill.
An over accrual is a condition where the estimate for an accrual journal entry is too high. This estimate may apply to an accrual of expense or revenue.
In a bank reconciliation statement, following thing can be excluded:
☛ Direct payments made by bank not entered in Cash book
☛ Cheques deposited but not cleared
☛ Cheques dishonoured not recorded in cash book
☛ Wrong debits given by bank
☛ Bank Charges or Interst debited by bank
☛ Banks direct payment not entered in Cash book
Not much knowledge but basic mathematical background is required in accounting for operations like addition, subtraction, multiplication and division.
In the first one i.e. the perpetual inventory system, the accounts are adjusted on continual basis. In the periodic inventory system, the accounts are adjusted periodically.
Yes, I have used Advanced Business Solutions and AME Accounting Software in my previous jobs.
The rules for debit and credit for different accounts,
☛ for a capital account, you credit to increase it and debit to decrease it
☛ for an asset account, you debit to increase it and credit to decrease it
☛ for a liability account, you credit to increase it and debit to decrease it
☛ for an expense account, you debit to increase it, and credit to decrease it
☛ for an income account, you credit to increase it and debit to decrease it
Some of the examples for liability accounts
☛ Accounts Payable
☛ Accrued Expenses
☛ Short-term Loans Payable
☛ Unearned or Deferred Revenues
☛ Installment Loans Payable
☛ Current Portion of Long-term Debt
☛ Mortgage Loans Payable
The equation for Acid-Test Ratio in accounting
Acid-Test Ratio = (Current assets – Inventory) / Current Liabilities
Account payable is referred as the amount company owes to its suppliers, its employees, and its partners. In other words, it is the basic cost levied on the company to run business process that is outstanding. Account payable for one company may be account receivable for another firm or company.
☛ Rate yourself as an account manager on a scale of 1 to 10.
☛ What can you do for us that someone else cannot
☛ What is so important about establishing a long term relationship with clients and customers?
☛ Let's pretend I'm a client of your assigned portfolio. How would you up-sell or cross-sell this company's products to me?
☛ I'm the client and you are the newly hired account manager. I'm saying things like “Your services cost too much”, “I'm okay with the way things work right now”, “I need to run this by my business partner before I do anything else” or “I'm too busy; Call me again in 6 months”. How would you turn me around?
☛ Describe a situation in which you were able to handle a dissatisfied client?
☛ What's your track record in delivering on revenue targets and customer satisfaction rates?
☛ If you could snap your fingers and change one thing in your personality what would it be and why?
☛ Tell me about the largest or most important project you have worked on and how you managed it, from start to finish?
☛ What are you passionate about?
Every employee plays a part in helping the company to generate revenue. The interviewer may ask this question to learn more about the sales and customer service methods you typically use and also to determine whether you have anything new to offer their organization. Again, reference instances of success from your past, detailing the outcome in specific, measurable terms. Your response may also include some discussion of the role of market research, effective communication and collaboration with the client, the sales team and other departments within the organization.
When interviewing for a position as an account manager, be sure your responses are tailored to the specific services and products provided by the employer. Reference past successes and be prepared to offer detailed plans for meeting goals and increasing revenue. The account manager interview questions and answers should show the interviewer that you are the best candidate for the job.
An employer may seek an account manager with the ability to make decisions in a fraction of a section. If the interviewer asks a candidate a question about making quick decisions, the candidate should be able to provide an incident, the choices she had and the reasons for the decision she made. Her incident may involve a new credit policy, lowering a price for volume dealers, or other incidents with long-term effects on a business. The candidate could end the response with her decision and the outcome.
Liability can be defined as an obligation towards another company or party. It may consist of delivering goods, rendering services or paying money. They are the opposite of assets, and it may include
☛ Account payable
☛ Interest and dividend payable
☛ Bonds payable
☛ Consumer deposits
☛ Reserves for federal taxes
☛ Short term loans
Long-term notes payable or liabilities are referred for that loan that are not supposed to due for more than a year. These are the loans from banks or financial institution that are secured against various assets on the balance sheet, such as inventories.
The unpresented cheque will get recorded as a credit to the cash account in the company's General ledger.
Accrued expenses usually tend to be extremely short-term. So you would record them within the “current liabilities section” of the balance sheet.
The difference between accumulated depreciation and depreciation expense is that
☛ Accumulated depreciation: It is the total amount of depreciation that has been taken on a company's assets up to the date of the balance sheet
☛ Depreciation expense: It is the amount of depreciation that is reported on the income statement. Basically, it is the amount that corresponds only to the period of time indicated in the heading of the income statement.
The general classification of accounts that usually ledger account involves are:
☛ Assets- Cash, Accounts Receivable
☛ Liabilities- Accounts Payable, Loans Payable
☛ Stockholders' equity- Common Stock
☛ Operating revenues- Revenues through Sales
☛ Operating expenses- Rent Expense, Salaries Expense
☛ Non-operating revenues and gains- Investment Income, gain on Disposal of Equipment
☛ Non-operating revenues and losses- Interest Expense, Loss on Disposal of Equipment
The accounting events that are frequently involved in compound entries are;
☛ Record multiple line items in a supplier invoice that address to different expenses
☛ Record all bank deductions associated to a bank reconciliation
☛ Record all deduction and payments related to a payroll
☛ Record the account receivable and sales taxes related to a customer invoice
Consigner is the owner of the goods or you can say he is the person who delivers the goods to the consignee. The consignee is the person who receives the goods.
Yes, I do believe that accounting standards play a very important role to prepare good quality and accurate financial reports. It ensures reliability and relevance in financial reports.
These are the assets that cannot be shown or touch. Fictitious assets can only be felt such as good will, rights etc.
Well, I was quite good in accounting throughout but in my masters, when I got distinction I decided to adopt this field as a profession.
Yes, both are different terms in accounting. Inactive accounts means that accounts have been closed and will not be used in future as well. While, dormant accounts are those that are not functional today but may be used in future.
It is a type of accounting that is specifically designed for the business that offers services to users.
It is a type of banking that involves a retail client. These clients are the normal people and not any organizational customers.
Provisions are the liabilities or the anticipated items such as depreciation. You can say provisions are expenses. Reserves are the profits of any company and a part of that profit is placed back to the business to keep it sustainable in tough times of a company.
Double entry book-keeping involves five types of accounts,
☛ Income accounts
☛ Expense accounts
☛ Asset accounts
☛ Liability accounts
☛ Capital accounts
When service or goods have been delivered, then revenues are reported in the accounting period.
To adjust entries into account, you can sort entries into five categories.
☛ Accrued expenses: Expenses have been incurred but the vendors invoices are not generated or processed yet
☛ Accrued revenues: Revenues have been earned but the sales invoices are not generated or processed yet
☛ Deferred revenues: Money was received in advance of having been paid or earned
☛ Deferred expenses: Money was paid for a future expense
☛ Depreciation expense: An asset purchased in one period must be allocated to expense in each of the accounting periods of the asset's useful life
☛ Wage accrual is entered with a credit to the “wages payable account”
☛ Interest accrual is entered with a credit to the “interest payable account”
☛ Payroll tax accrual is entered with a credit to the “payroll taxes payable account”
Some asset accounts have a credit balance due to following reasons,
☛ Receiving and posting an amount that was higher than the recorded receivable
☛ Expenses occurred faster than the agreed upon prepayments
☛ An error caused by posting an amount to a wrong account
☛ The amount of checks written exceeded the positive amount in the Cash account
☛ Continuing to amortize or depreciate an asset after its balance has reached zero
A ledger can be referred as an accounting book that keeps the record of journal entries in a chronological order to individual accounts. The process of recording this journal entries is known as posting.
An account manager uses the information at his disposal to maintain and increase client interest. Staying current and doing marketing research are key factors to understanding what the customer is getting tired of and what he might become interested in. This information has to be effectively coordinated with the company departments in order to result in a product that will prevent the customer from leaving.
This question asks you to show that you understand how to fulfill the duties of the position. Your response should include three parts:
Discuss three or four traits that contribute to an account manager's success. You might describe the importance of market research, communication skills or the ability to negotiate.
Describe how those qualities can be beneficial when working with this specific company's clients. If you have done your homework then you will know something about the accounts that they service, and can give specifics on how the traits you've described can help you to meet their customer's needs.
Share experiences that illustrate that you possess these qualities. Outline an experience or achievement where you demonstrated the qualities you've listed in specific, quantifiable terms.
Generally speaking, it is important to do research on a regular basis in relation to every individual client or category of clients. Effective research assesses current situations to project future developments and opportunities for the company. It studies competitors and proposes improvements.
☛ Asset: What financial institute (bank) or people owe you
☛ Liabilities: It is something you owe people or organization
☛ Equity: It is something you own, for example, the amount of your house loan you paid off
There are three types of ledger
☛ General ledger
☛ Debtors ledger
☛ Creditors ledger
Accrual Accounting is a method for measuring the performance and position of the company by identifying economic events regardless of when cash transaction happened. In this method, revenue is compared with the expenditures, at the time in which the transaction happens rather than when the payment is made.
A Master Account has subsidiary accounts. A master account receivable could be anything, it could be account receivable for various individual receivable accounts.
The cash flow statement showcase the cash generated and used during the year or months. Various activities that are involved for the Cash Flow are
☛ Operating activities – business activities accounting to cash
☛ Investing activities – sale and purchase of equipment or property
☛ Financial activities- purchase of stock and own bonds
☛ Supplemental information- exchange of significant items that don't involve cash
A deferred asset refers to a deferred debit or a deferred charge. An example of a deferred charge is bond issue costs. These costs involves all of the fees or charges that an organization incurs in order to register and issue bonds. This fees are paid in a near time when the bonds are issued but it will not be expensed at that time.
The unearned revenues falls under “Liability” account.
☛ Recording of transactions in the journal
☛ Posting of journal entry in to the respective ledger accounts and then preparing a trial balance
☛ Preparing final accounts and closing of books of accounts
As per fair value accounting, a company has to show the value of all of its assets in terms of price on balance sheet on which that asset can be sold.
All types of exchange bills, bonds and other securities owned by a merchant that is payable to him are said as bills receivable.
Project implementation involves six steps in total such as:
☛ Identify Need
☛ Generate and Screen Ideas
☛ Conduct Feasible Study
☛ Develop the Project
☛ Implement the Project
☛ Control the Project
CPA stands for Certified Public Accountant. To become a CPA, one should have to do many other qualifications as well. It is a qualification with 150 hour requirement; it means that one should complete 150 credit hours at any accredited university.
It is the software used for accounting in small business and shops for managing routine accounting transactions.
Debit abbreviation is “dr” and credit abbreviation is “cr”.