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Basic Accounting Questions asked for ACCA freshers

The document lists the top 20 basic accounting questions commonly asked in interviews for ACCA freshers, along with concise answers for each. Key topics include the accounting equation, financial statements, accrual accounting, and the importance of internal controls. It serves as a study guide for candidates preparing for accounting interviews.

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Rubel Khan
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35 views

Basic Accounting Questions asked for ACCA freshers

The document lists the top 20 basic accounting questions commonly asked in interviews for ACCA freshers, along with concise answers for each. Key topics include the accounting equation, financial statements, accrual accounting, and the importance of internal controls. It serves as a study guide for candidates preparing for accounting interviews.

Uploaded by

Rubel Khan
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Here are the top 20 basic accounting questions commonly

asked in interviews for ACCA freshers:

1. What is accounting?

● Answer: Accounting is the process of recording, classifying, and summarising


financial transactions to provide useful information for decision-making.

2. Can you explain the accounting equation?

● Answer: The accounting equation is Assets = Liabilities + Equity. It represents the


relationship between a company's resources and the claims against those resources.

3. What are the main financial statements?

● Answer: The main financial statements are the balance sheet, income statement,
and cash flow statement. Each statement provides different insights into a
company’s financial health.

4. What is the difference between accounts payable and accounts


receivable?

● Answer: Accounts payable is money owed by a company to its suppliers, while


accounts receivable is money owed to the company by its customers.

5. What is the purpose of a trial balance?

● Answer: A trial balance is prepared to ensure that the total debits equal the total
credits in the accounting records, helping to identify any errors.

6. What is accrual accounting?

● Answer: Accrual accounting recognizes revenues and expenses when they are
incurred, regardless of when cash is exchanged, providing a more accurate picture of
a company's financial position.

7. What is depreciation, and how is it calculated?

● Answer: Depreciation is the allocation of the cost of a tangible asset over its useful
life. It can be calculated using methods like straight-line or declining balance
(Reducing Balance Method).

Tip: Learn Journal Entries

8. Can you explain the concept of materiality?


● Answer: Materiality refers to the significance of an amount, transaction, or
discrepancy that could influence the decisions of financial statement users. It guides
the disclosure of information.

9. What is a ledger?

● Answer: A ledger is a book or digital record that contains all of a company's financial
transactions, organised by account, serving as the basis for preparing financial
statements.

10. What is the difference between revenue and profit?

● Answer: Revenue is the total income generated from sales of goods or services,
while profit is the difference between total revenue and total expenses.

11. What is the purpose of internal controls in accounting?

● Answer: Internal controls are processes designed to ensure the accuracy and
reliability of financial reporting, safeguard assets, and promote compliance with laws
and regulations.

12. What are the key components of a cash flow statement?

● Answer: A cash flow statement includes three main components: cash flows from
operating activities, investing activities, and financing activities.

13. Can you explain the matching principle?

● Answer: The matching principle states that expenses should be recognized in the
same period as the revenues they help generate, ensuring accurate profit
measurement.

14. What are current assets and current liabilities?

● Answer: Current assets are assets expected to be converted to cash or used within
one year, while current liabilities are obligations due within one year.

15. What is goodwill, and how is it recorded?

● Answer: Goodwill is an intangible asset that arises when a company acquires


another company for more than the fair value of its net identifiable assets. It is
recorded as a non-current asset on the balance sheet.

16. What is a journal entry?

● Answer: A journal entry is the record of a financial transaction in the accounting


system, showing the accounts affected, the amounts, and the direction of the change
(debit or credit).
17. What is the difference between single-entry and double-entry
accounting?

● Answer: Single-entry accounting records each transaction only once, while


double-entry accounting records each transaction twice (debits and credits), ensuring
a balanced accounting equation.

18. What are financial ratios, and why are they important?

● Answer: Financial ratios are calculations that assess a company’s performance and
financial health by comparing various figures from financial statements. They are
important for making informed investment and management decisions.

19. How do you define an audit?

● Answer: An audit is an independent examination of financial statements to


determine their accuracy and adherence to applicable accounting standards and
regulations.

20. What are the implications of the going concern assumption?

● Answer: The going concern assumption is the belief that a company will continue its
operations for the foreseeable future. If this assumption is questioned, it may affect
how assets and liabilities are reported.

These questions cover essential accounting concepts that are foundational for ACCA
freshers. Be ready to elaborate on your answers and provide examples from your studies or
experiences where relevant. Good luck with your interviews!

#ATP

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