Accounting Interview Questions and Answers
Question - 111 : - What is a normative theory?
Answer - 111 : -
The normative theory is a theory that prescribes how the accounting process should be done.
Question - 112 : - What Is accounting normalization?
Answer - 112 : -
Accounting normalization is a process of removing items from the statement of income or balance sheet. Once the normalization process is done, the result shows the future earning capacity of the buyer.
Question - 113 : - Define creative accounting
Answer - 113 : -
Creative accounting is a practice to create a picture that is not technically correct from the perspective of the intended user.
Question - 114 : - What are accounting transactions?
Answer - 114 : -
Accounting transactions refer to the execution of the user program that contains a list of actions.
Question - 115 : - What is Ratio Analysis?
Answer - 115 : -
Ratio analysis is the analysis of various goods in the business financial statement.
Question - 116 : - What are non-performing assets?
Answer - 116 : -
A non-performing asset is an account of borrower, that has been classified by a financial institution or bank. It should be as per guidelines given by RBI.
Question - 117 : - Explain various methods of calculating depreciation in details
Answer - 117 : -
Various methods of calculating depreciation are:
- Double declining method: This method is used to calculate book value, which is multiplied by a fixed depreciation rate.
- Units of production method: It is a way of charging depreciation on assets. This method is used when the asset’s value is closer to the units produces then years it is in used.
- Straight-line method: It can be calculated by dividing the difference between the cost of assets and its salvage value by the expected years to be used.
- Sum of year digit method: This method is based on the assumption that the assets productivity decreases with the passage of time.
- Sinking fund method: A technique which is used when the cost of replacing asset is too high.
Question - 118 : - Define fixed asset
Answer - 118 : -
Fixed asset are assets which are tangible in nature. It is not used to sell in the near future and from which future benefits are derived.
Question - 119 : - What is BEP?
Answer - 119 : -
BEP or Break Event Point can be defined as a situation in which the company neither gets profit nor no loss. It involves the activity in which total revenues equal total costs.
Question - 120 : - Define cost sheet
Answer - 120 : -
The cost sheet is a cost statement of product for a specific period of time. It contains direct and indirect expenses involved in producing a product.