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Know the top Accounting interview questions and answers for freshers and experienced candidates to prepare for job interviews.

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Know the top Accounting interview questions and answers for freshers and experienced candidates to prepare for job interviews.

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Freshers / Beginner level questions & answers

Ques 1

Explain the difference between assets and liabilities.

Assets are resources owned by a company, while liabilities are obligations or debts that a company owes.

Example:

An example of an asset is cash, and a liability could be a bank loan that the company needs to repay.
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Ques 2

Explain the terms 'debit' and 'credit' in accounting.

Debit increases assets and expenses but decreases liabilities and income. Credit increases liabilities and income but decreases assets and expenses.

Example:

Debiting cash account when receiving payment and crediting accounts receivable to show the reduction.
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Ques 3

Define the term 'GAAP.'

GAAP stands for Generally Accepted Accounting Principles, a set of standard guidelines and procedures used in the U.S. to prepare and present financial statements.

Example:

Using consistent accounting methods in financial reporting to ensure comparability.
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Ques 4

Explain the difference between a current asset and a non-current asset.

Current assets are expected to be converted into cash or used up within one year, while non-current assets have a longer useful life.

Example:

Cash and accounts receivable are current assets, while buildings and equipment are non-current assets.
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Ques 5

What is the purpose of the cash basis of accounting?

The cash basis of accounting records revenues and expenses when they are received or paid in cash, rather than when they are incurred or earned.

Example:

If a company receives payment for services in January, it recognizes the revenue in January, irrespective of when the services were provided.
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Ques 6

Explain the concept of 'cost of goods sold' (COGS).

COGS represents the direct costs associated with producing goods or services sold by a company and includes costs like raw materials, labor, and manufacturing overhead.

Example:

If a company sells 1,000 units at $50 each with a total production cost of $30 per unit, the COGS is $30,000.
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