Accounting Job Interview Questions And Answers: September 2015

Sunday, 27 September 2015

DIFFERENCE BETWEEN MEMORANDUM AND ARTICLES

MEMORANDUM	ARTICLES
It is a primary document	It is Secondary document
It is subordinate to the Act	It is subordinate to MOA & the Act
It is a must for every Company	Can be written or taken from Company Act
Strict provisions for alteration	Special Resolution is sufficient except where the amendment brings in to effect a private from public
Ultra virus MOA even all the members. Cannot ratify it.	Ultra virus AOA but intra virus the MOA can be Ratified.

DIFFERENCE BETWEEN SHARE CERTIFICATE AND SHARE WARRANT

SHARE CERTIFICATE	SHARE WARRANT
The holder is a registered member of the compound	The bearer of a shares warrant is not a registered member
The holder of a share certificate is essentially a member	The bearer of a share warrant can be a member only if the article so provided in AOA
For the issue of share certificate may required approval of the central Govt.	Share warrant can be issued central Govt. approval is must
All Companies must issue share certificates	Share warrants can be only by public companies
Share certificate is issued is partly (or) fully paid shares	Share warrant can be issued only fully paid shares
Share certificate in not negotiable	Share warrant is negotiable
The holder of a share certificate can present a petition for winding up	The holder of a share warrant can not present a petition winding up

Saturday, 26 September 2015

DIFFERENCE BETWEEN SHARE AND STOCK

SHARE	STOCK
Has a nominal value	No Nominal value
May be fully paid or partly paid	Always fully paid
Can be transferred is whole numbers and not in fractions	Can be transferred in fractions
Each and every shares shall be of equal denomination	May be of unequal amount
Shares are identified with distinctive numbers	Do not have any distinctive numbers
Can be issued directly to the public	Only fully paid up shares can be converted in to stock and cannot be issued Directly

DIFFERENCES BETWEEN SHARE HOLDER AND DEBENTURE HOLDER

SHARE HOLDER	DEBENTURE HOLDER
One of the owners of the Company and has proprietary interest in the Company	Only a creditor of the Company
When the Company makes profits and the board recommends, share holder gets a share in the profits	Gets a fixed rate of Interest whether the Company makes profit
No security for his Investment	Normally debentures are security
Eligible for voting rights	No voting Rights
On liquidation, share holders are paid last	Ranks priority with regard repaid

DIFFERENCE BETWEEN SHARES AND DEBENTURES

SHARES	DEBENTUREs
Shares are a part of the capital of the company	Debentures contribute a loan
Share holders are members or Owners of the company	Debenture holders are creditors
When recommended by the Board dividend could be declared to share holders	Fixed amount of Interest on debentures paid before dividend declaration
Shares do not carry on any charge	Debentures generally have a charge on the asset of the company
Shares have restrictions Issue at a discount	Debentures do not have Restrictions Issue at a discount
Share holders have voting Rights	Debenture holders do not have voting rights
Dividend is payable only when profits are there	Dividend is payable whether profits are there or not
No fixed dividend	Rate of Interest is fixed

DIFFERENCE BETWEEN TRIAL BALANCE AND BALANCE SHEET

TRIAL BALANCE	BALANCE SHEET
The trial Balance is prepared to check the arithmetical accuracy of the Books of Accounts	Balance sheet is prepared to knowledge true position of Assts and liabilities particular date
Trial balance doesnot show the financial position of business	The financial position can be knowledge from balance sheet
The trials balance is prepared based on the Ledger Accounts	The balance sheet is prepared on the base of information from trial balance
The preparation of trial balance is not compulsory	The preparation of balance sheet is must
Trial balance cannot be shown as a documentary evidence	But balance sheet will be accept documentary evidences by tax authorities and courts

DIFFERENCE BETWEEN PROFIT & LOSS ACCOUNT AND BALANCE SHEET

PROFIT & LOSS ACCOUNT	BALANCE SHEET
Objective of preparing P&L A/C to ascertain the Net profit cost it loss of the business during the year	The objective of preparing balance sheet is to know financial position of the business on a specific date
Is an account having debit and credit as such “TO” and “BY” are used recorded in the P & L A/C	Balance sheet is a statement and hence “TO” and “BY” are not used
Revenue expenditure and Incomes are accorded in the P & L A/C	Capital Incomes and expenditures are shown in the balance sheet
Balancing figure of this Account either net profit or Net loss	Balance sheet will not show any balancing figure. A total of liabilities and Assets side should always be equal

DIFFERENCE BETWEEN PROMISSORY NOTE AND BILL OF EXCHANGE

PROMISSORY NOTE	BILL OF EXCHANGE
In a pro-note there is a promise to pay	In a bill there is an order to pay
In a pro-note there are two parties the maker and the payee	In a bill there are there parties 1. Drawer 2. Drawee 3. Payee
Pro-note cannot be made payable to the maker himself	In a bill the drawer and the payee may be the same
The maker a pro-note is primarily liable	The maker of a bill is liable only when the Drawee does not accept or pay
A pro-note is signed by the person liable to pay. so no acceptance is needed	A bill has to be accepted by the Drawee before he can be held liable

DIFFERENCE BETWEEN JOURNAL AND LEDGER

JOURNAL	LEDGER
Journal is the book of first or original entry. It is also called the Book of first entry	The ledger is the Book of second entry
Transaction in the Journal will be recorded Immediately	Depending upon his conveniences the trader Records of the transaction in the ledger
When once the entries are posted to ledger the Journal Looses its Importance	It will never Loose importance as it is the main book of Accounts which is relied upon permanently
In the preparation of final A/Cs Journal is not useful	In the preparation of trial balance and final A/Cs Ledger is a must
The tax authorities generally may not depend on Journal	In the finalization of income tax to be paid, the tax authorities depend on ledger.

DIFFERENCES BETWEEN EXPNSE AND EXPENDITURE

EXPNSES	EXPENDITURE
Money spent for to get short term benefit	Money spent for to get Long term benefit
It is Nominal Account	It is Real Account
It comes in P&L Debit side	It comes in Balance sheet Asset side
Generally smaller in amount	Generally bigger in amount
It is recurring nature	It is non recurring nature
Ex. Rent, Salary, Telephone,	Ex. Purchase of Land, Buildings, Machinery

Friday, 25 September 2015

Sample Accounting exam for Freshers and Accountants, Interview Questions and Answers

Test your accounting knowledge and check your result with the below given answers. We would like to hear your score in comment.

(1) __________ is concerned with the maximization of a firm's earnings after taxes.

(a) Shareholder wealth maximization

(b) Profit maximization

(d) EPS maximization

(2) Which of the following would generally have unlimited liability?

(a) A limited partner in a partnership.

(b) A shareholder in a corporation.

(d) A member in a limited liability company (LLC).

(3) Which of the following examples would be deductible as an expense on the corporation's income statement?

(a) Interest paid on outstanding bonds.

(b) Cash dividends paid on outstanding common stock.

(d) All of the above.

(4) In finance we refer to the market where new securities are bought and sold for the first time as the __________ market.

(a) money (b) capital

(5) Which of the following would not improve the current ratio?

(a) Borrow short term to finance additional fixed assets.

(b) Issue long-term debt to buy inventory.

(d) Sell fixed assets to reduce accounts payable.

(6) Krisle and Kringle's debt-to-total assets ratio is.4. What is its debt-to-equity ratio?

(a) .2 (b) .77

(7) Which group of ratios measures a firm's ability to meet short-term obligations?

(a) Liquidity ratios.

(b) Debt ratios.

(d) Profitability ratios.

(8) According to the accounting profession, which of the following would be considered a cash-flow item from a "financing" activity?

(a) A cash outflow to the government for taxes.

(b) A cash outflow to repurchase the firm's own common stock.

(d) A cash outflow to purchase bonds issued by another company.

(9) Cash budgets are prepared from past:

(a) balance sheets.

(b) income statements.

(d) None of the above answers are

(10) The accounting statement of cash flows reports a firm's cash flows segregated into what categorical order?

(a) Operating, investing, and financing.

(b) Investing, operating, and financing.

(d) Financing, investing, and operating.

(11) The firm had a net increase of $800,000 in net fixed assets over the last period. The beginning and ending net fixed asset account balances were $9,100,000 and $9,900,000 respectively. If the firm purchased $2,000,000 in additional fixed assets and sold $100,000 of fixed assets at book value, what was the firm's depreciation expense over the period?

(a) $800,000

(b) $1,100,000

(d) $2,700,000

(12) If EOQ = 40 units, order costs are $2 per order, and carrying costs are $.20 per unit, what is the usage in units?

(a) 10 units. (b) 16 units.

(13) What is the book value of common equity per share of common equity outstanding for the following firm? The firm has 20,000 common shares authorized of which 15,000 are outstanding at a par value of $1. Additional paid-in-capital represents $300,000 and retained earnings are an additional $300,000.

(a) $1 (b) $20

(14) Upon close examination of the income statement, which of the following mathematical expressions would be true?

(a) Net Sales - Gross Profit = Income from Operations

(b) Gross Profit + Selling, General and Administrative Expenses = Net Sales

(d) None of the above are true.

(15) Which of the following is not a correct expression of the accounting equation?

(a) Assets - Liabilities = Owners' Equity

(b) Net Assets = Equities

(d) Assets = Liabilities + Owners' Equity

(16) The owners' equity section of a balance sheet contains two major components:

(a) Common Stock and Additional Paid-in Capital

(b) Paid-in Capital and Retained Earnings

(d) Net Income and Dividends

(17) Which of the following would not be included on a balance sheet?

(a) Accounts receivable.

( b) Accounts payable.

( c) Sales.

( d) Cash.

(18) If total assets were $21,000 and total liabilities were $12,000 at the beginning of the year, and if net income for the year was $5,000, what is total owners' equity at the end of the year?

(a) $ 4,000 (b) 5,000

(19) Treasury stock involves shares which are:

(a) issued and outstanding.

(b) authorized but not yet issued.

(d) issued but not currently outstanding.

(20) If a transaction during the year caused one asset to increase by $40,000 and another asset to decrease by $30,000, which of the following events may have caused these effects?

(a) Merchandise inventory was purchased and paid for entirely with cash.

(b) Cash was received in exchange for the issuance of common stock.

(d) None of the above could have caused these effects.

(21) Net assets were $9,500 at the beginning of the year and $12,000 at the end of the year. Merchandise Inventory went up by $1,000 during the year, Accounts Payable went down by $500, and Accounts Receivable went down by $2,000. If the Cash account was the only other asset and there were no other liabilities, what happened to cash during the year?

(a) Cash increased by $2,000.

(b) Cash increased by $3,000.

(d) None of the above.

(22) The term 'current assets' does not include-

a) Payments in advance.

b) Bills receivable.

c) Long-term deferred charges.

d) Cash at bank

(23) The retained earnings balance for Matt & Anne's Food Center at December 31, 2003 was $33,000. The balance at December 31, 2004 was $47,000. During 2004, dividends in the amount of $6,000 were declared and paid to stockholders. The only other change in retained earnings was due to net income. The net income for 2004 was?

(a) $8,000 (b) 14,000

(24) The principle stating that all expenses incurred while earning revenues should be identified with the revenues when they are earned, and reported for the same time period is the:

(a) cost principle.

(b) revenue principle.

(d) matching principle.

(25) "The firm must be treated as financially separate and distinct form its' owner(s)". This rule is known as:

(a) Matching ( b ) Business Entity

Answer: B

1)B 2)C 3)A 4)C 5)A 6)C 7)A 8)B 9)D 10)A 11)B 12)D 13)D 14)C 15)B

16)B 17)C 18)D 19)D 20)C 21)B 22)C 23)C 24)D 25) B