Capital redemption reserve: A reserve created on redemption of the
average cost. The cost of an item at a point of time as determined by applying
an average of the cost of all items of the same nature over a period. When
weights are also applied in the computation it is termed as weight average
cost.
Floating Change: Assume change on some or all assets of an
enterprise which are not attached to specific assets and are given as security
against debt.
Difference between Funds flow and Cash flow statement:
A Cash flow statement is
concerned only with the change in cash position while a funds flow analysis is concerned
with change in working capital position between two balance sheet dates. A cash
flow statement is merely a record of cash receipts and disbursements. While
studying the short-term solvency of a business one is interested not only in cash
balance but also in the assets which are easily convertible into cash.
Difference between the Funds flow and Income statement:
A funds flow statement deals with
the financial resource required for running the business activities. It explains
how were the funds obtained and how were they used, whereas an income statement
discloses the results of the business activities, i.e., how much has been
earned and how it has been spent. A funds flow statement matches the “funds
raised” and “funds applied” during a particular period. The source and
application of funds may be of capital as well as of revenue nature. An income statement
matches the incomes of a period with the expenditure of that period, which are
both of a revenue nature.
Why did you select accounting as your profession?
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.
Do you have any professional experience of this field?
Yes, I have worked as an
accountant at two different places.
Did you use accounting applications at your previous companies or
prefer working manually?
Yes, I have used Advanced
Business Solutions and AME Accounting Software in my previous jobs.
Can you name any other accounting application?
Yes, I am familiar with CGram
Software, Financial Force, Microsoft Accounting Professional, Microsoft
Dynamics AX and Microsoft Small Business Financials.
Which accounting application you prefer most and why?
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.
What is the abbreviation for the accounting terms debit and credit?
Debit abbreviation is “dr” and
credit abbreviation is “cr”.
How many types of business transactions are there in accounting?
There are two types of
transactions in accounting i.e. revenue and capital.
What is balance sheet?
It is a statement that states all
the liabilities and assets of the company at certain point.
Have you ever heard about TDS, what it is?
Yes, TDS abbreviates Tax
Deduction at Source.
In balance sheet, where do you show TDS?
It is shown on the assets
section, right after the head current asset.
Do you have any idea about Service Tax or Excise?
It is a kind of hidden tax that
is included in the service provided by the service provider and paid by the
service receiver.
Do you think there is any difference between inactive and dormant
accounts?
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.
What is tally accounting?
It is the software used for
accounting in small business and shops for managing routine accounting
transactions.
How can you define departmental accounting?
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.
Define fictitious assets?
These are the assets that cannot
be shown or touch. Fictitious assets can only be felt such as good will, rights
etc.
By saying, perpetual or periodic inventory system; what do we mean?
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.
In accounting, how do you define premises?
Premises refer to fixed assets
that are shown in the balance sheet.
In accounting, VAT abbreviates what?
VAT means Value Added Tax.
Do you possess any knowledge
about accounting standards?
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.
What is ICAI?
It is the abbreviation of Institute of Chartered Accountants in India.
How can you explain the basic accounting equation?
We know that accounting is all
about assets, liabilities and capital. Therefore, the accounting equation is: Assets
= Liabilities + Owners Equity.
Define Executive accounting?
It is a type of accounting that
is specifically designed for the business that offers services to users.
Define Public accounting?
Public accounting offers audits
and CPAs to review company financial records to ensure accountability. It is
for general public.
What is a CPA?
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.
What do you think is bank reconciliation statement?
A reconciliation statement is
prepared when the passbook balance differs from the cashbook balance.
Differentiate Public and Private Accounting?
Public accounting is a type of
accounting that is done by one company for another company. Private accounting
is done for your own company.
What is project implementation?
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
Do you think Accounting Standards are mandatory and why?
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.
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