Questions in: Accounting & Finance

Right Answer:
1. Financial Audit
2. Compliance Audit
3. Operational Audit
4. Information Systems Audit
5. Performance Audit
6. Forensic Audit
7. Internal Audit
8. External Audit

Right Answer:
The double entry system of accounting is a method where every financial transaction affects at least two accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced. Each entry has a debit and a corresponding credit of equal value.

Right Answer:
Accounting policies are the specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting its financial statements. They guide how transactions and events are recognized, measured, and reported.

Right Answer:
Gujarat VAT (Value Added Tax) is a tax levied on the sale of goods in the state of Gujarat, India. It is applicable to dealers registered under the Gujarat VAT Act and is charged at different rates depending on the type of goods sold.

Right Answer:
The key of accounting is the double-entry system, which ensures that every transaction affects at least two accounts, maintaining the accounting equation: Assets = Liabilities + Equity.

Right Answer:
I am a dedicated accounting professional with [X years] of experience in financial reporting, budgeting, and tax preparation. I hold a degree in [Your Degree] from [Your University] and have worked with [mention any relevant companies or industries]. My skills include proficiency in accounting software like [mention software], strong analytical abilities, and excellent attention to detail. I am committed to maintaining accuracy and compliance in financial practices.

Right Answer:
A reconciliation statement is a document that compares two sets of records to ensure they match and are accurate, typically used to verify the consistency between a company's financial records and bank statements.

Right Answer:
Reporting refers to the accurate presentation of financial data and information, while misreporting involves the intentional or unintentional submission of incorrect or misleading financial information.

Right Answer:
Before processing an invoice, you need to check the following:

1. Invoice accuracy (correct amounts, dates, and terms).
2. Receipt of goods or services (matching with purchase order).
3. Approval from the relevant department or manager.
4. Vendor details (correct name and address).
5. Payment terms and due date.
6. Any discrepancies or issues that need resolution.

Right Answer:
The dual concept in accounting refers to the principle that every transaction affects at least two accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.

Right Answer:
1. Debit what comes in, credit what goes out.
2. Debit the receiver, credit the giver.
3. Debit all expenses and losses, credit all incomes and gains.

Right Answer:
Accruals entry is an accounting adjustment made to record revenues and expenses that have been incurred but not yet recorded in the financial statements, ensuring that financial reports reflect the true financial position of a company during a specific period.

Right Answer:
- **Debit**: An entry that increases an asset or expense account or decreases a liability or equity account.
- **Bank Reconciliation (Bank Reco)**: The process of comparing and matching the cash balance on a company's books to the corresponding amount on its bank statement to identify discrepancies.
- **Payment Entry**: A record of a payment made by the company, typically documenting the amount paid, the date, and the recipient of the payment.

Right Answer:
I have worked with Tally ERP, QuickBooks, and SAP.

Right Answer:
Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company. It includes costs such as materials and labor directly used in creating the product. Under Indian Accounting Standards (Ind AS), COGS is accounted for by recognizing the cost of inventory sold during the period, which is calculated as:

COGS = Opening Inventory + Purchases - Closing Inventory.

This ensures that the expenses are matched with the revenues generated from the sales of those goods.

Right Answer:
In a Trading Account, items typically include:

- Sales Revenue
- Opening Stock
- Purchases
- Closing Stock
- Direct Expenses (e.g., freight, direct labor, and manufacturing supplies)

In a Profit and Loss Account, items usually include:

- Gross Profit (from Trading Account)
- Operating Expenses (e.g., rent, salaries, utilities)
- Other Income and Expenses
- Net Profit or Loss

Direct expenses are costs directly associated with the production of goods sold, such as:

- Direct labor costs
- Raw materials
- Freight-in costs
- Factory supplies used in production

Right Answer:
To deal with customers effectively, listen actively to their needs, communicate clearly, be polite and respectful, provide timely responses, and follow up to ensure their satisfaction.

Right Answer:
To manage Bank Reconciliation Statements (BRS), follow these steps:

1. **Collect Bank Statements**: Obtain the latest bank statement from the bank.
2. **Prepare Cash Book**: Have your cash book or ledger ready for the same period.
3. **Compare Transactions**: Match the transactions in the cash book with those in the bank statement.
4. **Identify Discrepancies**: Note any differences, such as outstanding checks, deposits in transit, or bank fees.
5. **Adjust Entries**: Make necessary adjustments in the cash book for any discrepancies identified.
6. **Reconcile Balances**: Ensure that the adjusted cash book balance matches the bank statement balance.
7. **Document Findings**: Keep a record of the reconciliation process and any adjustments made for future reference.
8. **Review Regularly**: Perform BRS regularly (monthly or quarterly) to maintain accurate records.

Right Answer:
To maintain creditors' accounts, regularly record all transactions related to purchases and payments, ensure accurate entry of invoices and credit notes, reconcile statements from suppliers, monitor payment due dates, and maintain clear communication with creditors regarding any discrepancies or payment issues.

Right Answer:
Sales tax is typically payable on a monthly or quarterly basis, depending on the jurisdiction, while TDS (Tax Deducted at Source) is usually payable on a monthly basis, by the 7th of the following month.