Golden Book of Accounting & Finance Interviews with Exam Questions and Correct Answers 2026 Updated

Introduction Introduces the purpose of the eBook, its target audience, and provides initial insights into the accounting and finance interview process. Index - Part I Provides a list of questions covered in Part I related to real life accounting and finance interview scenarios. Table of Contents Lists questions that will be answered in the subsequent sections, focusing on various accounting and finance concepts. Real Life F&A Interview Questions Begins the series of questions and answers covering fundamental accounting rules, types, equations, and financial statements. Ques. 1 - What are Three Golden Rules of Accounting? Describes the fundamental principles of accounting that govern the debits and credits in bookkeeping. Ques. 2 - What are Three Main Types of Accounts in Accounting? Explores the Real, Personal, and Nominal accounts, essential for identifying transaction types. Ques. 3 - Why is Depreciation Not Charged on Land? Explains the accounting rationale for not depreciating land, supported by examples. Ques. 4 - What is Working Capital, How is it Calculated? Defines working capital and details its calculation within business operations. Ques. 5 - What are the Three Main Financial Statements? Summarizes the core financial statements used to assess a company's financial status. Ques. 6 - What is an Accounting Equation or Balance Sheet Equation? Describes the foundational equation of accounting, Assets = Capital + Liabilities. Ques. 7 - Why is Closing Stock Not Shown in Trial Balance? Clarifies why closing stock is omitted from the trial balance during accounting periods. Ques. 8 - What is an Accounting Cycle or Accounting Trail? Outlines the step-by-step process of the accounting cycle leading to the preparation of financial statements. Ques. 9 - What is Capital, Type of Account & where is it Shown in Financial Statements? Discusses the nature of capital, its categorization, and balance sheet presentation. Ques. 10 - What are Fictitious Assets? Defines fictitious assets and provides examples of circumstances necessitating their categorization. Ques. 11 - What is the Journal Entry for Goods Given for Charity or Distributed as Free Samples? Explains the journal entries involved when goods are offered for charitable purposes or samples. Ques. 12 - What is Depreciation, Types of Depreciation & Journal Entry for Depreciation? Covers the concept, types, and accounting entries associated with asset depreciation. Ques. 13 - What are Contingent Liabilities? Defines potential liabilities dependent on certain future events and their disclosures. Ques. 14 - What is the Difference between Reserves & Provisions? Differentiates reserves from provisions, highlighting their purposes and recognition. Ques. 15 - What are Preliminary Expenses & where is it Shown in the Financial Statements? Describes how preliminary expenses are treated in accounting and where they appear in balance sheets. Ques. 16 - What is Amortization? Discusses the process of gradually writing off the initial cost of intangible assets. Ques. 17 - What is a Compound Journal Entry, Give Example? Explains the concept of compound journal entries, including examples and applications. Ques. 18 - What is Deferred Revenue Expenditure? Describes expenditures with benefits extending beyond the accounting period in which incurred. Ques. 19 - What are Current Assets & Current Liabilities, Where are they shown in the Financial Statements? Defines current assets and liabilities, detailing balance sheet presentation. Ques. 20 - What are Tangible & Intangible Assets? Compares tangible and intangible assets, including their properties and examples. Ques. 21 - What is Sales Ledger Control Account & Purchase Ledger Control Account? Clarifies the purposes and uses of sales and purchase ledger control accounts. Ques. 22 - What is a Bank Reconciliation Statement & why is it Prepared? Discusses the purpose and preparation of bank reconciliation statements to ensure account accuracy. Ques. 23 - What are Bad-Debts & Journal Entry for Bad-Debts? Covers the handling and accounting for bad debts within a financial period. Ques. 24 - Explain Provision for Doubtful Debts, what is its Journal Entry? Elucidates provisions for doubtful debts by assessing potential credit risks and adjustments. Ques. 25 - What are Chart of Accounts? Explains the organization and roles of accounts in a general ledger framework. Ques. 26 - What are Contingent Assets? Describes assets that may arise based on uncertain future events and their recognition protocols. Ques. 27 - What are Drawings, Type of Account & where is it shown in Financial Statements & what is its Journal Entry? Discusses personal funds drawn from business accounts and appropriate accounting treatments. Ques. 28 - What is a Contra Account? Explains contra accounts and their effect on balances and financial statements. Ques. 29 - What is a Debit and Credit Note, Journal Entries for Both? Clarifies the purposes and impacts of debit and credit notes on transactions. Ques. 30 - What is COGS (cost of goods sold) COGS & How to Calculate COGS? Defines COGS and elucidates its calculation in business accounting contexts. Ques. 31 - How to Make a Trial Balance From Ledger Balances? Explains the process and purpose of compiling a trial balance from ledger entries. Ques. 32 - What do you know about SOX (Sarbanes-Oxley Act)? Describes the Sarbanes-Oxley Act's impact on financial regulations and compliance standards. Ques. 33 - What is a Cost Center, Service Center & Profit Center? Explains different types of centers and their roles in cost management within organizations. Ques. 34 - What is Purchase Order & Different Types of Purchase Orders? Outlines the types and uses of purchase orders in procurement processes. Ques. 35 - What is a Suspense Account? Describes the temporary use of suspense accounts while awaiting transaction resolution. Ques. 36 - Explain Accrued Income & Income Received in Advance along with their Journal Entry? Covers the concepts of accrued income and advance receipts, including journal entries. Ques. 37 - Explain Outstanding Expenses & Prepaid Expenses along with their Journal Entry? Describes the recognition of outstanding and prepaid expenses within accounting periods. Ques. 38 - What are Accruals? Defines and explains accruals and their treatment in accounting documentation. Ques. 39 - What is Cash Discount & Trade Discount with Examples? Differentiates between cash and trade discounts with practical accounting examples. Ques. 40 - What is the difference between Direct and Indirect Expenses? Explores direct and indirect expenses and their allocations in financial statements.