As an accountant, you should be able to answer a few key questions about your work. Read more to learn.

 

Here are the most important ones:

1. What Are The Three Types Of Financial Statements?

The balance sheet, the income statement, and the cash flow statement.

2. What Is The Purpose Of A Balance Sheet?

A balance sheet provides an overview of a company’s assets, liabilities, and shareholders’ equity.

3. What Is The Purpose Of An Income Statement?

An income statement shows a company’s revenues and expenses over some time.

4. What Is The Purpose Of A Cash Flow Statement?

A cash flow statement shows how much cash a company has on hand, as well as how much it is generating and spending.

5. What Is The Difference Between Cash And Profit?

Cash is the money that a company has on hand, while profit is the excess of revenue over expenses.

6 What Are Some Common Ratios That Investors Use To Analyze A Company’s Financial Statement?

There are many different ratios that investors use, but some common ones include the price-to-earnings ratio, the debt-to-equity ratio, and the return on equity.

7. What Is The Difference Between Accrual Basis Accounting And Cash Basis Accounting?

Accrual basis accounting recognizes revenues and expenses when they are earned or incurred, regardless of when the money is received or paid. Cash basis accounting only recognizes revenues and expenses when the money is received or paid.

8. What Is Double-Entry Bookkeeping?

Double-entry bookkeeping is a system in which each transaction is recorded in two accounts, one as a debit and once as a credit. This helps to ensure that the books are balanced.

9. What Is A Trial Balance?

A trial balance is a list of all the accounts in a company’s ledger, with the balances for each account. This helps to ensure that the books are balanced.

10. What Is An Audit?

An audit is an examination of a company’s financial statements by an independent party. This is done to ensure that the statements are accurate and free from fraud.

11. What Is Sarbanes-Oxley?

The Sarbanes-Oxley Act is a law that was passed in 2002 in response to the Enron scandal. It imposes stricter requirements on public companies, including the need to have an independent audit committee.

12. What Is Gaap?

GAAP stands for Generally Accepted Accounting Principles. These are the standards that companies must follow when preparing their financial statements.

13. What Is An Adjusted Trial Balance?

An adjusted trial balance is a list of all the accounts in a company’s ledger, with the balances for each account after adjustments have been made. This is done at the end of the accounting period to ensure that the books are accurate.

14. What Is A Closing Entry?

A closing entry is a journal entry made at the end of the accounting period to close out all temporary accounts and transfer their balances to the appropriate permanent account. This ensures that the beginning balance for each new period is accurate.

15. What Is A Post-Closing Trial Balance?

A post-closing trial balance is a list of all the accounts in a company’s ledger, with the balances for each account after the closing entries have been made. This ensures that the books are accurate and ready for the new accounting period.

16. What Is An Asset?

An asset is anything that has value and can be used to generate income. Examples of assets include cash, investments, inventory, and accounts receivable.

17. What Is Liability?

A liability is anything that owes money to another party. Examples of liabilities include loans, credit cards, and accounts payable.

18. What Is Equity?

Equity is the ownership stake that shareholders have in a company. It represents the portion of the company’s assets that are not owned by creditors.

19. What Is The Difference Between Revenue And Income?

Revenue is the total amount of money that a company brings in from sales or other sources. Income is the portion of revenue that remains after all expenses have been paid.

Answering these questions will show potential employers that you have a firm understanding of the role accounting plays in business. It will also demonstrate your ability to think critically about financial data and make sound decisions based on that information.

 

Leave a Comment on Questions Every Accountant Should Be Able To Answer

Leave a Reply

Your email address will not be published. Required fields are marked *