Top 30 Accounting and Taxation Interview Questions and Answers in 2024

Download PDF

Accounting and Taxation courses are topics that would never rust. Accounting requires an interest in finance and calculations. To crack Accounting and taxation interviews various skills are required. 

If you are set to crack your interview on Accounting and Taxation then these are the 30 must account and taxation you need to go through.

Also, good Accounting and Taxation Courses would surely improve your chances.

Here are the top 30 Accounting and Taxation Interview Questions and Answers in 2021:

Ans: As simple as this question seems, answering it in an effective way is all that matters. Your first impression is the last impression. Delivering your introduction in the right way would help you secure the job. While giving your introduction, steer the conversation towards your deep interest in accounting and taxation. Mention the incidents of your life which included calculations. How accounting and taxation became your interest and finally your sole passion. Impressing the employer with your introduction is a worthy shot, indeed.

2. Tell me About the Different Types of Accounting.

Ans: The different accounting types are:

1. Financial Accounting: It records information related to the financial status of a company.

2. Administrative Accounting: It is focused on the company’s administrative aspects. This type of accounting is very useful in making plans and actions for the resources used. It is used to assess the fulfillment of objectives and improve the implemented strategy of a company.

3. Cost Accounting: This accounting type is specifically focused on companies that have an industrial nature. This accounting takes care of the analysis of unit costs of production. Analyzing the sales and the general production process that a company carries out. 

4. Tax accounting: This accounting focuses on registering and preparing reports about tax returns and tax payments.

5. Management Accounting: It is a bigger form of cost accounting as it records all the financial and economic information of a company. It makes long-term and short-term finance-related decisions.

3. You have Worked on Which Accounting and Taxation Platforms? Which One Offered the Eest Experience?

Ans: Giving an insight into your app experience is important. Mention the accounting and taxation platforms you have worked in like the Microsoft Dynamics GP, the QuickBooks, etc.

Tell them about the platform with which you were the most comfortable.

4. How to Maintain Accounting Accuracy?

Ans: Account Accuracy maintenance for an organization is an important activity. Inaccuracy in this concept can lead to huge losses for the firm. Various tools and resources can reduce errors. One such tool is Microsoft Excel. It is a highly compatible tool.

5. What is Working Capital?

Ans: Working capital is the difference between current liabilities from current assets, that are used in day-to-day trading.

If the accounting scheme is simple then the concept of working capital focuses on the capital resources the company counts on in a short term to operate.

These resources include the company’s cash, portfolio of finance-related products, and other investments that the company holds.

6. How to Improve a Company’s Working Capital Flow?

Ans: My suggestion to improve the company’s working capital flow would be the stock in hand. The stock is the component of working capital that we can control. 

We can pressurize our debaters to pay back quickly but we can’t control them because they are separate legal entities. Also, they are the ones providing us with business.

We can put off the payment to our suppliers but it will eventually ruin business relationships and decrease goodwill in the industry. A delay in payment can lead to a holding up on the supplier’s side.

Funds in the banks help but they come at a cost.

In the end, it is best to stick to the stocks.  Over-stock should be avoided and the stock turnover rate should be high to have better working capital. 

Although, this answer is generic as companies like telecommunications and eCommerce work with negative – working capital. So, before answering, be sure about the company you mention. 

7. Differentiate Between ‘Accounts Payable’ and ‘Accounts Receivable’.

Ans: Accounting and taxation include an important feature known as account payable. Account payable is the amount a company holds. It is purchased goods and services from a supplier. 

Account receivable is the amount the company has the right to collect as it sells those goods or services to the customers on credit. 

In short, accounts payable are liabilities and accounts receivable are assets.

8. What are the Most Common Mistakes in Accounting?

This is a really important accounting and taxation interview question. 

The most common mistakes of Accounting are as follows:-

• Lack of backup
• Mixing of your personal account with that of the company’s
• Less communication between the accountant and the company.
• Resources are usually misallocated.
• Receipts are misplaced
• Manual accounting hinders efficiency
• Accounting books are not kept up to date. 

•  

   

  An accounting and taxation course would throw more light on these mistakes.

9. Are you Familiar With the Accounting Standards? How Many Accounting Standard Questions are there in India?

This is a frequently asked question in the accounting and taxation interviews.

Having the knowledge of International accounting standards is really important. Even if you have never worked as an accountant, try getting some information on it.

Being a very vast topic it is impractical to learn it all. It would be fine if you were aware of the latest changes. 

The International Accounting Standards Board has currently issued 41 Accounting standards.

Online accounting and taxation would cover this topic to make you interview-ready.

10. What is the Difference Between a Trial Balance and a Balance Sheet?

Ans: Though both are balance sheets they refer to different things. A trial balance sheet is the list of all balances in an account. It is used to check the arithmetic accuracy in recording and posting. 

A balance sheet is a statement that displays the assets, liabilities, and equities of a company. It is used to ascertain its financial position.

11. How Important is Documentation in Accounting?

Ans: Accounting is like a watchdog of an organisation hence it should be very disciplined.

The accounting team has the responsibility to present a true and fair view to the company’s stakeholders. 

Hence, documentation becomes very important in accounting. Adequate documents must be verified so that an appropriate audit trail can be maintained. It can also be justified whenever necessary. 

Accounting and taxation is in a sense a neat job. You really need to keep your work clean and ordered.

 

 

12 What are the Major Restraints that Can Hamper Reliable and Relevant Financial Statements?

Ans: The major constraints hampering financial statements in accounting and taxation are:-

• No balance between benefits and costs
• Delays lead to irrelevant information
• No balance between qualitative characteristics
• Zero clarity in fair and true view presentation.

13. Mention the Statements for the Golden Rules of Accounting.

Ans: Accounting and taxation has its own set of golden rules. They are based on debit and credit. 

The three golden rules of accounting and taxation are:-

• Debit the receiver and credit the giver.
• Debit what comes in and credit what goes out
• Debit all expenses and losses, and credit all incomes and gains.

14. Elaborate on your Statement ‘Debit the Receiver and Credit the Giver’

Ans: This is yet another frequently asked question in an accounting and taxation interview.

The answer to it should be

This rule is used in the case of personal accounts. Whenever a person is giving any amount either in cash or by using a cheque to an organization, it is an inflow and hence is counted as credit in the books of accounts. That person is credited. 

An organization needs to credit the person who is paying debt when it receives money in the form of cash or cheque.

15. Give us Three Cases Where Excel Will Make Your Life Easy.

Ans: Microsoft Excel is a highly effective tool. It is one of the basic tools of accounting and taxation.

Many reports can be extracted from the software.

Though reports in specific format are not possible by the Software. That’s where you use Excel.

In Excel, data can be stored, and filtered, redundant files can be easily removed, and data can be presented in a custom format. 

It is also required in multiple link data sets. Therefore, different reports can be extracted from the software and then we can use the search function and can be grouped into a single report.

Excel usage becomes most important for doing various reconciliations. The Software can’t be used for performing all these tasks. 

Let’s suppose, I need to reconcile the vendor ledger balance. I will put the ledger in the software, transfer it to Excel, and get the same Vendor Excel for the Ledger. All these reconciliations can be done in Excel.

Excel will truly help us excel in Accounting and Taxation.

16. What is Deterred Tax and how is its Value Created?

Ans: In accounting and taxation, a deferred tax asset is when the tax amount is paid or the amount is carried forward. This carried-forward amount can not still be recognized in the income statement. This value is created by taking the difference between the taxable income and book income.

Accounting and taxation courses would throw more light on the topic of taxes.

 

 

Ans: Goods Service Tax as known as GST is the largest indirect tax reform in India. It is an indirect tax other than the Income Tax. 

The seller charges GST to the customer on the goods or services he provides. This value is then deposited by the seller to the Government. The Government has fixed various GST rates on the wide variety of goods and services provided.

18. What Fictitious Assets?

Ans: Fictitious means not true or to be a fabricated tale.

A fictitious asset means an asset that is intangible and the benefits of this asset are derived over a longer period.

Examples of fictitious assets can be goodwill, deferred revenue, rights, preliminary expenses, other expenses, accumulated loss, and many more.

19. What is the Departmental Accounting System and What is the Perpetual Inventory System?

Ans: The departmental accounting system is a part of accounting and taxation. This is a type of accounting information that records all the financial activities and information of a department. This system is useful in gauging the profit and efficiency of each department.

Perpetual Inventory system is a methodology that involves recording the purchase or sale of inventory, right after using the expertise asset management software and computerized point-of-view sale systems. 

20. What are the Bills Receivable Also tell Something About Balancing.

Ans: Bills are frequent visitors in accounting and taxation.

Bill receivable is the proceeds or payment. It is received by a merchant or a company from their customers. 

 Balancing means equating both the credit as well as the debit sides of an account.

21. What is TDS? How do you Show TDS on a Balance Sheet?

Ans: TDS stands for Tax Deducted at Source. It is a concept that aims at collecting tax on every source of income. 

TDS is shown in the assets section on a balance sheet. It is present right after the head’s current asset.

22. A Company is Showing Positive Cash Flows, yet can it be in Trouble?

Ans: Positive cash flows would not guarantee a company’s success.

If a company is showing an unsustainable improvement in its working capital and it involves a lack of revenue going forward in the pipeline.

So, positive cash flows don’t mean that a company is out of trouble.

23. Differentiate Between Inactive and Dormant Accounts.

Ans: Inactive accounts are shut and they are closed and not used in the future.

Dormant accounts on the other hand are not currently in use but can be called into action in the future.

24. If Some Organization has three Bank Accounts for Processing Their Payments, What is the Minimum Number of Ledgers it Needs?

Ans: In such a situation the organization would require three ledgers. One for each account. This will initiate proper accounting and reconciliation processes.

25. What are Some Ways to Find out About bad Debts?

Ans: Bad debts can be estimated in the following ways:-

• Outstanding accounts percentages
• Analysis of aging
• Credit sales percentage

Q.26 What is the Acid-test ratio equation in accounting?

Ans: Acid-test ratio equation in accounting:-

Acid-test ratio= (Current assets – the inventory)/ Current liabilities

27. Name Some Popular Accounting Applications. Which one is Your Favorite and Why?

Ans: Accounting applications that I am familiar with are Software, CGram, Microsoft Accounting Professional, FinancialForce, Microsoft Dynamics AX, and Microsoft Small Business Financials.

My personal favorite application is the Microsoft Accounting Professional. Its processing is reliable and fast, hence, it saves time and increases proficiency. 

28. What is a Bank Reconciliation Statement?

Ans: BRS or Bank Reconciliation Statement is a form that allows us to compare our personal bank account record to that of the banks. When the passbook balance differs from the cash book balance then BRS is prepared. 

29. What is the Basic Accounting Equation?

Ans: Accounting is all about assets, liabilities, and capital.

The equation for basic accounting is as follows:-

Assets= Liabilities + Owner Equity.

30. What is CMM?

Ans: CMM is also known as the Capability Maturity Model. It is a document that provides a model and the six elements of infrastructure used for measuring the effectiveness and capability of an organization’s process of finance.

Here are the top 30 Accounting and Taxation interview questions and answers in 2021.

More About Accounting and Taxation:

Accounting and taxation is a really interesting field. If you are interested in finance then accounting and taxation is the right thing for you. 

Accounts require a stronghold in maths. Accounting offers a lot of specialization in a variety of fields. Taxation requires strong research skills while taking part in Taxation you should be ever ready to adjust to the changing schemes and ideologies. 

Accounting and taxation courses would help shed light on this vast topic. These courses have skilled trainers who are themselves experienced practitioners in the industry. Training under experts will help accelerate your skills.

Accounting and Tax courses would cover Accounting basics, Tax basics, Types of accounting, types of tax, GST, Terminology related to accounting and taxation calculation of taxes, and many more topics.

Is an Online Accounting and Taxation Course Worth it?

Yes, it is. Online education has become the new normal. Online accounting and taxation courses are just as good as the physical. They are secure with their terms and conditions. Online courses are good links in today’s world. They help connect you with experts and co-peers from around the world. These courses provide wider knowledge.

Their knowledge is not limited to a place. Online courses for Accounting and Taxation use the latest technology. The applications used to make the learning more interactive. Online courses aim to provide you with hands-on training.

Accounting and taxation courses would surely increase your skills and make you more ready for the interview. They even give tips and advice for ‘the big day’. 

Online accounting and taxation courses are accessible anytime and from anywhere. All you require is a network connection and your mobile or laptop. 

Online courses enable anytime access to the instructor for doubts resolution. Online accounting and taxation courses are really worth it if you want to crack your interview.

Tips for Improving Interview Preparation

Improving your interview preparation for account-related positions involves several key steps:

1. Understand the Job Description: Tailor your interview preparation to highlight your relevant experience and expertise in accounting principles, financial analysis, and related areas.
2. Research the Company: Understanding the company’s background and goals will enable you to Accounting and Taxation Interview Questions and Answers and demonstrate your interest in the organization.
3. Review Common Interview Questions: Practice common interview questions for accounting is essential to face the interview at any level of opportunity and in any organization, such as:

• Tell me about yourself.
• Describe your experience with accounting analysis or financial reports.
• How do you handle tight deadlines and pressure?
• How can you resolve the accounting problem you encountered and how you resolve it?
• What accounting software are you proficient in?
• How do you ensure accuracy and attention to detail in your work?

1. Brush Up on Technical Skills: Review fundamental accounting principles, financial statements, and relevant accounting standards. 
2. Practice Mock Interviews: Conduct mock interviews with friends, family members, or mentors to simulate the interview experience and receive feedback on your responses, body language, and overall presentation. This will help you to identify areas for improvement.
3. Stay Updated: Keep abreast of current trends, developments, and regulations in the accounting field. Participate in relevant professional organizations for better experience and excel in your accounting skills.
4. Ask Questions: Prepare thoughtful questions to ask the interviewer about the role, team dynamics, career advancement opportunities, and company culture. 

Following the above steps and dedicating time to thorough preparation, you can improve your interview performance and increase your chances of success in securing your position.

Conclusion

Accounting and taxation is really a wide field. To be ready for the interview try out some Accounting and Taxation courses. 

Appearing for an interview does not mean that you can cram some answers and speak them in front of the employer.

Interviews require confidence to crack. Your body posture, to dress up all matter for the job. Impressing the employer is the main goal. 

Interviews require straightforward answers. Don’t beat around the bush. Give each answer politely and in brief. Don’t stretch things out. The employer can be let down by vague answers.

Learn these questions and answers but don’t forget to do your own R and D. The employer would love to poke into how much you really know. If your confidence dwindles then your winning chances are lost.

Interviews require some personal information. Get your perfect resume ready. Your courses can help you prepare one. Carrying the certificates of your achievements in this field can also be a great choice. 

All the above questions are provided according to the 2021 format. Reading some more articles on the really difficult questions is advisable.

Interview Tips:

• Go through all the questions and answers thoroughly
• Also, be ready with the personal questions
• Practice in front of a mirror
• Pack your essentials carefully. Don’t forget the documents.
• Carry copies of your resume
• Get ready on time and be punctual
• Travel to the interview and stop by yourself
• Dress professionally
• Be calm until your turn. Try not to fiddle.
• Put up your sense of humor and brighten your face with a smile.
• Leave the shyness at home
• Maintain your confidence and keep the eye contact
• Only sit if a seat is offered
• Sit straight-backed and in full attention mode
• Pay attention to each member of the panel
• Try not to think over each question for a long time
• Listen carefully and even answer the difficult questions
• Don’t try to rush
• Ask to be pardoned if a question is unclear
• Remember to display your true self
• Don’t beat around the bush
• Earn the confidence of the employer

Always remember if you trust yourself then others will trust you too. Self-confidence is very much required. Believe in yourself and you can surely nail it. Keep working hard and luck will surely favour you. Remember – God helps those who help themselves.

I sincerely wish you loads of luck with the interview.

Recommended Reads:-

• Top 10 Business Accounting and Taxation (BAT) Courses Online
  
• Top 10 Business Accounting And Taxation (BAT) Courses In Delhi
• Top Accounting Interview Questions with Answers
• Top 10 Business Accounting and Taxation (BAT) Courses in Mumbai
• Top 10 Business Accounting And Taxation Course in Bangalore
• Top 10 Business Accounting and Taxation (BAT) Courses in Chennai
• Top 10 Best Business Accounting and Taxation (BAT) Courses in India

Also, check this video:

FAQs

Q-1. Which is the Best Course for Accounting and taxation?

Ans. Henry Harvin Accounting and Taxation Course

Q-2.What is the Scope of a Career in Tax Accounting?

Ans. Tax accounting is a field that is growing rapidly. It sure offers a lot of opportunities.

Q-3. Is Accounting Stressful?

Ans. It indeed is. But it is also really interesting which helps in leveling down the stress.

Q-4. Is the salary rate of accountants high?

Ans. It is fairly very high

Q-5. How to become a tax strategist?

Ans. Tax strategists are experts who gather their knowledge through professional experience. Tax strategists usually come from academic backgrounds in accounting, business, law, or taxation.