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Accounting Interview Questions

33 Accounting Interview Questions
Question 1 of 33
Tell me about LIFO and FIFO?
How to Answer
For this question, start off deciding in your professional experience if FiFO or LIFO method was used. Then give the definitions and example.

Anyone that is new in their career and does not have any experience, then be honest with the interviewer at the initial part of the question, but word it like this...As I'm only 2 years into my career, I have not been exposed to LIFO or FIFO, yet, but I understand the two inventory processes very well. LIFO means ....and FIFO means ....Most companies favor the LIFO methods especially manufacturing and retail industry. With LIFO...

Entry Level l Example
"FIFO stands for First In and First Out. Basically, here the first piece of data to be stored is the first one to be accessed. Hence, it can be said that the data is accessed in the order that it was stored. Think of FIFO as a line, where the first person to get in the line is the first person to get service, the second person in line gets service second, and so on and so forth. "
Experience Example
"If a company that sells products (retailer, manufacturer, etc.) finds the cost of its items increasing, the use of LIFO will result in less taxable income and less income tax payments than FIFO. Over a long period of time, or when costs increase dramatically, the lower income tax payments will be significant. FIFO and LIFO are exact opposite accounting methods that deliver dramatically different results. If costs are increasing, with FIFO you pay a larger amount of income taxes in the near-term since the first items sold are the least expensive. If costs are increasing, with LIFO you pay fewer income taxes in the near-term since the last items sold are the most expensive and you report the fewest profits. Another reason for a company to use the LIFO cost flow assumption is to improve the matching of costs with sales. Under LIFO, the recent costs will be matched on the income statement with the recent sales revenues. (Recall that LIFO means the "last costs in" will be the "first costs out" of inventory and onto the income statement as the cost of goods sold.)Let's illustrate this with an example. A new company purchases aluminum for $1.00 per pound and sells it for $1.20 per pound. After several months, the company has 10,000 pounds of aluminum in inventory at a cost of $10,000. Its next purchase of 20,000 pounds came with a cost increase: the cost of aluminum increased to $1.10 per pound. The company immediately increased its selling price by ten cents per pound and sold 10,000 pounds of aluminum for $1.30 per pound. The company's income statement will report sales of $13,000. The company must now match the cost of the 10,000 pounds of aluminum with the $13,000 of sales. Under LIFO, the cost of goods sold will be $11,000 (10,000 lbs. sold X the recent cost of $1.10 per lb.). Using FIFO, the cost of goods sold will be $10,000 (10,000 lbs. sold X the first or older cost of $1.00 per lb.). How much gross profit did the company actually earn? Did it earn $2,000 ($13,000 - $11,000) as LIFO indicated? Or, did the company earn $3,000 ($13,000 - $10,000) as indicated by FIFO? Business-savvy people will say the company earned only $2,000 from its main operating activity of buying and selling aluminum. They argue that the true profit is the amount remaining after you replace the 10,000 pounds of aluminum that was sold. If it will cost $1.10 per pound to replace the aluminum that was sold, the true profit is $2,000. The $3,000 computed under FIFO includes $1,000 of phantom or illusory profits. (In other words, the company was lucky to be holding 10,000 pounds of aluminum when the aluminum market increased by ten cents per pound.) In our example, LIFO will mean $1,000 less of taxable income and $400 less in tax payments for a corporation with a combined federal and state income tax rate of 40%. That's good for the company's cash flow. It will help the company meet its payments to its suppliers for the higher costing aluminum. It means that whenever the inventory will be reported as sold (either after conversion to finished goods or as it is) its cost will be taken equal to the cost of the oldest inventory present in the stock. This, in turn, means that the cost of inventory sold as reported on the Profit and Loss Statement will be taken as that of the oldest inventory present in the stock. On the other hand, on the Balance Sheet, the cost of the inventory still in stock will be taken equal to the cost of the latest inventory added to the stock."
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Question 2 of 33
Give me examples of internal control procedures that you have developed and maintained?
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How to Answer
This is a good question to test a persons knowledge of SOX and SOD's.

This answer does not need to be longwinded. Give an example, and if you do not have personal testimony, then give an example of one the was implemented are your business.

Example: When I first started with company XYZ, all users had access to the financial module in the accounting system, but when the Controller started, access was only limited to people within the department.
Entry Level Example
"As an Accounting Clerk, I have many ideas to make improvements to how I do my job. But, there was an employee was talking to me and just happened to mention they were able to view how much the president spends on his personal and business accounts. The employee should never have had user permissions to this information, and I went and told the President that all Users and their access, really should be reviewed. I informed him that an employee saw some information that was not pertinent to their job. He agreed and had the Controller review the user permissions ASAP. The result was, several employees had access removed and the Controller established new internal controls for quarterly reviews of users access. "
Experience Example
"As a Senior Manager of Accounting it's my job to ensure internal controls are being followed and to establish new ones when necessary. About 4 years ago, a situation was brought to my attention by an employee who was working on reconciling the cash accounts as he does firs thing in the morning, and I would review, sign and date the daily cash reconciliations. Before he ever got started he asked me if I had viewed the online banking system. I did not, and we both new that somebody else had to have accessed the system. This was worrisome, because the only two people with access to make any type of changes to this account was myself and the Sr. Accountant. The two owners had access to view, but not make any account transactions. At this point, I logged into the accounting software and ran an Audit in the accounting program for this user module and found out the one of the owners did log in, but somehow their system access had been changed. We did not know how, but either way, the internal controls that were in place, worked this day and we were able to quickly fix the issue. This is a good example of how fraud can occur within a company, if the internal controls are not in place and checked. But most importantly, to inform the users on the importance of the procedures."
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Question 3 of 33
In which areas of accounting would you say you are the strongest?
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How to Answer
This is a subjective question and one that will be asked (maybe in a different way), but this is the strength vs. weakness question. I would focus on about 2-4 strengths and give an example. Common list of strengths to chose from are:
organizational and planning skills.
perseverance.
persuasive ability.
communication skills.
leadership ability.
stress tolerance.
ability to learn and apply new information and skills.
flexibility.
trustworthy
detailed oriented
reliable
unwavering
ethical
Entry Level Example
"My time management skills are excellent. I'm organised and take pride in excelling at my work. I'm comfortable talking with internal and external customers, along with senior leaders. And I'm efficient at resolving basic accounting problems. "
Experience Example
"My greatest strength is my ability to stay focused on my work and finish tasks in advance of a deadline. I'm not easily distracted, and this means my performance is very strong. This skill will come in handy because I know this is a very busy office under constant deadline pressure. My focus will allow me to meet these deadlines successfully."
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Question 4 of 33
Tell me about the financial forecasting that you have been responsible for?
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How to Answer
Try answering with an example of how you took into consideration the previous year's budget when asked about how you forecast a budget. Include factors that were important to your forecasting, such as the current state of the local and national economies, the demand for your product, competitors and the state of your industry.

If you underestimated the budget needed for supplies one quarter, relate how you dealt with and solved the problem. You might say you were able to reallocate resources from other areas of the budget with minimum impact to solve the problem, for example. Tell the interviewer what you learned from the experience and how you plan to avoid it in the future.
Entry Level Example
"As a response to a request by the finance department of the company to estimate the company's yearly expenses, I provided the yearly payroll forecast. This was a regular practice for the past 4 years of my career. I have been using the yearly employee salary data, along with the forecasts regarding any future hires that may be required by any of the departments. For providing the report, I used Excel although we have been using 'XYZ' system for our payroll calculations"
Experience Example
"I know this example is a long time ago, but it was also the best learning experience I have had when putting together a budget and forecast. In 2009, I was a Plant Controller for a $75m corrugated box plant and the company had forecasted a significant downturn in the economy and provided informed me to decrease all sales revenue by 20%, increase costs across the board by 10%, but increase freight by 25%. The increase to freight, took my sales revenue from a positive $500,000 net income, to a loss. The plant was in East Tennessee, and the annual budget for freight was $7.5m. The plant could not sustain a freight increase of 25% and still be able to operate. The General Manager and I personally visited the 5 closet freight companies and told them that we will sign a dedicated contract with 2 carriers, guranteeing them a certain number of loads to haul a week, if they didn't haul them, we would still pay. The catch was that their prices must remain at current levels and can not increase for 12 months. This was a win win for both parties, since business was already slowing for many trucking companies and this was a guarantee of many coming to them for 12 months. The outcome of this was our plant only sustained a 7% increase in freight and this was due to lanes that the freight company's did not haul. "
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Question 5 of 33
In detail, tell me what Sarbanes-Oxley act has changed accounting?
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Question 6 of 33
Describe to me any account process that you have developed or revised?
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Question 7 of 33
What cost-cutting measure have you been in charge of implementing?
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Question 8 of 33
What's the difference between the Sub-ledger and the General Ledger?
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Question 9 of 33
When looking at the COGS on the P&L statement, what are some examples of variable costs?
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Question 10 of 33
Discuss your experience in financial analysis of your previous companies projects?
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Creators of Accounting Answers and Questions

Ryan Brown
Ryan Brown, is the creator of MockQuestions. He has over ten years experience creating interview questions. His website has helped over 10 million job seekers in their interview preparation.
Bobbi Witt
Bobbi Witt, has been a finance manager for over 15 years, with direct recruiting and hiring experience in her field. Additionally, she helps young graduates prepare for their job searches by reviewing resumes, doing mock interviews, and providing guidance.
First written on: 06/23/2018
Last modified on: 07/30/2018

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Question 11 of 33
Explain to me GAAP?
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Question 12 of 33
How do you keep updated on all the accounting rules and techniques?
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Question 13 of 33
What information is required before approving an invoice for payment?
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Question 14 of 33
What type of auditing experience do you have?
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Question 15 of 33
Do you plan on attaining your CPA?
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Question 16 of 33
What is your knowledge and experience using QuickBooks?
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Question 17 of 33
Give me examples of the accounting reports you have prepared?
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Question 18 of 33
Why have you chosen a career in accounting?
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Question 19 of 33
What courses did you like best in your preparation to be an accountant?
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Question 20 of 33
Tell me about the most challenging tax preparation you have ever done?
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Question 21 of 33
What aspects of accounting do you dislike the most?
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Question 22 of 33
How do you calculate DSO (Days Outstanding)?
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Question 23 of 33
What responsibilities do you have during month-end?
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Question 24 of 33
What types of projects that you work on bring you the most motivation and excitement?
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Question 25 of 33
What ERP systems and accounting softwares have you used?
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Question 26 of 33
What is a Trial Balance? What does an accurate Trial Balance suggest?
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Question 27 of 33
What steps would you take to locate the errors in case Trial Balance disagrees?
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Question 28 of 33
What methods have you used for estimating bad debt?
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Question 29 of 33
What is your experience with developing business metrics?
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Question 30 of 33
How hands-on were you?
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Question 31 of 33
Describe a time when you had to use numerical data or a graph to convince a manager?
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Question 32 of 33
Describe to me one of the biggest mistake you have made on the job?
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Question 33 of 33
How do you ensure that you don't forget details and ensure accuracy when you prepare monthly journal entries, record transactions, etc.?
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About Accounting

August 6th, 2018

Accounting professionals handle all the financial dealings of the company they are working with. Their specific duties may vary depending on the size of the company as well as the industry they are working in. Generally, accounting professionals analyze accounting data, prepare asset and liability reports, document financial transactions, audit documents and recommend financial actions when necessary.

A bachelor's degree in finance, economics, accounting or related fields may be sufficient to get hired by a smaller organization. Larger corporates will only hire applicants with a master's degree in the above fields along with substantial experience. The best way to get the necessary experience is by doing an internship with an experienced accountant. This will help you learn all the duties and responsibilities of the role and also boost your chances of employment.
Most of the questions asked at your interview will be aimed at evaluating your competency and skills in accounting. The interviewer will ask you several questions to gauge your knowledge and skills and also to determine your career goals. How you answer the question about your career goals will speak volumes about how long you are likely to stay on in the job. Most employers are looking for long term employees so you need to be careful how you answer this and all other questions. A look through mock interview questions can prove to be very helpful.

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