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Inventory Accountant Interview
Questions

25 Questions and Answers by
| Brian Schuchart is a CPA with fourteen years of experience, including nine years in financial strategy roles. He has held the roles of auditor, staff accountant, manager of financial planning and analysis and senior finance partner.

Question 1 of 25

What are the differences between accrual accounting and cash accounting?

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Inventory Accountant Interview Questions

  1. 1.

    What are the differences between accrual accounting and cash accounting?

      Accrual basis accounting and cash basis accounting are the two most commonly used accounting methodologies. Any accountant should understand the differences between the two methodologies and understand that most companies use accrual accounting, as it presents a clearer picture of financial health.

      Brian's Answer

      "The main difference between accrual accounting and cash accounting is when revenue and expenses are recognized. Under cash basis accounting, revenue and expenses are recognized when cash is received and paid. Under accrual accounting, revenue is recognized in the period it is earned, and expenses are recognized in the period they are incurred. While cash basis accounting is easier to implement, accrual accounting is used by most businesses and presents a clearer picture of a company's overall financial health."

  2. 2.

    Do you have experience explaining complex accounting concepts to non-financial personnel?

      Accountants will frequently interact with other departments within the company. Many times, the employees in these departments do not have extensive knowledge of accounting concepts and terminology. This question is an opportunity to highlight your communication skills.

      Brian's Answer

      "Yes, in my previous role I was able to interact with non-finance personnel when I would meet with the marketing team to review their results each month. They didn't have a strong understanding of accounting principles, so I tried to 'speak their language' as much as possible when discussing their department's results vs. budget. I believe I have the ability to communicate effectively with all personnel in an organization."

  3. 3.

    Why did you want to become an accountant?

      This question is a way for the interviewer to find out a little bit about your interests and background. Be honest and direct - don't give a phony answer that the interviewer will see through.

      Brian's Answer

      "Since I was young, I have always liked math and have been good with numbers. I took an accounting class in high school and really enjoyed it - the concepts came naturally to me. I also aspire to be a key contributor to an organization, and I know that the inventory accountant role is visible to leadership."

  4. 4.

    What are the steps involved in a physical inventory count?

      Periodic inventory counts are crucial for businesses with material inventory value. The physical count ensures that the value of inventory, as reflected on the books, is materially close to the actual value. Most audits require inventory counts, and companies often view the counts as good business practice.

      Brian's Answer

      "First, the count must be planned. This includes setting dates, identifying inventory to count, training staff, and ensuring the appropriate scanners and other technology is set up. Next, on the date of the count, all inventory activities must be frozen so that the records are static. Then, the physical inventory count is completed using printed count sheets. Finally, any discrepancies are investigated and resolved."

  5. 5.

    What are the different inventory valuation methods?

      The goal of inventory valuation is to assign a monetary value to inventory that the company owns that has not yet been sold. There are generally four accepted inventory valuation methods: Specific Identification, First In, First Out (FIFO), Last In, First Out (LIFO) and Weighted Average Cost. Each has its own advantages and disadvantages, so be prepared to briefly speak to each.

      Brian's Answer

      "There are four widely accepted inventory valuation methods. The most clear cut is specific identification, where the cost of every item in inventory is specifically tracked. This method is best used when the company sells a low volume of high value items (such as rare cars). Next is First-In, First-Out, which presumes the first inventory purchased by the company is the first sold to the customer. Most companies use FIFO to value their inventory. Last-In, First-Out assumes the newest inventory in stock is the first sold. Finally, there's weighted average cost, which takes the cost of all products in inventory divided by the number of units. This method is used when the products a company sells are very similar."

  6. 6.

    Are you willing to work extra hours if needed during busier times?

      The life of an accountant is tied to the month-end close calendar, which could result in a schedule that is 'lumpy' and not a typical 9-5. The candidate should expect there to be some additional time worked during busier times and should highlight that they are flexible.

      Brian's Answer

      "Yes, I am willing to work extra hours, as needed. I understand that the work required ramps up during month-end close, tax filings, and other busier times. I am happy to be flexible and work as needed to make sure the job gets done. "

  7. 7.

    Are you proficient in Excel?

      Excel proficiency is a must for not only an inventory accountant, but any role in accounting. At a minimum, an accountant should be able to sort through large amounts of data, and analyze that data using pivot tables.

      Brian's Answer

      "Yes, I am proficient in Excel. I have used Excel extensively throughout my time in school, as well as in my previous role. For example, I used data sorting and filtering, as well as pivot tables, to organize large amounts of data. Additionally, I have experience using V-Lookups and H-Lookups to pull together analysis for our external auditors. I have even dipped my toes into data visualization software such as Tableau, but that is a skill I would like to continue to nurture."

  8. 8.

    What are some methods you use to self-review your work?

      The interviewer is trying to evaluate your ability to check your own work and, as a result, save your manager precious time by catching mistakes before they reach his or her desk. Give specific examples of procedures you have implemented in previous roles to catch mistakes.

      Brian's Answer

      "Being able to self-review my work and catch mistakes is something I take very seriously. An accountant spends a lot of time in the details, so it is sometimes difficult to catch errors. Given this, I implement checklists that require me to tie out balances, subtotal transactions, and double check other to-dos before I move forward in the close process. In a way, I am auditing my work to catch any mistakes or errors. This not only saves me time in the long run, but it also saves my manager time, as there is less back and forth resolving issues."

  9. 9.

    What are some examples of internal controls that impact inventory?

      Internal controls for inventory is vital for businesses of any size, as the company needs to make sure they have goods available to sell to their customers. There are internal controls that help with tracking (bar-codes, inventory numbers), security (locks, security codes), and audits (physical inventory counts, obsolescence reviews).

      Brian's Answer

      "There are many examples of internal controls that would impact my role. For example, there are audit controls that help with auditing the inventory balance, such as physical inventory counts and obsolescence reviews. Other controls center around asset security, such as locks and security clearances. Finally, there are tracking controls such as barcode setup and inventory numbering systems."

  10. 10.

    What is your comfort level with interacting and communicating with senior leadership?

      An inventory accountant role is staff level but is unique in that the role interacts regularly with senior leadership. Highlight that you not only have experience presenting in front of leadership, but also that you are comfortable doing it. Be specific with what you presented. For example, monthly results, pitches for new initiatives, etc.

      Brian's Answer

      "I have ample experience getting in front of leadership and presenting. In my previous role, I would present to the CEO, CFO, and other senior leaders during our monthly Finance Review meetings. I always felt the need to prepare in advance for any questions that might arise and would promptly follow-up on anything that developed during those meetings."

  11. 11.

    Imagine you are reviewing inventory balances vs last year. What would you expect to happen to ending inventory, if sales were lower than last year, and receipts were higher than last year?

      This is a question that gauges whether you understand how different key metrics drive inventory changes. In this specific example, lower sales and higher receipts would both cause inventory to grow vs last year.

      Brian's Answer

      "In this example, I would expect inventory to grow at a higher rate than it did last year. Higher receipts means more product coming into inventory, and lower sales means fewer products leaving inventory. This would be a concern to me, as higher inventory balances would indicate a higher obsolescence risk."

  12. 12.

    How do you mitigate and manage stress?

      The life of an accountant can be stressful, especially during busier times like monthly close and the annual audit. The interviewer wants to gain insight into how you react to stressful situations.

      Brian's Answer

      "Due to tight deadlines and the demands of the inventory accountant role, stress is inevitable. However, there are steps I take to help mitigate stress. First, I try to be as organized as possible. I am constantly prioritizing my workload to make sure time-sensitive tasks are handled before they are due. Next, I try to leave work at work. When not at work, I enjoy hiking, cooking, and traveling. Being able to enjoy these activities makes me feel calmer and rejuvenated while at work."

  13. 13.

    What are 'Days Inventory on Hand', and what is indicated when days on hand grows?

      This is a question that gauges whether you understand metrics and can use them to catch trends in the business. Days Inventory on Hand is a metric that measures the health of the inventory asset. A high or growing metric indicates that there are problems selling through inventory.

      Brian's Answer

      "Days Inventory on Hand is an important metric that measures the health of inventory. The metric indicates how many days of cost of goods sold are hung up in inventory at any given time. A low number of days indicates that the company is efficiently selling through inventory. A growing number of days indicates that there may be some issues with sell-through, which could lead to obsolescence issues in the future. Given this, sales strategy should be adjusted if Inventory DOH is growing."

  14. 14.

    What have you done at your previous job to reduce costs or save time?

      The interviewer wants to know if you have the ability to improve processes. Speak to a specific action you took that resulted in reduced costs, saved time, or better insights gained.

      Brian's Answer

      "My last role was bookkeeper for a small, established company. However, my predecessor did not have established procedures in place and it sounded like he had made constant mistakes. One of the first things I did when I started was I made a monthly checklist that detailed all the steps I took during the monthly close. Included in these steps were 'checks' I performed to self-review my work. The checklist served as a cover sheet that I would hand off to my manager so she would know exactly what steps I completed. This led to increased efficiency, as we estimated it saved 4-6 hours a month in error corrections."

  15. 15.

    What accounting software are you familiar with?

      Speak specifically to the accounting systems you have used and some of the functions you performed. Many job descriptions specifically state which accounting software the company uses. If any event, make sure to highlight that you are quick to learn new software systems.

      Brian's Answer

      "In my last role, I used SAP to book journal entries and run queries. As an independent contractor, I also used Quickbooks to complete monthly bookkeeping for various clients. I used that software to book journal entries, complete bank reconciliations, run monthly reports, and invoice customers. Since I have an underlying understanding of accounting, I am easily able to learn new software packages."

  16. 16.

    What do you do when you don’t know the answer to something?

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  17. 17.

    Are you a detail-oriented person?

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  18. 18.

    What are the steps involved in the accounting close process?

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  19. 19.

    Do you have experience working with external auditors?

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  20. 20.

    How do you manage your manager? In other words, what steps do you take to make sure you get what you need from your boss and make both your lives easier?

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  21. 21.

    Are you open to travel with this position?

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  22. 22.

    How would you handle working in an increasingly remote work environment?

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  23. 23.

    What are the three main financial statements, and what do they indicate about an organization’s financial position?

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  24. 24.

    What is obsolescence expense?

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  25. 25.

    What have you done recently to become a better accountant?

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