Accounting is an important activity for any business across industries. It is vital to assert, track, control, and manage business growth. That's why organizations hire people with good knowledge of accounting practices and real-world experience. To ensure if the candidate is able to handle job responsibilities, they try to baffle him or her with several types of accounting interview questions. Which is why, it is important to prepare for them so that you can explain how you work, and demonstrate required skills, qualities, experience, and knowledge of accounting terminology. To prove that you have the required qualifications for the job, prepare yourself for these common accounting interview questions.
The reasons to ask this question is to know if you can work with the accounting program the company is using. As there are tens and hundreds of accounting applications, it is possible that you're not aware of the one they are using. It's okay not to know it. All they want to see is whether you have the quality to learn and adopt new programs quickly. So to answer this question, put your words this way:
Example: I was using Tally 9 ERP for the last five years. I have even worked with a custom accounting software for two years during my employment at "ABC Corporation." As a freelancer for two small businesses, I have also used NetSuite ERP and FreeAgent. I am also taking classes on FreshBooks for the last two months.
Another counter question on your answer may come up for you, which could be:
Which accounting programs you consider as the best and why?
Be frank, and don't show yourself as an accounting erudite to state which one is good or bad. Instead, say that there are a couple of limitations, which when sorted out could be of a great help. You can also highlight some of the features that you liked that made accounting job easy for you. It could be user-friendly interface, ease of creating customizable invoices, automating and sending payment reminders, etc.
This question is to assess your knowledge of business accounting. Answer it by saying this.
Example: Accounting practices follow two types of business transactions They are: Revenue and Capital.
As this question provides you with two options. You need to carefully choose one without undermining the other.
Example: I would consider functionality over the price since it will help in performing more work. Price is secondary to me. But you cannot compare or bifurcate them when it comes to purchasing an accounting software. There are a few accounting software that cost less, but perform well. Whereas, there are some that cost more, but perform less. When choosing between the two, the company has to consider its requirements and pick the one that best caters to its accounting needs.
This question is to check if you've thorough knowledge of the types of statements used in accounting. The ideal answer to this question would be this.
Example: The cash flow statement can give you a clear picture of the financial health of your company since cash is the king. However, in addition to this, you need to refer to the income statement, and balance sheet as well in order to get a deeper insight into the company's financial health.
There are only two ways to answer this question. You can say "no," or "yes." In either case, be ready to elaborate since your "no" will show you as an inexperienced, and "yest" as an experienced.
Example: As an Accounting Officer with "XYZ Company," I found that the reimbursement procedure of medical bills for employees too complicated. The staff had to wait for more than three months to get paid for their medical expenses. I discussed the matter with the accounting team and understood what' was causing the delay in payment. After working on the issues for a week, I finally found a solution. That was something which the employees of XYZ company will never ever forget.
Accounting job is not just to keep track of incoming, outgoing, and outstanding cash. It is also meant to reduce costs. And that's what the hiring manager wants to know whether you can contribute for them in this regard.
Example: In my previous employment with "ATC Inc.," I discovered the excessive use of papers, which accordingly to be was pointless. Not only this practice was harming our environment, but also putting extra burden on the company in terms of expense. After carefully scrutinizing and removing the redundancy of paper usage, I streamlined the process and saved a few hundred dollars monthly for the company.
You are well aware of the fact that there is no room for error in accounting. So as an accounting professional, you need to have a keen eye for detail, be able to identify errors, and rectify them. Demonstrate your precision and accuracy in accounting this way.
Example: In my opinion, human errors in accounting occur due to workloads. If any one single person is burdened with lots of work that require more than two hands, he or she is bound to commit mistakes out of hurry to finish them. Being an accounting lead, I distributed the workload equally among all members of the accounting department. Before that, I reviewed their strength and weaknesses and delegated works accordingly.
This question, like all others, demands an explanation. So highlight the differences by giving a fitting example of each of them.
Example: Executive accounting is in the service industry where the involved companies provide services to users. To maintain the details of income and expenses incurred in such a business executive accounting is used. Public accounting is a term where CPAs and auditors conduct audits to help companies review their financial records and support accountability. Public accountants are experienced in working with multiple industries, whereas, executive accounts can handle the accounting of only service industry. Also, public accountants are required to hold a CPA certification while executive accounts are not.
Whether you're a beginner in accounting, or experienced, the interviewer wants to check if you're familiar with what's going on in the industry. While they don't expect a right answer, they just want to check how you can handle any such challenges if you encounter them.
Example: Keeping with the ever-changing tax codes is challenging. It is hard to predict and be prepared with the reforms the government brings in without any notice. When such things happen, it takes time to adapt them. Moreover, the current software programs may not have the features to incorporate all the changes. In that case, all the entries to the new tax codes have to be done manually, which in turn, also increases the chances of errors.
This question is not just common in accounting field, but other professions as well. Since accounting is an essential activity in any industry, there is a wide career opportunity for accounting professionals. The hiring manager wants to know whether you will jump the ship if any such opportunity arises, or you are choosing the company just because you want a job. Most importantly, the interviewer wants to know a strong reason for hiring you. So an appropriate answer to this question will be to think how best you fit for the company, and how capable you're to fulfill their needs.
Example: Before applying to your company, I did an extensive research and found out that the work culture here is good, positive, and encouraging. The management also value talented people and give them an opportunity to grow and utilize their experience in the interest of the company. I also admire the social work that you company indulge in. I have previously contributed in fund-raising for previous employers and can do the same for your company.
There is no hard way to answer these 10 common accounting interview questions exactly as stated. They are provided for your reference and as a guideline so that you can come up with your own version of answers.