Accounting Interview

Accounting Interview
 
Mostly Asked Questions & Answers 

What does the abbreviation dr mean in accounting?

'Dr' means Debere in Latin stands for 'what comes in' or in simple words whatever assets the business owns or the expenses it has to pay comes under debit.

While 'cr' means credere in Latin means 'what goes out', in simple words whatever liabilities business owns, or the income it earned during the year comes under credit. 

What is the difference between personal account real account and nominal account?

The total business transactions are divided in to three They are Transactions related to persons, Transactions related to Things, Transactions related to incomes & expenditures. In accountancy we have three types of accounts they are - personal, real, nominal Personal accounts refers to all the transactions related to natural persons, artificial persons and representative persons

ex:- rama, ravi, Indian bank, outstanding rent. ,. First category of transactions belongs to personal accounts RULE: debit the receiver and credit the giver Real accounts include things in the business i.e. assets. Second category of transactions related to Real accounts ex: buildings, machinery, cash etc. RULE: Debit what comes in and credit what goes out Nominal accounts includes all the transactions related to expenditures, incomes, losses, and profits. Ex: - rent paid, rent received, bad debts, profit on sale of an asset.

RULE: Debit all expenses and losses and credit all incomes and profits

Personal : Debit the receiver; Credit the giver.

Real : Debit what comes in; Credit what goes out.

Nominal : Debit all expenses & loses; Credit all incomes & gains.

What is Service Tax & Excise? How will it be charged?

Service Tax is a form of indirect tax imposed on specified services called Taxable services. Presently it covers 58 services. The service provider but A collected shall pay a service tax from the service receiver. Excise is also a form of indirect tax levied on A goods produced or manufactured in India.

Service Tax is a Indirect Tax which is levied on Service. The Service receiver will pay to the service provider.

Ex: Servicing a Vehicle, Delivering goods, outsourcing agencies. etc.
Excise Duty is also a form of Indirect Tax but this is imposed on Goods or manufacturing Items.

Ex: Steel, Cement, dress Materials, etc

Where should TDS received should show in balance sheet?

Assets Side: Advance In-Come Tax Ledger in current year. it should be shown under the head current asset on the asset side of balancesheet

What is the difference between inactive accounts and dormant account?

Dormant accounts are those accounts in which there are transactions in the recent history (the stipulation may vary according to the company's rules). Inactive accounts are those accounts in which transactions are being made for long time.

Inactive account means an account had not been in use for a long time and not going to be used in the future. Dormant accounts are those which are presently not in use but it is
likely that it may be used in the near future.

Define Tally Accounting?

Tally is a financial accounting software package designed by Tally Solutions mainly for small businesses and shops. They claim on their website that Tally is used by over 2 million users, in over 90 countries. Tally 9.0 is the latest version to date.

Tally is a financial accounting software package designed by Tally Solutions mainly for small businesses and shops. They claim on their website that Tally is used by over 2 million users, in over 90 countries. Tally 9.0 is the latest version to date.

What are the fictitious assets?

These are like intangible assets, which cannot be seen or touched. Actually, these are not assets but some expenditure, which cannot turn to profit and loss account of a particular period that is why these items are shown on assets side of balance sheet to be written off to P&L account in reasonable years.

those assets are created by a company Ex. preliminary expenditure,advertisement etc.

What is Departmental Accounting? Give an example?

Departmental accounting means account prepared separately for the department and here ledgers will be opened trial balance will be prepared, also p&l account will be prepared, and profit or loss is included in the main p&l account and shown in the balance sheet.