5 Common Accounting Interview Questions
Accounting is a solid career choice for those who have the skills to do it. As of 2014, the median salary of an accountant was close to $70,000.
But, getting your foot in the door is still a significant task to achieve. If you're mentally preparing for an interview at a firm, there are some frequently asked accounting interview questions you'll need to keep in mind.
Let's take a look at five of the most common.
1. "What Is Working Capital?"
This is one of those deceptively simple interview questions that interviewees may blank on.
But, the answer is as simple as the question itself. A firm's working capital is its current assets minus its current liabilities. Common examples of working capital are cash, short-term investments, and inventory.
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2. "What Are Three Types of Common Budgeting Methods?"
This is yet another simple question that can throw some applicants off. The good news is, there are three relevant types of budgeting that are easy to remember:
- Incremental budgeting - Using the previous year's financial figures, the accountant is able to determine the new year's budget. Depending on the previous year's performance, the budget may be higher or lower than projected. This is one of the most common methods because of how simple it is.
- Activity-based budgeting - Uses a target number (such as $50 million in revenue) Then determines the necessary steps needed to reach it/the cost of each of those steps.
- Zero-based budgeting - This method involves starting from zero (known as a "zero base") while also making sure that all expenses are justified before each new period. This allows the next period to start at zero.
3. "What Accounting Platforms Have You Worked With?"
It's important that you have at least some proficiency with larger accounting platforms, such as Microsoft Dynamics GP and Quickbooks.
While it's more impressive to a prospective employer if you're familiar with multiple platforms, displaying a willingness to learn new software can go a long way.
If you don't have at least intermediate experience in accounting platforms from other jobs, take the time to learn them on your own.
4. "If You Could Define a Business in Only One Financial Statement, Which Would you Choose?"
While it's difficult to determine the financial health of a business using only one source, the best answer here would be to take a look at the cash flow statement.
This will provide you with an objective look at how much money the business is generating, and thus how well the business is performing overall.
5. "What Methods Do You Use to Detect Fraudulent Entries?"
While accounting platforms have features that can help you catch suspicious activity, they aren't perfect in catching everything.
In order to have the highest chance of discerning fraudulent behavior, you should use a combination of software features and manual spot checks. Furthermore, you should be well-informed about what common fraud looks like so that you can recognize it.
Accounting Interview Questions Can Be Intimidating
But they don't have to be. With the right preparation, you'll be able to answer any of these accounting interview questions without skipping a beat.
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