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Most Frequently asked Interview questions for Bookkeeper

In this post, I’ll point out the most Frequently asked Interview questions for Bookkeepers. Firstly this will help you to gain advanced knowledge, secondly, this knowledge will help you stand out in the crowd, thirdly and most importantly, you will have a revision of basic accountancy rules.

Moreover, below is the list of Frequently asked Interview questions for Bookkeepers.

Ledger Questions:

Q: If a ledger is off by $5000, how would you correct it?
Ans: Firstly Ledger can be corrected by doing reconciliation, Secondly by going through each entry to make sure there’s no human error. Moreover, I am doing bookkeeping for a long time, and these types of errors are really easy for me to figure out. In Conclusion, I’ll manage books accurately to avoid all errors.

Accounting Method Questions:

Q: Which accounting method would you prefer and why? Cash accounting or accrued accounting?
Ans: Before answering which accounting method you prefer; firstly you should know the difference between the Cash and accrual methods.
Firstly In the accrual method transactions are recorded before actual cash hits the bank account, However, cash accounting transactions are recorded when actual cash is received.
In Conclusion, the accrual method suits bookkeepers as they need to report to managers about their financial status on regular basis, whereas the Cash accounting method suits CPAs and tax accountants as it’s easier to file taxes on books with the cash method.

Balance Sheet Questions:

Q: What is a Balance sheet?

Ans: Firstly I’ll talk about what balance sheet has different parts, Secondly I’ll explain the basic balance sheet equation.

The balance consists of three main parts:
a)- Assets
b)- Liabilities
c)- Equity
In Conclusion, the balance sheet is the most crucial report for any business, as it helps to see the net worth of the business and how is the cash flow. The most common Balance sheet equation is:
Assets = Liabilities + equities

Cost of goods Sold Questions:

Q: What does the Cost of goods represent in a business?
Ans: Most Importantly Cost of goods sold represents all costs incurred in purchasing goods, raw material, packaging, and labor for producing or selling the products. The formula for calculating COGS is:
COGS = (Beginning Inventory+ Purchases) – (Ending Inventory)

Debit & Credit Questions:

Q: Explain Debit and credit?
Ans: Firstly I’ll explain what is difference between debit and credit. Secondly, I’ll discuss why these terms are used. When a transaction occurs, one account is increased, and another account is decreased. Debit and credit also made the basis of double-entry bookkeeping.
1)- Debit term is used:
a) Firstly Debit increases assets and expense accounts.
b) Secondly Debit decreases liability, equity, and revenue account.
2)- Credit term is used:
a) Firstly Credit increases liability, equity, and revenue.
b) Secondly Credit decreases assets and expense accounts.

Q: How to calculate profit?
Ans: Profit is the backbone of the business, In order to do accurate bookkeeping you should know how to calculate a profit. The formula for calculating profit is below:
Profit = Expenses – revenue – COGS

Q: What are the different types of accounting?
Ans: In the accounting world, multiple types of accounting careers exist. The most commonly known are below:
a) Corporate Accounting
b) Government Accounting
c) Forensic Accounting
d) Public Accounting

Q: What do you know about Basic accounting principles?
Ans: All organizations have different approaches to handling their financials, but they all revolve around basic accounting standards. According to accounting tools, the Basic principles of accounting are:
Accrual principle, Conservative principle, Cost principle, Economic principle, Consistency principle,
Reliability principle, Time period principle, and Monetary principle.

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