Accountant Interview Question and answer

Q: Why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?

A: Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees’ work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.

Q: Walk me through a cash flow statement.

A. Start with net income, go line by line through major adjustments (depreciation, changes in working capital and deferred taxes) to arrive at cash flows from operating activities.

·         Mention capital expenditures, asset sales, purchase of intangible assets, and purchase/sale of investment securities to arrive at cash flow from investing activities.

·         Mention repurchase/issuance of debt and equity and paying out dividends to arrive at cash flow from financing activities.

·         Adding cash flows from operations, cash flows from investments, and cash flows from financing gets you to total change of cash.

·         Beginning-of-period cash balance plus change in cash allows you to arrive at end-of-period cash balance.

Q: What is working capital?

A: Working capital is defined as current assets minus current liabilities; it tells the financial statement user how much cash is tied up in the business through items 

such as receivables and inventories and also how much cash is going to be needed to pay off short term obligations in the next 12 months.

Q: Is it possible for a company to show positive cash flows but be in grave trouble?

A: Absolutely. Two examples involve unsustainable improvements in working capital (a company is selling off inventory and delaying payables), and another example involves lack of revenues going forward.in the pipeline

Q: How is it possible for a company to show positive net income but go bankrupt?

A: Two examples include deterioration of working capital (i.e. increasing accounts receivable, lowering accounts payable), and financial shenanigans.

Q: I buy a piece of equipment, walk me through the impact on the 3 financial statements.

A: Initially, there is no impact (income statement); cash goes down, while PP&E goes up (balance sheet), and the purchase of PP&E is a cash outflow (cash flow statement)

Over the life of the asset: depreciation reduces net income (income statement); PP&E goes down by depreciation, while retained earnings go down (balance sheet); and depreciation is added back (because it is a non-cash expense that reduced net income) in the cash from operations section (cash flow statement).

Q: Why are increases in accounts receivable a cash reduction on the cash flow  statement?

A: Since our cash flow statement starts with net income, an increase in accounts receivable is an adjustment to net income to reflect the fact that the company never actually received those funds.

Q: How is the income statement linked to the balance sheet?

A:  Net income flows into retained earnings.

Q: What is goodwill?

A: Goodwill is an asset that captures excess of the purchase price over fair market value of an acquired business. Let’s walk through the following example: Acquirer buys Target for $500m in cash. Target has 1 asset: PPE with book value of $100, debt of $50m, and equity of $50m = book value (A-L) of $50m.

·         Acquirer records cash decline of $500 to finance acquisition

·         Acquirer’s PP&E increases by $100m

·         Acquirer’s debt increases by $50m

·          Acquirer records goodwill of $450m

Q: What is a deferred tax liability and why might one be created?

A: Deferred tax liability is a tax expense amount reported on a company’s income statement that is not actually paid to the IRS in that time period, but is expected to be paid in the future. It arises because when a company actually pays less in taxes to the IRS than they show as an expense on their income statement in a reporting period.

Differences in depreciation expense between book reporting (GAAP) and IRS reporting can lead to differences in income between the two, which ultimately leads to differences in tax expense reported in the financial statements and taxes payable to the IRS.

Q: What is a deferred tax asset and why might one be created?

A: Deferred tax asset arises when a company actually pays more in taxes to the IRS than they show as an expense on their income statement in a reporting period.

·         Differences in revenue recognition, expense recognition (such as warranty expense), and net operating losses (NOLs) can create deferred tax assets.

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Careers in accounts

Careers in Accounting

According to the United States Bureau of Labour Statistics, Accounting is a growing field for anyone wanting to establish a career over the next 10 years. Bubbles are bursting, tax laws are changing, companies and corporations closing and new fields are opening. Some areas of accounting are growing faster, some as much as 25%.

Types of Accountants

Public, management, government accounting and internal auditing are four basic types of accountants. Five careers in accounting are at the top of the list in terms of salary, job prospects and longevity of demand. Within the four basic types are specialty areas, such as:

1) Internal Auditor
2) Compliance Executive
3) Financial Analyst
4) Staff Accountant
5) External Auditor

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Skills of Accountant

TOP SIX SKILLS OF ACCOUNTANT.

1. Organization

Accountants are important people. They manage a lot of responsibility, which means that they generally stay pretty busy.

To be a good accountant you need to have a system to keep track of those responsibilities – such as any portfolios you manage, the transactions you handle, and any important dates and deadlines you need to meet – to ensure that you ful fill all of your duties to the best of your ability.

You can make use of tools like calendars, alphabetized folders, day planners, colour-coded post-it notes and highlighters, and apps and programs designed to help you stay highly organized and in the short- and long-term.

Being well-organized is a great way to demonstrate to your coworkers and manager that you are reliable, competent and able to get the job done. Start honing your organizational skills now and by the time you begin applying for jobs, you’ll be able to discuss your organizational skills with confidence.

Tip: Not sure where to start? Try creating a study schedule for each of your classes, using a day planner for your daily to-do list and starting a filing system for your notes

2. Time management

Good time-management skills go hand-in-hand in with strong organizational capabilities.

A system for managing your workload is only effective if you also know how to budget your time. As an accountant, you’ll need to manage competing priorities and juggle myriad tasks – while completing everything on time.

The ability to work within deadlines and to continually re-prioritize your to-do list will take you far. Not only will it impress your boss, co-workers and clients, it will also help you to maintain a healthy work/life balance and keep your day-to-day productive.

Tip: Give yourself blocks of time to complete certain tasks. Got an exam coming up? Allocate four or five 2-3 hour windows to get your studying done, and make a list of what you want to accomplish during each study session.

3. Adaptability

The accounting industry is highly dynamic, so accountants who are able to adapt quickly and easily are at a distinct advantage.

In addition to being able to provide better services to their clients, adaptable individuals are more likely to learn and grow in their careers because they see each new challenge as an opportunity to learn and test their skills.

Embrace change – learn to make the most of every curveball that your work throws your way.

On a related note, it’s also great to be proactive. Although it takes a bit of extra effort to be informed about changes as they happen, it definitely pays off: it will keep you on the cutting edge of the industry, earn you the respect of your peers and ensure that others look to you when planning ahead.

Tip: Next time something unexpected happens, look for the opportunity in the situation. If you have to work with a difficult classmate at school, for example, focus on your his or her strengths and use the situation.

4. Communication

No matter where you work, what your job entails or who you work with, strong communication skills are incredibly valuable. Being able to communicate well in writing and in person will help you to get a job, work as a team with your colleagues, interact with clients and, with time, advance professionally.

Well-developed interpersonal skills will also be useful for networking. Whether you have to attend a corporate function or are simply welcoming a new coworker to the office, the ability to assert yourself when meeting new people in order to establish profitable relationships will serve you well. Never underestimate the importance of making a good first impression.

Tip: To start with, work on your smile, your handshake and your posture. Then move onto practicing communicating clearly and tactfully with family and friends, and memorize a short list of questions to ask people about themselves when you first meet them.

5. Openness

Honesty and integrity are highly valued in the accounting world.

Accountants – and the firms they work for – pride themselves on adhering to the strictest ethical standards. It’s why the public, other businesses and the government know that they can trust accountants to always look out for their best interests.

Being transparent when making decisions and giving advice has the added benefit of improving your working relationships. It will make teamwork easier and will help you to foster an environment that is respectful and collaborative.

Many accountants work on larger teams, so the importance of being trusted can’t be overstated. Get into the habit of thinking about the consequences of your actions each time you have to make a big decision.

Tip: Ask yourself the following questions: What are my reasons for coming to this decision? Who will benefit from this? Who stands to lose? What is the short- and long-term impact of this choice? Be honest with yourself about your motives for making particular choices and see what you learn.

6. Leadership

Being a good leader means knowing how to mentor and teach, and making yourself approachable and available to the people you’re responsible for. You have to balance being a role model and the person in charge while still being part of the team. It also takes confidence, patience, and the ability to delegate – traits which don’t come easily to most people.

In accounting, leadership skills also include strategic thinking and long-term planning. Many accountants provide consulting services, which means that they offer advice and business solutions to help companies improve their operations, so the ability to look ahead is key.

The top players in accounting are generally known for being visionary – for making logical decisions that also involve a bit of creativity. To be a successful accountant, you need to be able to show your clients that you’re working to improve their present and future.

Tip: There are inspiring individuals in all walks of life. Read up on some of the more prominent leaders in history to see what made them unique or talk to a real-life role model about what they think makes a good leader. If possible, sign up for a leadership position at school or in your community so you can practice the skills you’ve read or heard about.

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Some Tips For Interview

1. Why Do You Want to Work in This Industry?

Bad answer:

“I love to shop. Even as a kid, I spent hours flipping through catalogues.”

Don’t just say you like it. Anyone can do that. Focus instead on your history with that particular industry, and if you can, tell a success story.

Good answer:
“I’ve always loved shopping, but my interest in retail marketing really started when I worked at a neighborhood boutique. I knew our clothes were amazing, but that we weren’t marketing them properly. So I worked with management to come up with a marketing strategy that increased our sales by 25% in a year. It was great to be able to contribute positively to an industry I feel so passionate about, and to help promote a product I really believed in

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Eight Most Important Interview Tricks

Eight Important Interview Tips

It’s the opportunity you’ve been waiting for. After identifying the right places to search and submitting your resume for positions in your industry, you get the call for a job interview. Before you head off to this critical step in the hiring process, Kforce offers valuable advice you should remember when interviewing for jobs.

1. Research the Company

Before you leave for an interview, you should have a good understanding of the company you will meet with. Start with a simple online search or visit the company’s website. You should look for what the company does and become familiar with their products or services. Visions and values are also great topics to research before your interview. You may also score extra points in an interview if you are prepared to speak about the company’s community involvement or history in a particular market. Another tip is to think of questions the interviewer may ask you ahead of time and come up with clear-cut answers. If you have enough research and discussion points going into the interview, you are more likely to impress the hiring manager.

2. Dress for Success

It is always a good idea to plan out your attire the day before your interview. Even though many working environments may enlist a corporate casual style, you still want to dress professionally. For men, this means you will need to wear a suit. Ladies may also choose to wear a suit or other conservative attire, but keep the jewelry to a minimum. You want to make sure the focus is on what you are saying and not what you are wearing.

3. Be punctual

When preparing a day ahead for your interview, make sure your alarm is set to give you enough time to get ready and get to the interview on time. Take traffic and weather into consideration when you plan your commute to the interview site and aim to be there at least 15 minutes prior to the meeting time. Employers always appreciate candidates who arrive early. Plus, showing up on time will help you be more prepared and engaged once the shot clock starts for the interview.

4. Verbal Communication

From the moment you walk through the door for your interview, you should be polite, greet everyone you meet and treat them with respect. Once you are in the interview, keep that game plan in mind, but also make sure you come off with the right amount of confidence, energy and enthusiasm. You don’t want to use slang words or become too comfortable with your interviewer, but maintain a level of professionalism. Don’t forget the questions you prepared for when researching the company. At this point in the game, you should be able to provide the employer with direct answers. Additionally, when asked a question, listen carefully and don’t interrupt.

5. Non-verbal communication

Sometimes it isn’t just about what you say, but how you present yourself. Chewing gum, fidgeting, and slouching down in an interview are just a few things that will keep you from landing the job. Instead, be aware of how you are communicating with your body. Always keep a smile on your face and greet your interview with a firm handshake. Inside the meeting room, maintain good eye contact and posture to show the employer you are interested and engaged in the conversation.

6. Ask good questions

If you thought interviews were only based on employers asking you about your background and experience, you’d be wrong! An interview works both ways. You are interviewing the company as much as they are interviewing you. Consider asking the interviewer questions regarding the people, the company and the position.

If you meet with more than one interviewer, chances are each person will have a different role and viewpoint. Remember to ask each individual the same questions pertaining to their work environment and responsibilities. Getting a variety of answers helps you better understand your potential teammates and the company culture.

Interviewers may also take notice if you ask good questions surrounding the company’s history. Inquiring about how the company operates, what strategies they employ to land clients, or what types of software they use can also let the employer know you are interested in learning more about their business.

While it is important to know what the company does, you want to find out as much as you can about your duties, if selected for the job. Make sure you ask the interviewer what your day-to-day responsibilities would consist of and what qualities they would like the ideal candidate to have. The only topic to avoid is wages. Let the employer bring that up, or wait to address the issue if you are offered the job.

7. Be the true differentiator

You might not know how many candidates are in the running for the same job as you. However, you should try to do what you can to stand out from the crowd during your time with the interviewer. Whether that means asking quality questions or creating great chemistry during the interview, don’t miss an opportunity to leave an impression.

8. Leave with confidence

When it is all said and done, the interview is still not over. By crafting a brief closing statement for the interviewer you can help replay why you would be of value to the team. Politely ask the interviewer if there are any other questions they may have about your background, or if there is anything preventing them from considering you as a top candidate for the job. It is your last chance to clear up any misconceptions the interviewer may have about your skills and experience.

Before you leave the facility with a smile and a handshake, remember a few pieces of advice– get the interviewer’s business card, ask what the next steps are, and remind them of your interest in the position. These techniques may assist you in making it to the next step in the hiring process.

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4 Killer Interview Strategies

Interview Strategies....? 

4 Killer Interview Strategies Guaranteed To Land Your Next Job

 #1 Prepare Your Opening Statement ?

Honestly speaking, at 99 percent of interviews, you’re bound to receive a question you share information about yourself. While there are numerous ways of asking this question, the mentioned one is more commonly used, “besides your resume, will you share additional information about yourself?” This can be termed as your opening statement. If you are aware that this question is on the way, then why not prepare well in advance prior to the interview? Note down an opening statement comprising 250-300 words that would gain attention on your highlights, achievements, promotions and among others. Try not overlook this opportunity by precisely shortening your resume. Use this golden opportunity to stand out in the crowd.

Strategy #2: Create Ways to Cleverly Brag About Yourself

After preparing for the opening statement, the employing group is already very familiar with your astral qualities. Rather than hoisting the flag dictating about your accomplishments, design your answers to embrace how your colleagues or seniors appreciated you.

Strategy #3: Be Positive

During the interview session, the hiring people are trying to examine numerous areas. People sink towards positive people. Even after a horrible exit from the previous job, be optimistic about the severance and showcase your passion with respect to the next role. Try and avoid sharing tales of divergence with your previous colleagues, the negative impact you create, will turn against you since you attempt to halt at this job.

Strategy #4: Thoroughly Research Both The Company And Position

Do not commit the crime of waiting for an opportunity to learn about the organization while the interview. It’s always good to research about the company you’ve applied for. Try to gain information with respect responsibilities, future employees, supervisors and others. In addition, gathering information with respect to the historical position would be an add-on.  

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