Financial Accounting Questions and Answers
Financial accounting is actually involved with the analysis & reporting of the financial transactions which are related to business. All your questions related to Financial accounting will be answered in the Financial accounting interview questions and answers mentioned below. Financial accounting includes the preparation and planning of financial statements available for public use.
Objectives of Financial Accounting
- Keeping a record of the financial transactions as soon as they occur in order to prepare the financial statements
- Calculating the profit or the loss to enable management to undergo correction strategies if needed
- Determining the financial strength of the firm by identifying its assets and liabilities
- Communicating the data to the stakeholders through the statements and reports so that stakeholders can take suitable decisions on their investments which they are going to do in the business
Most Frequently Asked Financial Accounting Questions
Capitalization in an accounting context means the price to purchase an asset which is actually included in the price of the asset whereas in the financial context it is the price which is required to buy an asset which comprises of price of a specific asset, and it also includes the company’s retained earnings with the stock debt and even the long term debt. Capitalization is of two kinds which are Overcapitalization and Undercapitalization .
Point to be noted:- Go through this Q&A very thoroughly as this is one of the essential Financial accounting questions.
Adjusting entries are compulsory at the end of each financial period to align the incomes and expenses. Adjusting entries usually occur before the release of the financial statements.
Adjusting entries are of two types:-
- Accruals: Revenues earned or expenses acquired that have not been earlier recorded
- Deferrals: Receipts of assets or the payments of cash well in advance of revenue or expense recognition
| S.no | Bills payable | Bills receivable |
|---|---|---|
| 1. | The amount which has been paid by the company for their credit purchase | The amount which has been reviewed by the company for their credit sale |
Financial accounting tells the amounts the owner owe to the suppliers or what customers owe us, operating costs, available cash &, payroll costs. Go through our Financial accounting interview questions and answers very thoroughly as this is one of the essential Financial accounting questions. Financial accounting can be used to analyze the different aspects of the business like a cause of high expenses every month, monthly sales.