Question 1

Financial statements are prepared from which trial balance?

Accepted Answer

Financial statements can be prepared from the Adjusted trial balance. A trial balance is a report containing list of all the general ledger accounts i.e, debits and credits contained in the ledger of a business. The types of trial balance include : Unadjusted trial balance, Adjusted trial balance and the Post- closing trial balance.

Question 2

Foreign Exchange Rates refer to the

Accepted Answer

A foreign exchange rate is the price of the domestic currency stated in terms of another currency

Question 3

what is the job description of a payroll officer?

Accepted Answer

1 Collection of attendance / collation of attendance 2 Scrutunizing the received attendance 3 Calculating the salary as per the attendance, based on LOP received 4 Once the Payroll Processing is over, the gross salary should be checked with Master Data of salary 5 Netpay has to request for bank transfers / cheque 6 Need to take care of statutories like PF / ESI / PT / Income Tax 7 While processing salary, statutory deductions like PF / ESIC / PT and income tax calculations tobe taken care 8 Arriving the salary structure for New Joiners 9 F&F tobe done for resigned employees 10 PF & ESI Nomination has to take care for the new joiners 11 PF Settlement / PF transfer has to take care for the resigned employees after 60days from the date of resignation

Question 4

What is the meaning of invoice?

Accepted Answer

An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer An invoice indicates the buyer must pay the seller, according to the payment terms In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so rather than quantity, price and discount the invoicing amount is based on quantity, price, discount and duration Generally speaking each line of a rental invoice will refer to the actual hours, days, weeks, months etc being billed From the point of view of a seller, an invoice is a sales invoice From the point of view of a buyer, an invoice is a purchase invoice The document indicates the buyer and seller, but the term invoice indicates money is owed or owing In English, the context of the term invoice is usually used to clarify its meaning, such as "We sent them an invoice" (they owe us money) or "We received an invoice from them" (we owe them money)

Question 5

What is meant by liabilities ?

Accepted Answer

Liabilities are what all u owe from the bank on notes payable or in other words it is: Liability=Asset-Owners equity what company owes that is liability liability = Asset-capital

Question 6

How does the payment mechanism work?

Accepted Answer

The open items of an account can only be cleared once you post an identical offsetting amount to the account In other words, the balance of the items assigned to each other must equal zeroDuring clearing, the system enters a clearing document number and the clearing date in these items In this way, invoices in a vendor account are indicated as paid, and items in a bank clearing account are indicated as cleared You generally use the payment program to clear invoices Manual clearing of open items is therefore not usually necessary However, you will sometimes have to clear items manually if, for example, you receive a refund from your vendor or you have set up a direct debit procedure

Question 7

What do you understand by Intercompany Settlement?

Accepted Answer

A key functional area of SAP for Utilities that supports cross-company exchange of settlement data based on international standards such as EDI, XML, and Microsoft Excel Intercompany data exchange manages data transfer between retailers, distributors, and independent service operators with special regard to the requirements in deregulated markets

Question 8

What is 3 Way Matching?

Accepted Answer

3 way matching is to compare three documents ie, 1 Purchase order 2 Receipt of Items/Packing slip 3 Invoice For example, if we Order for 50 Items in purchase order and received 40 Items only instead of 50 items But we received invoice for 50 items After comparing the three documents we pay for only 40 Items

Question 9

what is the difference between the terms 'credit' and 'debit' from the customer point of view?

Accepted Answer

From the customer point of view, credit is the amount which is deposited into her or his account And debit refers to that amount which is taken from the account of the customer

Question 10

What is reconciliation ?

Accepted Answer

You should have recorded in your cash books all amounts you have actually received and payments you have actually made However the cash books may be incomplete as your bank may have put extra transactions through your account such as: ► bank fees or interest charges ► direct debits (payments) and direct credits (receipts) Doing a regular bank reconciliation will allow you to: ► take into account any extra transactions your bank puts through your account and ► check and record any errors or omissions By regularly doing a bank reconciliation (say monthly) you can be more confident that your records contain all the information you need to prepare your income tax return and activity statements

Question 11

What is the Debit Balance recovery? How we can recover if we won’t have any future transactions from supplier ?

Accepted Answer

The Debit balance recovery is usually made by raising a credit memo for the regular vendors However if there are no future transactions from the supplier, we ask the vendor to send the check / make an EFT for the amount due from him When payment is made to the wrong vendor or payment made in excess, in that case overpayment has gone to the vendor, so for us it is vendor debit balance For debit balance recovery, we can either follow- up with the vendor to send us the excess amount / refund back, or we can adjust that extra amount in future invoices submitted by that vendor In case no future transactions, we have to follow-up with the vendor, failing which we have to write off this amount

Question 12

Liabilities are defined as

Accepted Answer

The words "asset" and "liability" are two very common words in accounting Liabilities are legally binding obligations that are payable to another person or entity Accounts payable, loans, mortgages, deferred revenue, come under liabilities

Question 13

Which of these is an example of eminent domain?

Accepted Answer

A legal strategy that allows a government to grab hold of private property for public use is known as eminent domain. The seizing authority must pay fair market value for the property seized.

Question 14

A debit signifies a decrease in

Accepted Answer

All of the above

Question 15

Which capital gains tax on property?

Accepted Answer

Capital Gains Tax on Property: 1 Short term, 2 Long term Short Term Capital Gain on property is considered as a gain from selling a property which was held by you for less than 36 months As a taxpayer, you are liable to pay tax on short term capital gain on property as per your applicable marginal income tax slab * Current Short Term Capital Gains tax rate is 30% Long Term Capital Gain When you sell your property that is owned by you for more than three years, any gain arising from such sale will be considered as long term capital gain Long term capital gain is calculated as the difference between net sales consideration and indexed cost of property * Current Long Term Capital Gains tax rate is 20%

Question 16

What is the table that is used for aging bucket report, what is the main purpose of this report?

Accepted Answer

Time periods you define to age your debit items Aging buckets are used in the Aging reports to see both current and outstanding debit items For example you can define an aging bucket that includes all debit items that are 1 to 30 days past due Normal table used for this Report is < 30 days 30-60 days 60-90 days 90-180 days and >180 days

Question 17

Which type of assets should be capitalized and when expense out?

Accepted Answer

Assets are things which is provide service for long duration it may 3 years 4 years or for long period of timeThese items capitalize in our account books and charge depreciation in every year according to these rate it may 20 10 100

Question 18

'Equity schemes managed strong NAV gains, which boost their assets' was a news in some financial newspapers. What is the full form of the term NAV as used in above head lines ?

Accepted Answer

Net asset value (NAV) is value per share of a mutual fund or an exchange-traded fund (ETF) on a specific date or time. It is the value of an entity's assets minus the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value.

Question 19

Goods that are excludable include both

Accepted Answer

Goods that are excludable include both private goods and natural monopolies.

Question 20

What is cash budget ?

Accepted Answer

Cash budget is the budget which is prepared under the finance budget It is an estimation of the expected cash receipts and cash payments during the budget period By preparing cash budget it becomes possible for the organisation to predict whether at any point of time there will be excess or shortage of cash Two main points should be remembered before preparing cash budget: Time period of the cash budget and the items to be included in the cash budget

Accounting and Finance Questions