Account11

Capital redemption reserve: A reserve created on redemption of the average cost. The cost of an item at a point of time as determined by applying an average of the cost of all items of the same nature over a period. When weights are also applied in the computation it is termed as weight average cost.

Floating Change: Assume change on some or all assets of an enterprise which are not attached to specific assets and are given as security against debt.

Difference between Funds flow and Cash flow statement:

A Cash flow statement is concerned only with the change in cash position while a funds flow analysis is concerned with change in working capital position between two balance sheet dates. A cash flow statement is merely a record of cash receipts and disbursements. While studying the short-term solvency of a business one is interested not only in cash balance but also in the assets which are easily convertible into cash.

Difference between the Funds flow and Income statement:

A funds flow statement deals with the financial resource required for running the business activities. It explains how were the funds obtained and how were they used, whereas an income statement discloses the results of the business activities, i.e., how much has been earned and how it has been spent. A funds flow statement matches the “funds raised” and “funds applied” during a particular period. The source and application of funds may be of capital as well as of revenue nature. An income statement matches the incomes of a period with the expenditure of that period, which are both of a revenue nature.

Why did you select accounting as your profession?

Well, I was quite good in accounting throughout but in my masters, when I got distinction I decided to adopt this field as a profession.

Do you have any professional experience of this field?

Yes, I have worked as an accountant at two different places.

Did you use accounting applications at your previous companies or prefer working manually?

Yes, I have used Advanced Business Solutions and AME Accounting Software in my previous jobs.

Can you name any other accounting application?

Yes, I am familiar with CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.

Which accounting application you prefer most and why?

I think all are good though but Microsoft Accounting Professional is best because it offers reliable and fast processing of accounting transactions that saves time and increases proficiency.

What is the abbreviation for the accounting terms debit and credit?

Debit abbreviation is “dr” and credit abbreviation is “cr”.

How many types of business transactions are there in accounting?

There are two types of transactions in accounting i.e. revenue and capital.

What is balance sheet?

It is a statement that states all the liabilities and assets of the company at certain point.

Have you ever heard about TDS, what it is?

Yes, TDS abbreviates Tax Deduction at Source.

In balance sheet, where do you show TDS?

It is shown on the assets section, right after the head current asset.

Do you have any idea about Service Tax or Excise?

It is a kind of hidden tax that is included in the service provided by the service provider and paid by the service receiver.

Do you think there is any difference between inactive and dormant accounts?

Yes, both are different terms in accounting. Inactive accounts means that accounts have been closed and will not be used in future as well. While, dormant accounts are those that are not functional today but may be used in future.

What is tally accounting?

It is the software used for accounting in small business and shops for managing routine accounting transactions.

How can you define departmental accounting?

It is a type of accounting in which separate account is created for departments. It is managed separately as well as shown independently in the balance sheet.

Define fictitious assets?

These are the assets that cannot be shown or touch. Fictitious assets can only be felt such as good will, rights etc.

By saying, perpetual or periodic inventory system; what do we mean?

In the first one i.e. the perpetual inventory system, the accounts are adjusted on continual basis. In the periodic inventory system, the accounts are adjusted periodically.

In accounting, how do you define premises?

Premises refer to fixed assets that are shown in the balance sheet.

In accounting, VAT abbreviates what?

VAT means Value Added Tax.

 Do you possess any knowledge about accounting standards?

Yes, as per my knowledge there are total 33 accounting standards published so far by ICAI. The purpose of these standards is to implement same policies and practices in any country.

What is ICAI?

It is the abbreviation of Institute of Chartered Accountants in India.

How can you explain the basic accounting equation?

We know that accounting is all about assets, liabilities and capital. Therefore, the accounting equation is: Assets = Liabilities + Owners Equity.

Define Executive accounting?

It is a type of accounting that is specifically designed for the business that offers services to users.

Define Public accounting?

Public accounting offers audits and CPAs to review company financial records to ensure accountability. It is for general public.

What is a CPA?

CPA stands for Certified Public Accountant. To become a CPA, one should have to do many other qualifications as well. It is a qualification with 150 hour requirement; it means that one should complete 150 credit hours at any accredited university.

What do you think is bank reconciliation statement?

A reconciliation statement is prepared when the passbook balance differs from the cashbook balance.

Differentiate Public and Private Accounting?

Public accounting is a type of accounting that is done by one company for another company. Private accounting is done for your own company.

What is project implementation?

Project implementation involves six steps in total such as: Identify Need Generate and Screen Ideas

Conduct Feasible Study Develop the Project Implement the Project Control the Project

Do you think Accounting Standards are mandatory and why?

Yes, I do believe that accounting standards play a very important role to prepare good quality and accurate financial reports. It ensures reliability and relevance in financial reports.