What are the different types of accounting?
Different types of accounting are –
Financial Accounting – This type of accounting records information related to the financial status of the company.
Administrative Accounting – Administrative accounting is focused on the administrative aspects of the company and is used above all to assess the fulfillment of the established objectives and improve the implemented strategy. It is very useful for making forecasts and planning the actions and resources to be used.
Tax Accounting -Tax accounting helps to register and prepare reports related to tax returns to the public treasury and payment of taxes.
Cost Accounting – This type of accounting is more focused on companies of an industrial nature. It helps to make a detailed analysis of the unit costs of production, sales, and, in general, of the production process that the company carries out.
Management Accounting – Management accounting has a broader vision than cost accounting since it records all the economic and financial information of the company to be able to make short-term and long-term decisions.
How do you maintain accounting accuracy?
Maintaining the accuracy of an organization’s accounting is an important activity as it can result in a huge loss. There are various tools and resources which can be used to limit the potential for errors to creep in and address them quickly if any errors do arise. My favorite is MS Excel.
Since you mentioned that MS Excel is your favorite, please give us three cases where Excel will make your life easier.
Various reports can be extracted from the Software. However, reports in specific formats are often required and this may not be possible in the Software. This is where Excel appears. Data can be sorted, filtered, redundant data fields can be removed, and data can be presented in a custom format.
Excel is also required to link multiple data sets. Therefore, different reports can be extracted from the software, and then, using the search function, they can be grouped into one report.
The use of Excel becomes the most important for doing various reconciliations. This cannot be done in software. For example, if I need to reconcile the vendor ledger balance, I will pull the ledger from the software into Excel and get a similar vendor Excel for your ledger. All reconciliations will have to be done only in Excel.
Is it possible for a company to show positive cash flows and still be in grave trouble?
Yes, if it shows an unsustainable improvement in working capital and involves a lack of revenue going forward in the pipeline.
What is the difference between inactive and dormant accounts?
Inactive accounts are which are closed and will not be used in the future. Dormant accounts are not currently functional but may be used in the future.
Which accounting platforms have you worked on? Which one do you prefer the most?
Describe the accounting platforms (QuickBooks, Microsoft Dynamic GP, etc.) that you have worked with and which one you liked the most.
What is working capital?
Working capital is calculated as current assets minus current liabilities, which is used in day-to-day trading.
In a simple accounting scheme, the concept of working capital focuses on the capital resources that a given company can count on in the short term to operate. These resources owned by the company are the cash, the portfolio of financial products, and other investments made by the company.
Give a suggestion to improve the company’s working capital flow.
In my opinion, the stock on hand can be the key to improving the working capital of the company. Of all the components of working capital, the stock is something we can control. We can pressure our debtors to pay us instantly, but we cannot have direct control over them because they are separate legal entities and, in the end, they are the ones who give us business.
We may tend to delay payments from our suppliers, but it ruins business relationships and hinders goodwill in the industry. Also, if we delay payments, they may not supply goods in the future. Maintaining liquidity in the form of funds in the bank can help the flow of working capital, but it comes at an opportunity cost.
With all of this in mind, I personally believe that inventory management can be of great help in improving the working capital of the company. Over-stock should be avoided and stock turnover rates should be high.
This answer is generic. There are industries that work with negative working capital, such as electronic commerce, telecommunications, etc. So do some research on working capital before answering.
What is TDS? Where do you show TDS on a balance sheet?
TDS (Tax Deducted at Source) is a concept aimed at collecting tax at every source of income. In a balance sheet, it is shown in the assets section, right after the head current asset.
What is the difference between a trial balance and a balance sheet?
A trial balance is the list of all balances in a ledger account and is used to check the arithmetical accuracy in recording and posting. A balance sheet, on the other hand, is a statement that shows the assets, liabilities, and equity of a company and is used to ascertain its financial position on a particular date.
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