121+ Finance Manager Interview Questions And Answers

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Finance Manager Interview Questions

Question 1. Define Accounting?

According to American Institute of Certified Public Accountants (AICPA), “Accounting is the artwork of recording, classifying and summarizing in a major method and when it comes to money transactions and occasions that are, partly at the least, of a monetary character and deciphering the outcomes there of.”

American Accounting Association (AAA) has outlined accounting as “the method of figuring out, measuring and speaking financial data to allow knowledgeable judgements and choices by customers of the knowledge.”

Question 2. What Are Its Objectives?

To file the business transactions in a scientific method.
To decide the gross revenue and web revenue earned by a agency throughout a selected interval.
To know the monetary place of a agency on the shut of the monetary yr by means of getting ready the stability sheet.
To facilitate administration management.
To assess the taxable earnings and the gross sales tax legal responsibility.
To present requisite data to completely different events, i.e., house owners, collectors, workers, administration, Government, traders, monetary establishments, banks and many others.

Question 3. What Are Its Characteristics?

Accounting is the artwork of recording and classifying completely different business transactions.
The business transactions could also be fully or partially of monetary nature.
Generally the business transactions are described in financial phrases.
In accounting course of, the business transactions are summarized and analyzed in order to reach at a significant interpretation.
The evaluation and interpretations thus obtained are communicated to those that are accountable to take sure choices to find out the long run course of business.

Question 4. What Are Its Limitations?

Accounting data is expressed when it comes to money. Non financial occasions or transactions, nevertheless essential, are fully omitted.
Fixed belongings are recorded within the accounting data on the authentic price, that’s, the precise quantity spent on them plus all incidental expenses. In this fashion the impact of inflation (or deflation) is just not considered.
Accounting data is usually primarily based on estimates; estimates are sometimes inaccurate.
Accounting data can’t be used as the one take a look at of managerial efficiency on the premise of extra income.
Accounting data is just not impartial or unbiased. Accountants calculate earnings as extra of revenues over bills. But they take into account solely chosen revenues and bills.
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Question 5. What Are The Various Functions Of Accounting?

Recording: Accounting data business transactions when it comes to money. It is actually involved with making certain that each one business transactions of monetary nature are correctly recorded.
Classifying: Accounting additionally facilitates classification of all business transactions recorded in journal. Items of comparable nature are labeled below acceptable heads.
Summarizing: Accounting summarizes the labeled data. It is finished in a fashion, which is beneficial to the inner and exterior customers. Internal customers eager about these data’s are the individuals who handle the business.
Interpreting: It implies analyzing and deciphering the monetary knowledge embodied in remaining accounts. Interpretation of the info helps the administration, outsiders and shareholders in determination making.

Question 6. Explain The Different Systems Of Accounting?

Cash Basis Accounting: According to this technique, solely precise money receipts and funds are recorded within the books. The credit score transactions aren’t recorded in any respect, until precise money is obtained or paid.
Mercantile or Accrual System: According to this technique, all of the business transactions pertaining to the particular interval, whether or not of money or credit score nature, are recorded within the books. This system of accounting relies on accrual idea, which states that income is acknowledged when it’s earned and expense is acknowledged when obligation of cost arises.
Mixed System: Mixed system is modified type of pure-cash-basis accounting. Because of the truth that pure money foundation would lead to stability sheet and earnings assertion with restricted use, it necessitates the necessity of combined accounting by which some objects (particularly gross sales and interval prices are handled on money foundation and a few objects (particularly product prices and long-lived belongings) are handled on accrual foundation.

Question 7. What Is Financial Accounting ?

Financial or conventional accounting consists of the classification, recording, and evaluation of the transactions of a business in a subjective method in response to the character of expenditure in order to allow the presentation at periodic intervals, of statements of revenue or lack of the business and, on a specified date, of its monetary state of affairs.

Question 8. What Is Management Accounting ?

Management accounting consists of all these accounting companies via which help is rendered to the administration in any respect ranges, in formulation of coverage, fixation of plans, management of their execution, and measurement of efficiency. Management accounting is primarily involved with the provision of data which is beneficial to the administration in determination making for the environment friendly operating of the business and thus, in maximizing revenue.

Question 9. What Is Social Responsibility Accounting ?

Social duty accounting is a brand new part within the growth of accounting and owes its start to rising social consciousness, which has been significantly noticeable over the past twenty years or so. Social duty accounting widens the scope of accounting by contemplating the social results of business choices, along with the financial results. The function of business in society is more and more coming below higher scrutiny.

Question 10. What Is Human Resource Accounting ?

It is one other new subject of accounting which seeks to report and emphasize the significance of human sources in an organization’s earnings. It relies on the truth that the one actual lengthy lasting asset which a corporation possesses is the standard of the individuals working in it. This system of accounting is worried with ” the method of figuring out and measuring knowledge about human sources and speaking this data to events.”

Question 11. How Does Management Accounting Differs From Financial Accounting?

Financial or conventional accounting consists of the classification, recording, and evaluation of the transactions of a business in a subjective method in response to the character of expenditure in order to allow the presentation at periodic intervals, of statements of revenue or lack of the business and, on a specified date, of its monetary state of affairs. The day-to-day transactions journalized or recorded in subsidiary books are posted within the numerous ledgers and on the finish of the accounting interval, a Profit and Loss Account and a Balance Sheet are ready.

Question 12. What Is The Difference Between Expenses And Expenditure?

Expense is the outflow from a revenue oriented group whereas expenditure is the outflow from non-profit group.

Question 13. What Are Differences Between Financial Accounting And Management Accounting?

Financial Accounting: Financial accounting depicts the previous place of the priority, whereas administration accounting stresses at future. Financial accounting is necessary for all joint inventory firms and business organizations however this isn’t the case with administration accounting.

Management Accounting: Management accounting supplies knowledge to managers to assist them in making choices in regards to the future. To the opposite, monetary accounting goals at assembly the necessities of outdoor events who’ve monetary stake within the business.

Question 14. Discuss The Role Of Accountants In Modern Business Organization?

Role of Accountants in Modern Business Organization:

Writing up Accounts for Preparing Financial Statements
Audit of Accounts
Role as Management Accountant
Help to authorities, Revenue Department and Tax Payer
Role as Cost Accountant
Role in Merger, Liquidation

Question 15. Write A Short Note On Finance Officer?

Finance is the life blood of business. Procuring monetary sources and their considered utilization are the 2 essential actions of monetary administration which is a specialised operate. The finance supervisor has to strike a stability between the present wants of the enterprise for money and the wants of the shareholders for enough return. Often finance supervisor and controller are inter-changeable phrases and solely one in every of these two positions could also be present in an organization.

Question 16. What Do You Mean By Basic Accounting Concepts?

Accounting has come to current standing after a interval of a number of hundred years. During this era sure accounting assumptions, ideas and conventions have emerged. Accountants universally within the recording, classification, summarization and reporting of the transactions comply with these. Accounting assumptions, ideas and conventions are known as Generally Accepted Accounting Principles (GAAP) since they’ve been generally accepted by skilled accounting world as normal tips for getting ready monetary statements and studies.

Question 17. List The Basic Accounting Concepts?

The Institute of Chartered Accountants of India in its Accounting Standard-I (AS-I) has said that going concern, accrual and consistency are elementary accounting assumptions. For the sake of comfort all accounting ideas are mentioned below two headings:

Basic accounting ideas.
Accounting ideas associated to earnings measurement.

Question 18. What Are Basic Accounting Concepts?

Basic Accounting Concepts are:

Entity Concept.
Money Measurement Concept.
Going Concern Concept.
Cost Concept.
Dual Aspect Concept.
Full Disclosure Concept.
Objectivity Concept.
Accrual Concept.

Question 19. What Are Accounting Concepts Related To Income Measurement?

Accounting ideas associated to earnings measurement are:

The Time Period Concept (Periodicity Concept).
The Revenue Recognition (Realization) Concept.
The Matching Concept.
The Materiality Concept.
The Consistency Concept.
The Conservatism (Prudence) Concept.

Question 20. Discuss The Importance Of Setting Accounting Standards?

Following is the significance of accounting requirements:

Standards cut back or eradicate all collectively complicated variations within the accounting remedy used to organize monetary statements.
With completely different firms following similar requirements, comparability of their monetary insurance policies and monetary outcomes turns into simpler.
Accounting requirements maintain valuing inventories, contingencies, development contracts, mounted prices, and many others. They cowl all facets of monetary actions of firm.
The requirements assist the traders for taking determination on funding.
Setting requirements is beneficial to each the corporate & and the investor.

Question 21. What Are The Purposes Of Accounting Information?

Score Keeping:
The score-keeping operate is one the first functions of accounting data. It principally offers with the monetary well being of the enterprise.

Attention Directing :
Attention directing is nothing however the technique of giving a sign to the person of accounting details about the necessity to take a choice. As such the accounting data provided the person’s consideration to take determination.

Problem Solving:
The drawback fixing operate of accounting data includes provisions of such data, which allows the supervisor to seek out options to the issues.

Question 22. What Are The Uses Of Earnings Information?

Appropriation Decision.
Problem Identification Using Earning Data.
Determining the Market Value of a Firm.

Question 23. What Is A Balance Sheet?

After ascertaining the revenue or lack of the business, the businessman needs to know the monetary place of his business. For this goal he prepares a press release of Assets and Liabilities, which is named Balance Sheet.

Question 24. What Are The Objectives Of Preparing Balance Sheet?

Principal Objective:
The major goal of getting ready stability sheet is to know the monetary place of the business at a specific date.
Subsidiary Objectives:
Though the primary intention is to know the precise monetary place of the agency at a specific date, but it serves different goal as nicely.

It offers details about the precise and actual proprietor’s fairness. Though the capital of the proprietor signifies proprietor’s fairness, but another liabilities are to be accounted for towards it additionally.
It helps the agency to make provisions towards potential future losses. A provision is made within the type of the Reserves.

Question 25. Explain Its Characteristics Of Balance Sheet?

The Balance Sheet as distinct from different monetary statements has the next traits:

It is a press release and never an account. Although stability sheet is part of the ultimate accounts and ready with the assistance of accounts, but it’s not an account however a press release.
It is all the time ready on a specific date, and thus reveals the place at that date and never for a interval.
It has no debit aspect and credit score aspect. Nor the phrases ‘To’ and ‘By’ are used earlier than the names of the accounts proven therein. The headings are Liabilities and Assets.
It reveals the monetary place of the business concern.
It reveals what the agency owes to others and likewise what others owe to the agency.
The totals of Liabilities and Assets all the time are equal.

Question 26. Write A Short Note On Uses Of Balance Sheet?

It reveals the monetary place of the business concern.
It reveals what the agency owes to others and likewise what others owe to the agency.
It reveals the character and worth of the belongings.
It additionally displays the liquidity of a agency.

Question 27. What Is A Balance Sheet And What Information Does It Convey To An Outsider?

The stability sheet is a press release, which reveals the monetary place of a business on a specific date. It is a press release of balances of all of the accounts actual and private, debit balances of all such accounts symbolize belongings and credit score balances symbolize the liabilities.

1. Principal Objective:
The major goal of getting ready stability sheet is to know the monetary place of the business at a specific date.

2. Subsidiary Objectives:
Though the primary intention is to know the precise monetary place of the agency at a specific date, but it serves different goal as nicely.

It offers details about the precise and actual proprietor’s fairness. Though the capital of the proprietor signifies proprietor’s fairness, but another liabilities are to be accounted for towards it additionally.
It helps the agency to make provisions towards potential future losses. A provision is made within the type of the Reserves.

Question 28. What Information Does It Convey To An Outsider?

Balance sheet is ready with a view to measure the true monetary place of a business concern at a specific cut-off date. It reveals the monetary place of a business in a scientific type. It is a screenshot of the monetary place of the business. At one look, the place of the business, at a specific level of time, will be understood. The numerous teams within the firm can draw helpful inferences from an evaluation of the knowledge contained within the stability sheet.

Question 29. Explain The Meaning Of Owner’s Equity?

Owner’s Equity is the residual curiosity within the belongings of the enterprise. Therefore the proprietor’s fairness part of the stability sheet reveals the quantity the proprietor have invested within the entity. However, the terminology ‘owner’s fairness’ varies with completely different types of group relying upon whether or not the enterprise is a joint inventory firm or sole proprietorship/partnership concern.

Question 30. Explain The Meaning Of Assets?

“The complete property of all types possessed by or owing to an individual or group is named belongings. Assets are priceless sources owned by a business and purchased at a measurable money price”.

Question 31. Explain The Meaning Of Fixed Assets?

These are these belongings, that are acquired for comparatively lengthy intervals for carrying on the business of the enterprise. Such belongings aren’t meant for resale. For instance, Land and Building, Plant and Machinery and many others.

Question 32. Explain The Meaning Of Accrued Liabilities?

Accrued liabilities represents bills or obligations incurred within the earlier accounting interval however the cost for a similar might be made within the subsequent interval. In many circumstances the place funds are made periodically, akin to wages, lease and comparable objects, the final month’s cost many seem as accrued liabilities (particularly if the apply is to pay the identical on the primary working day of a month). This obligation proven on the stability sheet signifies that the agency owed the mentioned quantity on the stability sheet date.

Question 33. Explain The Meaning Of Contingent Liability?

These are liabilities which can exist or not, will rely upon any future incident. For the sake of shareholders, it’s proven within the footnote within the Balance Sheet. The objects, which can come below this sub-heading, are:

Claims towards firm, that are nonetheless not accepted by the corporate.
Liability for quantity uncalled on partly paid shares.
Arrears of mounted cumulative dividends.
Estimated quantity of incomplete contracts (capital expenditures), association of which isn’t made.

Question 34. What Do You Mean By Capital Expenditure And Revenue Expenditure?

Capital Expenditure:
All expenditure incurred in buying mounted belongings, or enhancing the prevailing ones by rising its effectivity (e.g. by offering substitution, alteration or renovation), or effecting financial system in operation of present belongings (e.g. by attaching energy motor at hand pushed machine) are known as capital expenditure.
Revenue Expenditure:
They are all such bills, that are incurred on the group and for operating the business. The advantages of such bills are restricted to the accounting interval solely. They are incurred to keep up the incomes capability of the business, whereas capital expenditure are incurred to enhancing the incomes capability of the business.

Question 35. Explain Deferred Revenue Expenditure?

Sometimes some expenditure is incurred which by nature is income expenditure, however its advantages are more likely to be derived over a variety of years. If income expenditure is incurred throughout the present yr however paid as advance for the approaching yr(s), such expenditure is named ‘Deferred Revenue Expenditure’.

Question 36. Explain Capital Receipts And Revenue Receipts?

Capital receipts, like capital expenditures don’t have an effect on revenue, and are both proven as a legal responsibility or extra usually as a discount from the belongings. Any extra realization over the e book worth of an asset might, nevertheless, be handled as a income receipt and accounted for as such. It is, subsequently, important to know the excellence.

Examples of Capital Receipts:

Capital invested by the house owners of the business.
Amount obtained from gross sales of mounted belongings or investments.
Conversion into Cash of any Asset besides inventory.
Loans obtained.

Question 37. What Is Capital Loss And Revenue Loss?

Capital loss is that loss which happens attributable to sale of some mounted asset. For examples, loss attributable to problem of shares or debentures at a reduction, loss attributable to misappropriation of Cash from the workplace or forfeiture of safety deposited for getting an company.
Revenue losses are these losses, which happen attributable to sale and buy of products. For instance, Bad Debts, loss attributable to fall within the worth of products and many others.

Question 38. Explain The Importance Of Preparing Trading Account?

It supplies details about gross revenue. The present determine will be in contrast with earlier ones and causes discovered for variations. Accordingly plan will be launched for future progress of the agency.
Ratio of gross revenue to gross sales may also help the dealer to enhance his business administration.
Ratio of direct bills to gross sales will assist the dealer to manage and rationalize the bills.
Comparison of ‘inventory in hand’ of the present yr with these of the earlier years. Reasons for variation will be came upon and steps will be taken to regulate issues extra profitably.
Ratio of price of products bought to complete sale proceeds may also help the dealer in fixing the costs of his merchandise.
Precautionary measures will be taken to keep away from potential losses by analyzing the objects of direct bills.

Question 39. What Is A Profit & Loss Account?

“A Profit and Loss account is an account into which all positive aspects and losses are collected with the intention to confirm the surplus of positive aspects over the losses or vice versa”.

Question 40. Differences Between Management Accounting And Financial Accounting?

The variations between administration accounting and monetary accounting embody:

Management accounting supplies data to individuals inside a corporation whereas monetary accounting is especially for these outdoors it, akin to shareholders.
Financial accounting is required by regulation whereas administration accounting is just not. Specific requirements and codecs could also be required for statutory accounts akin to International Financial Reporting Standards.
Financial accounting covers the whole group whereas administration accounting could also be involved with explicit merchandise or price centres.

Question 41. What Is Demat Account? What Is The Use Of It?

Demat means Dematerialisation of share, in easy it’s an account with which an individual can commerce in safety market with out which an individual can’t purchase or promote any share in safety market.

Question 42. What Are The Basic Requirements Of Preparing Profit & Loss Account?

Prior-period objects.
Extra-ordinary objects.
Change in accounting insurance policies.
Accrual foundation of accounting.

Question 43. Distinguish Between Straight Line And Written Down Method Of Providing Depreciation?

Difference between Straight Line Method and Written Down Value Method:

Amount of Depreciation: The quantity of depreciation stays the identical all of the years below straight-line technique, whereas it goes on lowering yearly below the written down worth technique.
Computation of Depreciation: Under straight line technique of depreciation, depreciation is charged on the unique price of the asset, whereas it’s charged on the decreasing stability yearly below written down worth technique.
Value of Asset: Under the straight line technique the worth of the asset grow to be nil on the finish of its working life however it by no means turns into nil below the written down worth technique.
Rate of Depreciation: Normally, the speed of depreciation is decrease below straight-line technique whereas it’s larger below the diminishing stability technique.
Recognition: The straight line technique of depreciation is just not acknowledged by the earnings tax authorities whereas the later technique is nicely acknowledged by them.

Question 44. Explain The Following Gross Profit?

Gross Profit is obtained by subtracting the price of items bought from Net gross sales.
Gross Profit = Net Sales – Cost of Goods Sold.
Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses – Closing Stock.
And Net Sales = Total Sales – Sales Return.

Question 45. Explain The Following Operating Profit?

Operating Profit means revenue earned by the priority from its business operation and never from the opposite sources. While calculating the web revenue of the priority all incomes both they don’t seem to be a part of the business operation like Rent from tenants, Interest on Investment and many others. are added and all non-operating bills are deducted.

Question 46. Define The Terms ‘fund’ And ‘circulation’ In The Context Of The Funds Flow Statement. How Is A Funds Flow Statement Prepared?

Meaning of the time period ‘Fund’: –
The time period ‘Fund’ has been assigned completely different meanings by completely different individuals. In slender sense ‘Funds’ means money and Bank stability. To many individuals funds is nothing however having the web impact of assorted business occasions on the premise of money. This explains the development in direction of the preparation and presentation of “Cash Flow Statement” in revealed report of accounts.
Funds = Current Assets – Current Liabilities = Working Capital
Meaning of the time period ‘Flow’: –
The time period ‘Flow’ means change. Therefore circulation of funds means change in working capital. The change in funds could also be both optimistic or unfavourable. It could also be influx of funds or outflow of funds.

Question 47. Write A Short Note On Cost Accounting?

Cost accounting is worried with the applying of costing rules, strategies and methods for ascertaining the prices with a view to controlling them and assessing the profitability and effectivity of the enterprise. In the preliminary levels price accounting was merely thought-about to be a way for ascertainment of prices of services or products on the premise of historic knowledge. In course of time it was realized, attributable to aggressive nature of the market, that ascertaining of price was not so essential as controlling prices was.

The goals of price accounting are:

Ascertaining the prices.
Controlling the prices.
Reducing the prices.

Question 48. Explain The Meaning Of Fixed Cost?

These are the prices which stay constants no matter the quantum of output inside and as much as the capability that has been constructed up. Examples of such prices are: lease, insurance coverage expenses, administration wage and many others.

Fixed Cost is split into :
(i) dedicated mounted prices and
(ii) discretionary mounted prices.

Committed Fixed Costs: This consists largely of these mounted prices that come up from the possession of plant, tools and a fundamental organizational construction. For instance, as soon as a constructing is constructed and plant is put in noting a lot will be accomplished to cut back the prices akin to depreciation, property taxes, insurance coverage and salaries of the important thing personnel and many others.
Discretionary Fixed Costs: These are these prices, that are set at mounted quantity for particular time intervals by the administration within the budgeting course of. These prices straight replicate high administration insurance policies and don’t have any explicit relationship with quantity of output. These prices can subsequently be decreased or eradicated solely, if the circumstances so require.

Question 49. Explain The Meaning Of Shut Down Costs?

Those prices which proceed to be incurred even when a plant is briefly shut-down, e.g. lease, charges, depreciation, and many others. these prices can’t be eradicated with the closure of the plant. In different phrases, all mounted prices, which can’t be prevented throughout the momentary closure of a plant, might be referred to as shut down prices.

Question 50. Explain The Meaning Of Sunk Costs?

Historical prices incurred previously are referred to as sunk prices. They play no function in determination making within the present interval. For instance, within the case of a choice referring to the substitute of a machine the written down worth of the prevailing machine is a sunk price .

Question 51. Explain The Meaning Of Opportunity Cost?

This price refers back to the worth of sacrifice made or advantage of alternative foregone in accepting another plan of action. For instance, a agency financing its enlargement plans by withdrawing money from its financial institution deposits. In such a case the numerous curiosity on the financial institution deposit is the chance price for finishing up the enlargement plant.

Question 52. Explain The Meaning Of Controllable Costs?

These are prices, which will be influenced by the motion of a specified member of a corporation. For instance, the foreman of a manufacturing division can management the utilization of energy or uncooked materials in his division. These are, subsequently, controllable prices so far as he’s involved.

Question 53. Explain The Meaning Of Uncontrollable Costs?

These are prices that can’t be influenced by the motion of a specified member of an endeavor. For instance, the foreman of a manufacturing division can management the wastage of energy in his division, however he can’t management the ability, which is being wasted within the powerhouse itself leading to larger price per unit of energy to him.

Question 54. Explain The Meaning Of Variable Costs?

Variable prices are likely to fluctuate with the quantity of output. Any improve within the quantity of manufacturing lead to a rise within the variable price and vice-versa. For instance, price of fabric; price of labor, and many others.

Question 55. Explain The Meaning Of Imputed Or Hypothetical Costs?

These kinds of prices aren’t recorded within the books of accounts. These prices aren’t truly incurred however are thought-about whereas making a choice. For instance, in accounting, curiosity and lease are acknowledged solely as expenditure when they’re truly paid. But in costing they’re charged on a notional foundation whereas ascertaining the price of a product.

Question 56. What Is A Cost Sheet?

A Cost Statement or Cost Sheet is “a doc which supplies for the meeting of the detailed Cost of a Cost Center or Cost Unit”.It is an in depth assertion depicting the subdivision of price organized in a logical order below completely different heads.

Question 57. Explain The Meaning Of Absorption Costing?

Absorption costing method can be termed as Traditional or Full Cost Method. According to this technique, the price of a product is decided after contemplating each mounted and variable prices. The variable prices, akin to these of direct supplies, direct labor, and many others. are straight charged to the merchandise, whereas the mounted prices are apportioned on an appropriate foundation over completely different product manufactured throughout a interval.

Question 58. Explain The Meaning Of Marginal Costing?

Marginal costing is a particular method used for managerial determination making. The strategy of marginal costing is used to supply a foundation for the interpretation of price knowledge to measure the profitability of various merchandise, processes and value facilities in the middle of determination making.

Question 59. Explain The Meaning Of Break Even Point?

The break-even level is the purpose or state of a business at which there’s neither a revenue nor a loss. In different phrases, it’s at this level the place the contribution is the same as mounted bills.

Question 60. Explain The Meaning Of Marginal Cost?

The strategy of marginal costing is worried with marginal price. The Institute of Cost and Management Accountants, London, has outlined Marginal Cost as “the quantity at any given quantity of output by which mixture prices are modified if the quantity of output is elevated or decreased by one unit”. Therefore, Marginal Cost refers to extend or lower within the quantity of price on account of improve or lower of manufacturing by a single unit. Marginal Cost ordinarily is the same as the rise in complete variable price as a result of throughout the present manufacturing capability a rise of 1 unit in manufacturing will trigger a rise in variable price solely.

Question 61. Examine The Relevance Of Marginal Costing In The Present Say Context Of Global Business Environment, With Suitable Illustrations, Comparing It With Other Techniques?

Marginal costing is a particular method used for managerial determination making. The strategy of marginal costing is used to supply a foundation for the interpretation of price knowledge to measure the profitability of various merchandise, processes and value facilities in the middle of determination making. It can, subsequently, be used at the side of the completely different strategies of costing akin to job costing, course of costing and many others., and even with different methods akin to normal costing or budgetary management.

Question 62. What Are The Advantages Of Marginal Costing ?

The marginal price stays fixed per unit of output whereas the mounted price stays fixed in complete. Since marginal price per unit is fixed from interval to interval inside a brief span of time, agency choices on pricing coverage will be taken.
Overheads are recovered in marginal costing on the premise of pre-determined charges. If mounted overheads are included on the premise of pre-determined charges, there might be under-recovery of overheads if manufacturing is much less or if overheads are extra.
Advocates of marginal costing argue that below the marginal costing method, the inventory of completed items and work in progress are carried on marginal price foundation and the mounted bills are written off to revenue and loss account as interval prices.
Marginal costing helps in finishing up break-even evaluation, which reveals the impact of accelerating or lowering manufacturing exercise on the profitability of the corporate.
Marginal costing helps the administration in taking a variety of business choices like make or purchase, discontinuance of a specific product, substitute of machines, and many others.

Question 63. What Are Limitations Of Marginal Costing?

It is troublesome to categorise prices precisely into mounted and variable. Most of the bills are neither completely variable nor wholly mounted.
Contribution itself is just not a information except it’s linked with the important thing issue
Sales workers might mistake marginal price for complete price and promote at a worth, which can lead to loss or low income. Hence, gross sales workers must be cautioned whereas giving marginal price.
Overheads of mounted nature can’t altogether be excluded significantly in massive contracts whereas valuing the work-in-progress. In order to point out the proper place mounted over heads must be included in work-in-progress.
Some of the assumptions relating to the habits of assorted prices and many others., aren’t essentially true in a sensible scenario. For instance, the belief that mounted price will stay static all through is just not appropriate.

Question 64. What Is Cvp Analysis?

Profit is crucial measure of the agency’s efficiency. In the free-market financial system, revenue is a information for allocating sources effectively. An evaluation of the consequences of assorted components on income is an important step within the monetary planning and decision-making. The analytical method used to review the habits of revenue in response to the modifications in quantity, prices and costs is named the cost-volume-profit (CVP) evaluation.

Question 65. Explain Briefly The Meaning Of Margin Of Safety?

The margin of security represents the distinction between the gross sales at break-even level and the entire gross sales. It will be expressed as a proportion in addition to in worth. The measurement of the margin of security reveals the energy of the business. If the margin of security is small, it might point out that the agency has massive mounted bills and is extra susceptible to modifications in gross sales. In different phrases, if the margin of security is massive a slight fall in gross sales might not have an effect on the business very a lot but when it small even a slight fall in gross sales might adversely have an effect on the business.

Question 66. What Is Variance In The Context Of Financial Management?

A Variance is the distinction between the precise price and normal price. If the impact of the variance is to extend the revenue, the variance is alleged to be favorable. In the reverse case, it’s antagonistic or unfavorable.

Question 67. Distinguish Between Direct Material Price Variance And Direct Material Usage Variance?

Direct Material Price Variance:
It is that portion of the direct materials price variance which is because of the distinction between the usual worth specified and the precise worth paid.

DMPV = Actual Quantity x (Standard price- Actual worth)
If the precise worth is greater than the usual worth, the variance could be antagonistic and vice versa.

Direct Material Usage or Quantity Variance:
It is brought about because of the distinction between the usual amount specified (for the output achieved) and the precise amount used.

DMUV = Standard fee x (Standard amount for precise output – Actual amount).

Question 68. What Do You Mean By Ratio Analysis?

Ratio evaluation is likely one of the methods of monetary evaluation to judge the monetary situation and efficiency of a business concern. Simply, ratio means the comparability of 1 determine to different related determine or figures.

Question 69. What Is Meant By Accounting Ratios?

A relationship between numerous accounting figures, that are linked with one another, expressed in mathematical phrases, is named accounting ratios.

Question 70. Classify The Various Turnover/exercise/efficiency Ratios. Also Explain The Meaning, Method Of Calculation And Objective Of These Ratios?

Classification of Turnover/Activity/Performance Ratios:

Capital Turnover Ratio
Fixed Assets Turnover Ratio
Working Capital Turnover Ratio
Stock Turnover Ratio
Debtors Turnover Ratio
Debt Collection Period

Question 71. What Do You Understand By Capital Structure?

Capital construction choices goals at figuring out the kinds of funds an organization ought to search to finance its funding alternative and the preparation by which these funds must be raised.

Question 72. What Is The Relationship Between Financial And Operating Leverage?

Relationship between monetary and working leverage: In business terminology, leverage is utilized in two senses: Financial leverage & Operating Leverage.

Question 73. What Do You Understand By “budgeting”?

A funds is a plan expressed in quantitative, normally financial time period, overlaying a selected time period, normally one yr.

Question 74. What Do You Understand By Zero-based Budgeting?

The strategy of zero base budgeting supplies an answer for overcoming the constraints of conventional budgeting by enabling high administration to concentrate on priorities, key areas and options of motion all through the group.

Question 75. What Do You Understand By Cash Flow Statement?

A Cash Flow Statement is just like the Funds Flow Statement, however whereas getting ready funds circulation assertion all the present belongings and present liabilities are considered.

Question 76. What Is Business Process Execution Language (bpel)?

Business Process Execution Language is a language that’s executable for interplay specification together with Web companies. The processes of BPCL will export and import data by using completely net service interfaces.

Question 77. Explain Bpel And Workflow Foundation?

BPEL is process-centric, the place as workflow basis is human centric. BPEL net companies primarily based language for business course of habits which can be utilized for composite net companies, the place as workflow basis is a programming mannequin for shortly constructing workflow enabled purposes that are person interface-centric.

Question 78. What Is Role Of Bpel?

BPEL is a language for comparatively easy description of how net companies are composed into business processes. BPEL is the primary of its type.

Allows summary and executable processes.
Gained assist by Majority of firms.
Allows software program to exist and comparable processes will be executed and developed.
Question 79. Explain About Bpel Orchestration And Choreography?

The management over the online companies which might be concerned and coordinating the execution of various operations on the net companies invoked within the operation is taken by the central course of in orchestration as per the necessities. The concerned net companies are unaware of this course of. With operations which might be explicitly outlined and the order of invocation of the online companies, the orchestration is centralized.

Choreography doesn’t depend on a central coordinator. The net companies concerned within the choreography is conscious precisely the execution of its operations and whom to work together with. Choreography is a collaborative effort. It focuses on messages trade. The consciousness of business course of, operations to execute, messages to trade, and the time of message trade are wanted for all individuals of choreography.

Question 80. Explain About Bpel Executable And Abstract Processes?

The precise particulars of business processes will be specified by executable processes. These will be executed by orchestration engine. An executable course of is used most often of BPEL. The public message trade amongst events is just allowed by summary business course of. The inside particulars of course of flows don’t embody and aren’t executable.

Question 81. What Is Oracle Bpel Process Manager?

Oracle BPEL Process Manager is a BPEL engine. It is a member of Oracle Fusion middleware household of merchandise. Orchestration disparate purposes and net companies are enabled enterprises by Oracle BPEL Process Manager. Quick constructing and deploying this processing capability in a standards-based method delivers vital performance for growing SOA.

Question 82. What Is Bpmn Standard For Business Process Modeling And Analysis?

The BPMN specifies a graphical notation for expressing business processes in a Business Process Diagram. Both technical customers and business customers are supported for business processes utilizing BPMN. BPMN supplies a standardized, easy technique of course of data communication to different business customers, prospects, suppliers and course of implementers.

Question 83. What Is Gaap?

Generally Accepted Accounting Principles.

Question 84. What Is The Classification Of Allowance For Uncollectible Accounts?

Contra-Asset to Accounts Receivable.

Question 85. What Is The Classification Of Prepaid Rent And Prepaid Insurance?


Question 86. What Is The Classification Of Accumulated Depreciation?


Question 87. What Is The Classification Of Unearned Revenue?


Question 88. What Is The Purpose Of The Closing Entries?

To switch the momentary account balances to the Owner’s Capital account.

Question 89. What Is The Purpose Of Adjusting Entries?

To guarantee account balances correctly replicate outcomes of business operation.

Question 90. What Is The Purpose Of The Statement Of Owner’s Equity?

To replace the Owner’s Capital account (Retained Earnings).

Question 91. What Accounts Are Listed On The Income Statement?

Revenues, Expenses.

Question 92. What Accounts Are Listed On The Balance Sheet?

Owner’s Equity/Retained Earnings/Contributed Capital.
Question 93. Tell Me How Can We Use E4x In Mozilla And Mozilla Based Browers?

To make use E4X with Mozilla and Mozilla primarily based browsers (like: Netscape) we used Spidermonkey JavaScript engine. It has been prolonged to implement E4X however presently we will solely use it in nightly trunk builds. The current releases Mozilla 1.7 suite, Firefox 1.0, Netscape 7.2 doesn’t supported E4X.

Question 94. What Accounts Increase With A Credit?

Capital/Retained Earnings/Contributed Capital.

Question 95. What Accounts Increase With A Debit?

Question 96. What Does Accrual Accounting Mean?

Record revenues when earned and bills when incurred no matter money circulation .

Question 97. What Are The Four Financial Statements?

Income assertion.
Statement of Owner’s Equity/Retained Earnings.
Balance Sheet.
Statement of Cash Flows.

Question 98. Explain The Accounts Payable Cycle.

Demonstrate your data of this cycle – the size of time it takes the corporate to pay its accounts payable – and what the implications of the size of this cycle are for the corporate, for instance money circulation.

Question 99. What Is The Distinction Between Cost Accounting And Management Accounting?

Cost accounting is worried with price accumulation for stock valuation to satisfy the necessities of exterior reporting and inside revenue measurement. Management accounting pertains to the supply of acceptable data for decision-making, planning, management and efficiency analysis.

Question 100. What Is An Ea In Accounting?

EA stands for Enrolled Agent. It is a certification by the Internal Revenue Service given to these certified to apply earlier than them. To grow to be an EA, one should cross a take a look at given by the IRS, the aim of which is to strive to make sure that solely certified individuals apply earlier than the IRS. You will not be a Power of Attorney for the IRS except you might be an EA or another licensed particular person akin to a CPA or an lawyer.

Question 101. What Are The Different Branches Of Accounting?

Following are completely different branches of accounting:

Cost Accounting.
Financial Accounting.
Management Accounting.

Question 102. Is Financial Accounting Necessary?

Yes, the accounting calculates the price of capital to the business. It compares the present, anticipated, and historic charges of return. Suppose an organization is making 12% returns however borrowing money through the use of the proprietor’s bank card at 22% be good to know that.

Question 103. What Is Accounting Normalization?

It is eradicating objects from the earnings assertion or stability sheet that don’t usually happen throughout the course of business to raised estimate the worth of an organization.

Question 104. What Are The 4 Phases Accounting?


Question 105. What Are The Functions Of Accounting?

Accounting includes the creation of monetary data of business transactions, circulation of finance, the method of making wealth in a corporation, and summarizing the monetary place of a business at a given second in time.

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