Befree Business Resourceing Associate Executive Interview Questions and Answers

The 3 golden rules for accounting are the rules of debit and credit, the rule of assets = liabilities + equity, and the revenue recognition principle.

• Rule of Debit and Credit: Every transaction has equal debits and credits, ensuring the accounting equation stays balanced.

• Assets = Liabilities + Equity: This equation must always hold true, representing the financial position of a company.

• Revenue Recognition Principl...read more

Accrual concept is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

• Revenue is recognized when it is earned, not when cash is received.

• Expenses are recognized when they are incurred, not when they are paid.

• Accrual accounting provides a more accurate representation of a company's financial position.

• Example: A company records revenue...read more

Depreciation is the allocation of the cost of a tangible asset over its useful life.

• Depreciation is a non-cash expense that reflects the decrease in value of an asset over time.

• It is used to spread out the cost of an asset over its useful life for accounting and tax purposes.

• Common methods of calculating depreciation include straight-line, double declining balance, and units of production.

• Examples of depreciable a...read more

Bad debt is an amount owed by a debtor that is unlikely to be paid. Bad debt recovery entry is the process of recovering the amount owed.

• Bad debt is a loss for the company and is written off as an expense

• Bad debt recovery entry is made when the amount is recovered

• The entry is made by debiting the cash account and crediting the bad debt recovery account

• Example: If a customer owes $1000 and is unable to pay, it beco...read more

Accrued expenses/revenue are incurred but not yet paid/received, while prepaid expenses/revenue are paid/received in advance.

• Accrued expenses/revenue are recognized when incurred, regardless of payment/receipt.

• Prepaid expenses/revenue are recognized when paid/received, and then expensed/revenue recognized over time.

• Journal entry for accrued expenses: Debit expense account, Credit accrued liability account.

• Journal ...read more