Management Trainee Finance Interview Questions and Answers

OTC process in accountancy refers to the process of recording and managing transactions that occur outside of an exchange.

• OTC stands for Over-The-Counter

• It involves transactions that are not traded on a formal exchange

• OTC transactions are negotiated directly between two parties

• Examples include currency swaps, forward contracts, and options

• OTC process requires proper documentation and risk management

Standard cost is calculated by adding up the direct materials, direct labor, and overhead costs for a product.

• Determine the direct materials cost by multiplying the quantity of materials used by the cost per unit of material.

• Calculate the direct labor cost by multiplying the number of labor hours by the labor rate per hour.

• Compute the overhead cost by adding up all indirect costs, such as rent, utilities, and depreciation, and dividing by the number of units produced.

• Add the ...read more

OTC Cycle refers to the process of buying and selling securities outside of formal exchanges.

• OTC stands for Over-The-Counter

• OTC Cycle involves direct negotiations between buyers and sellers

• OTC securities are not listed on formal exchanges like NYSE or NASDAQ

• OTC securities include stocks, bonds, and derivatives

• OTC trading is less regulated and more risky than exchange trading

Accruals and actuals are accounting concepts used to record expenses and revenues in the correct period.

• Accruals are expenses or revenues that have been incurred but not yet recorded in the accounting system.

• Actuals are expenses or revenues that have been recorded in the accounting system.

• Journal entries are used to record accruals and actuals in the accounting system.

• Accruals are recorded with a debit to an expense account and a credit to an accrual account.

• Actuals are recor...read more

Depreciation journal entry records the reduction in asset value over time, impacting financial statements.

• Debit Depreciation Expense account to reflect the cost of using the asset.

• Credit Accumulated Depreciation account to reduce the asset's book value.

• Example: For a machine costing $10,000 with a 5-year life, annual depreciation of $2,000 is recorded.

• This entry affects the income statement (expense) and the balance sheet (asset value).

• Different methods: Straight-line, declin...read more