Senior Financial Accountant Interview Questions and Answers

Understanding journal entries for deferred and unbilled revenue, along with inventory recording.

• Deferred Revenue: Recognized when cash is received before services are performed. Journal Entry: Debit Cash, Credit Deferred Revenue.

• Example: A company receives $1,000 for a service to be provided next month. Entry: Debit Cash $1,000, Credit Deferred Revenue $1,000.

• Unbilled Revenue: Recognized when services are performed but not yet billed. Journal Entry: Debit Unbilled Revenue, Cr...read more

I allocate cost by analyzing expenses and assigning them to appropriate cost centers. I manage payables by ensuring timely payments and maintaining accurate records.

• Analyze expenses and categorize them into appropriate cost centers

• Ensure timely payments to vendors and suppliers

• Maintain accurate records of all payables and expenses

• Reconcile accounts payable ledger to ensure that all payments are accounted for

• Communicate with vendors and suppliers to resolve any payment issues

• I...read more

Deferred tax assets reduce future tax liabilities, while deferred tax liabilities increase them, reflecting timing differences in accounting.

• Deferred tax assets arise when taxable income is greater than accounting income, e.g., carryforward of tax losses.

• Deferred tax liabilities occur when accounting income is greater than taxable income, e.g., accelerated depreciation.

• Deferred tax assets can be utilized to offset future tax payments, improving cash flow.

• Deferred tax liabilit...read more

Unbilled revenue is revenue that has been earned but not yet invoiced, while unearned revenue is payment received for goods or services not yet delivered.

• Unbilled revenue is recognized as accounts receivable on the balance sheet, while unearned revenue is recognized as a liability.

• Unbilled revenue represents work that has been completed but not yet billed to the customer, while unearned revenue represents advance payments for goods or services.

• Examples of unbilled revenue inc...read more

IFRS 115 outlines the principles for recognizing revenue when goods or services are transferred to customers.

• IFRS 115 establishes a five-step model for recognizing revenue from contracts with customers.

• Revenue is recognized when control of goods or services is transferred to the customer.

• The amount of revenue recognized should reflect the consideration the entity expects to receive in exchange for those goods or services.

• IFRS 115 requires entities to disclose information abou...read more

Deferred revenue is revenue received by a company in advance of earning it, resulting in a liability on the balance sheet.

• Deferred revenue represents a liability for the company until the goods or services are delivered to the customer.

• It is common in subscription-based businesses where customers pay upfront for services that will be provided over time.

• Once the revenue is earned, it is recognized on the income statement.

• Examples include magazine subscriptions, software licens...read more

Ageing criteria and reports are used to analyze the financial health of a company by categorizing accounts based on their age.

• Ageing criteria categorize accounts based on how long they have been outstanding, such as current, 30 days, 60 days, 90 days, etc.

• Reports generated based on ageing criteria help identify potential issues with accounts receivable or payable, and track the effectiveness of collection efforts.

• Ageing reports are commonly used in financial accounting to ass...read more