Accounting is an essential part of any company. It has a significant influence on the growth of any organization. Thus, any employer seeks to hire an accounting manager who has good knowledge and is well experienced in the field. Are you looking for accounting manager interview questions to prepare for your upcoming interview? This article lists the commonly asked interview questions for the accounting manager job and answers.
1. What are the Daily Duties of an Accounting Manager?
This question tests whether you are familiar with your duties as an accounting manager.
Tip #1: State several duties that accounting managers perform daily
Tip #2: Prove that you know your responsibilities
One of the key duties is to manage the accounting department and oversee its operations. The accounting manager monitors and analyses accounting data generates financial statements or reports and enforces and establishes proper accounting principles, policies, and methods. Other duties include assigning projects, directing staff to ensure accuracy and compliance are maintained, meeting daily financial accounting targets, and initiating corrective actions where needed.
2. What Inspired You To Become an Accountant?
The employer wants to know what motivated you to choose accounting as your career.
Tip #1: State what encouraged you to become an accountant
Tip #2: Show that you are not in the profession accidentally
My dad was an accountant. Right from my early schooling years, he used to tell me what he does and how good he felt about helping companies manage their finances effectively, including cutting costs. As the years went by, I developed more interest in this profession and became very passionate about it. As a result, I choose to study accounting to become an accountant.
3. Why is it Important to Maintain Records?
Here, the employer wants to know whether you understand the importance of maintaining accounting records effectively.
Tip #1: Demonstrate that you understand the importance of keeping proper records
Tip #2: Show that you can perform effectively in this area
Maintaining records is necessary for any business to facilitate management decisions, financial growth, and customer support. Records help to show parties where a company stands. Records also help to scrutinize the profitability of a business and remain compliant. Properly maintained records help to maintain good customer relationships and protect a business from lawsuits.
4. Differentiate Accounts Payable (AP) from Accounts Receivable (AR)
This question is intended to assess your understanding of these two concepts.
Tip #1: Describe the two terms to show their difference
Tip #2: Demonstrate that you are knowledgeable about them
Account payable is the amount a firm owes due to buying goods or services on credit from a supplier or vendor. On the other hand, accounts receivable refers to the amount of money a company is entitled to collect since it sold products on credit to a client. Thus, accounts receivable are assets, while accounts payable are liabilities.
5. What Do You Understand by TDS and How is it Shown on a Balance Sheet?
The inquirer wants to assess your knowledge about TDS and whether you understand why it is displayed on a balance sheet.
Tip #1: Define the meaning of TDS
Tip #2: Mention why it is shown on a balance sheet
TDS is an acronym for Tax Deducted at Source. The idea behind this concept is to collect tax on every income source. Governments use this tool to collect taxes and thereby minimize tax evasions. TDS is displayed in the assets section on a balance sheet, that is, immediately after the head current asset.
6. Briefly Explain the Meaning of Double Entry Bookkeeping and the Rules Involved?
Here, your knowledge regarding double-entry bookkeeping is tested, including the associated rules.
Tip #1: State the meaning of double-entry bookkeeping
Tip #2: Demonstrate that you know the rules associated with it.
Double-entry bookkeeping refers to an accounting system of bookkeeping that requires every accounting entry to have an opposite and corresponding entry to a different account. These corresponding and equal sides are called debit and credit. The rule that guides double-entry bookkeeping is that one account is debited while the other one is credited concurrently.
7. Mention Some Drawbacks of a Double Entry System?
The question further assesses your knowledge regarding a double-entry system, specifically about its disadvantages.
Tip #1: State several drawbacks of this system
Tip #2: Prove that you are well-versed in double-entry systems
One drawback of a double-entry system is that it is not easy to find errors if they are in transactions documented in books. Besides, this kind of system requires more clerical labor. If compensatory errors are present, it is challenging to locate them. Moreover, if information about a transaction is not properly documented in the journal, it is not preferable to disclose if one uses a double-entry system.
8. Describe an Accounting Process You Have Developed or are Seeking to Improve
The interviewer wants to test your innovativeness or ability to create something new.
Tip #1: Describe the accounting processes you have developed
Tip #2: Prove your ability to innovate
During my previous role, I realized that the process of tackling travel reimbursements for sales teams was so time-consuming and difficult. The expense reports of everyone were coming in late. To eliminate this issue, I formed a team to assess the process and streamline it. To be effective, the team used an application that facilitated the entire process. After transitioning to the new process, reports have always been timelier.
9. Which Financial Statement Can You Use to Review the Overall Health of a Company Quickly?
As an accounting manager, you should be familiar with essential statements. This question tests your understanding of the statement that can reveal how well or bad a company is doing.
Tip #1: State the statement that can show the health of a company
Tip #2: Demonstrate your understanding of essential statements
The cash flow statement provides a picture of the amount that a company generates. It can show whether a firm is making profits or losses. That being said, it is worth noting that to have a full overview of a company’s health, three financial statements need to be checked. These are the cash flow statement, the balance sheet, and the income statement.
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10. What Do You Understand By Working Capital?
The employer wants to assess whether you are familiar with working capital.
Tip #1: Describe the meaning of working capital
Tip #2: Be direct and provide a correct answer
Working capital is a financial metric obtained by subtracting current liabilities from current assets. In other words, it is the difference between the current assets of a company like cash and accounts receivables and its current liabilities like account payable. This metric is used to determine the operating liquidity that is available to a company. It relates to the cash available to a company at any moment after fulfilling its responsibilities.
11. What Does It Mean to Have a Negative Working Capital?
The interviewer seeks to know whether you understand the concept of negative working capital.
Tip #1: Describe negative working capital
Tip #2: Prove that you have an all-round understanding of working capital
Negative working capital is a situation where the current liabilities of a company exceed its current assets. It means liabilities that ought to be paid within a year are more than the current assets mobilized over the same period.
12. What is the difference between Accounts Receivable and Deferred Revenue?
Here, the questioner wants to assess whether you can differentiate deferred revenue from accounts receivable.
Tip #1: State what you understand by accounts receivable and deferred revenue
Tip #2: Point out the difference between these two terms
Accounts receivable consists of money owing from customers for products or services already provided. Deferred revenue, on the other hand, represents money from customers for goods and services not yet offered.
13. What Considerations are Made When Recorded PPE?
The interviewer seeks to understand whether you are well-informed about PPE and the considerations associated with it.
Tip #1: State what is considered when recording PPE
Tip #2: Be precise and give a correct answer
Four areas are considered when accounting for Property, Plant, and Equipment (PPE) on a balance sheet. These are additions (capital expenditures), depreciation, initial purchase, and dispositions. Other than these, revaluation may also be considered.
14, Explain Matching and Revenue Recognition Principles
The interviewer is interested in knowing if you are familiar with these principles.
Tip #1: Explain what the matching principle states
Tip #2: Describe the revenue recognition principle
The matching principle maintains that the timing of expenses should be matched to the period they are incurred and not the time they are paid. The revenue recognition principle prescribes the timing and process by which revenue is recognized and recorded as an item in financial statements based on a particular criterion such as transfer of ownership.
15. Name Some Accounting Software You Have Used?
Technology has been adopted in all sectors, including accounting. The interviewer wants to hear the software you have applied in your work.
Tip #1: Name the accounting applications you have employed
Tip #2: Prove you can apply technology in accounting
There are various accounting software used to facilitate different processes. Some of the accounting applications that I have used include Zoho Books, FreeAgent, FreshBooks, Tipalti, and NetSuite ERP.
16. What is the Importance of COGM to Companies?
Your understanding of COGM and its importance to businesses is sought here.
Tip #1: Describe why COGM is essential to companies
Tip #2: Show that you are knowledgeable about the importance of COGM
Cost of Goods Manufactured or COGM refers to a statement or schedule that indicates the whole cost of production for a company at a particular period. A COGM schedule is important as it gives companies a general idea of whether production costs are too low or too high relative to sales they are making.
17. What is the Biggest Challenge You Have Faced in the Profession, and How Did You Overcome It?
Here, the interviewer seeks to know whether you can inevitable challenges when they occur.
Tip #1: Describe the greatest challenge you have experienced
Tip #2: State how you overcame it
My greatest challenge has been to deal with frequently changing regulations and laws. Changes in compliance laws, tax rates, and employee compensation requirements have always been challenging in the profession. But I overcome the challenge by monitoring upcoming legislation, setting up news alerts, and subscribing to industry publications. By staying informed, I remain ahead and ensure to implement changes as they occur.
18. In Your Opinion, How Will Automation and AI Impact Accounting?
This question tests your level of awareness of how technology will impact accounting.
Tip #1: Mention the impact of AI and automation on accounting
Tip #2: Prove that you appreciate technology and are interested in its potential
From my perspective, automation and AI are great and interesting developments. They could significantly streamline operations in accounting. This is particularly true for very repetitive tasks like the replication of data between two systems. In such a case, automation and AI will relieve accountants and let them concentrate on tasks that need human intervention. That will potentially boost engagement. Besides, these technologies will reduce errors and boost productivity.
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19. Which ERP Systems are You Familiar With?
Using this question, the interviewer wants to know whether you are conversant with ERPs or you will require training to attain full productivity.
Tip #1: State the ERP systems you have used
Tip #2: Prove your familiarity with enterprise recourse systems
During my previous roles as an accountant manager, I have worked with different solutions. I’ve used Microsoft Dynamics GP, Oracle Enterprise Manager, and Netsuite ERP systems. Because I am conversant with the ERP concept, I can learn new systems quickly and as needed. Thus, I can become proficient in new ERPs fast, if needed.
20. Where Do You See Yourself In Five Years?
This question is meant to assess your planning abilities and whether you can set achievable goals.
Tip #1: Mention where you aspire to be in five years
Tip #2: Demonstrate your ability to plan and set targets
In five years, I expect to have gained significant experience in the profession. This will enable me to handle more managerial tasks and execute them effectively. I will also be able to resolve complex challenges easily. Moreover, I plan to enroll in a short course to up my skills to remain relevant and productive in the industry.
If you are preparing for your next interview, these are the top accounting manager questions that will help to assess the skills and strengths of your candidates. Using them will enable any employer to obtain a true picture of the abilities of every candidate. That way, selecting the most qualified accountant will be quick and hassle-free.