Finance and accounting interview questions for freshers (India)

Technical and role questions

1. 1. What are the three main financial statements and their purposes?

   The three main financial statements are the Balance Sheet (shows assets, liabilities, and equity at a point in time), the Income Statement (shows revenues and expenses over a period), and the Cash Flow Statement (shows cash inflows and outflows during a period).

2. 2. Explain the accounting equation.

   The accounting equation is Assets = Liabilities + Equity. It shows that a company's resources are financed by debts or owner’s investments, maintaining balance in the books.

3. 3. What is depreciation and why is it important?

   Depreciation is the allocation of the cost of a tangible asset over its useful life. It helps match expenses with revenues and shows the asset’s reduced value over time.

4. 4. What is the difference between accounts payable and accounts receivable?

   Accounts payable is money a company owes to suppliers, while accounts receivable is money owed to the company by customers. Both affect cash flow management.

5. 5. How do you prepare a trial balance?

   A trial balance lists all ledger accounts with their debit or credit balances to verify that total debits equal total credits, ensuring the books are balanced.

6. 6. Can you explain what working capital is?

   Working capital is current assets minus current liabilities. It measures a company’s short-term liquidity and ability to cover day-to-day expenses.

7. 7. What is GST and how does it impact accounting?

   GST (Goods and Services Tax) is an indirect tax levied on goods and services in India. It requires proper recording of input and output tax to comply with regulations.

8. 8. Describe the difference between cash basis and accrual basis accounting.

   Cash basis records transactions only when cash changes hands, while accrual basis records revenues and expenses when they are earned or incurred, regardless of cash flow.

9. 9. What is a journal entry? Give a simple example.

   A journal entry records a financial transaction with debits and credits. Example: Buying office supplies for ₹5,000 cash is Debit Office Supplies ₹5,000 and Credit Cash ₹5,000.

10. 10. How do you reconcile bank statements?

    Bank reconciliation involves comparing the company’s cash records with the bank statement to identify and correct differences like outstanding checks or bank charges.

11. 11. What is EBITDA and why is it used?

    EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures operating performance by focusing on profitability from core operations.

12. 12. Explain the concept of double-entry bookkeeping.

    Double-entry bookkeeping records every transaction twice: once as a debit and once as a credit, ensuring the accounting equation stays balanced.

13. 13. What are current liabilities? Give examples.

    Current liabilities are obligations due within one year, such as accounts payable, short-term loans, and accrued expenses.

14. 14. How do you calculate the break-even point?

    Break-even point = Fixed Costs / (Selling Price per unit - Variable Cost per unit). It shows how many units must be sold to cover all costs.

15. 15. What is the purpose of a cash flow statement?

    It shows how cash moves in and out of a business through operating, investing, and financing activities, helping assess liquidity and financial health.

16. 16. What is goodwill in accounting?

    Goodwill is an intangible asset arising when a company acquires another for more than its net asset value, representing brand reputation or customer relations.

17. 17. Explain the difference between capital expenditure and revenue expenditure.

    Capital expenditure is spending on assets that provide long-term benefits, while revenue expenditure is for day-to-day operations and is expensed immediately.

18. 18. What are provisions and how are they recorded?

    Provisions are estimated liabilities for probable future expenses, recorded as expenses in the current period with a corresponding liability on the balance sheet.

19. 19. How does FIFO differ from LIFO inventory valuation?

    FIFO (First-In, First-Out) assumes the first goods purchased are sold first, valuing remaining inventory at recent costs. LIFO (Last-In, First-Out) assumes the last goods purchased are sold first, valuing remaining inventory at older costs. LIFO is not permitted under Indian Accounting Standards (Ind AS) or IFRS.

20. 20. What is the role of Tally or Excel in finance and accounting?

    Tally is used for accounting entries and GST compliance, while Excel helps analyze data, prepare reports, and perform financial calculations efficiently.

Project and internship questions

1. 21. Describe your final year project related to finance or accounting.

   Briefly explain the project objective, your role, the tools or methods used, and the key outcomes or learnings from [your project].

2. 22. What challenges did you face during your internship and how did you overcome them?

   Describe a specific challenge during [your internship], the actions you took to resolve it, and the positive result or learning you gained.

3. 23. How did you apply accounting concepts in your project or internship?

   Explain which accounting principles you used in [your project/internship], how you applied them, and how they helped achieve the project goals.

4. 24. What software or tools did you use in your project or internship?

   Mention tools like Excel, Tally, or ERP software used in [your project/internship], your proficiency level, and how they aided your tasks.

5. 25. How did your project or internship improve your understanding of finance and accounting?

   Discuss specific skills or concepts you learned during [your project/internship], and how the experience enhanced your practical knowledge.

6. 26. If you had to do your project again, what would you do differently?

   Reflect on any limitations or challenges in [your project], what you would change or improve, and how that would benefit the outcome.

HR and behavioural questions

1. 27. Tell me about yourself.

   Start with your academic background, mention relevant skills or internships, then highlight your interest in finance and accounting. End with your career aspirations.

2. 28. Why do you want to work in finance and accounting?

   Explain your interest in numbers, problem-solving, and business understanding. Mention how your skills align with finance roles and your eagerness to learn.

3. 29. What are your strengths?

   Mention strengths relevant to finance, like attention to detail, analytical skills, or proficiency in Excel. Provide a brief example to support each strength.

4. 30. How do you handle failure or setbacks?

   Describe a situation where you faced a challenge, the steps you took to overcome it, and what you learned to improve in the future.

5. 31. Are you willing to relocate if required?

   Express your openness to relocation, emphasizing your flexibility and willingness to adapt for career growth and company needs.

6. 32. Where do you see yourself in five years?

   Share your goal to grow in finance, gain expertise, and take on greater responsibilities, showing ambition and commitment to the field.

Find finance and accounting openings

Practise these, then apply where hiring is live: Finance and accounting jobs in India, fresher finance and accounting jobs and remote roles open to India. Before you apply, check your resume with the free ATS resume checker and draft a letter with the free cover letter generator.