Prepare for your next interview with this comprehensive list of 50 essential questions and answers for junior accountants. This guide is designed for quick preparation, helping you recall core financial accounting concepts. Rather than memorization, a few reads will help you formulate confident and well-structured answers.
This post is the first in a new “Accounting and Finance” series on my blog, created to share practical knowledge and assist professionals like you. I encourage you to leave your feedback and suggestions for future improvements.
Foundational Accounting Principles
- What are the basic financial statements?
- Balance Sheet, Income Statement, and Cash Flow Statement—each provides unique insights into a company’s financial health.
- What is double-entry accounting?
- Every transaction affects at least two accounts—one debit and one credit—keeping the accounting equation in balance.
- What is a trial balance?
- A report that ensures total debits equal total credits, used to detect recording errors before preparing financial statements.
- What’s the difference between accounts payable and accounts receivable?
- Accounts Payable: Money owed to suppliers.
- Accounts Receivable: Money owed to the company by customers.
- How do you handle accounting errors?
- Identify the source → Reverse the incorrect entry → Record the correct one → Document and get approval if needed.
- What is depreciation?
- The systematic allocation of an asset’s cost over its useful life due to wear and tear or obsolescence.
- What is working capital?
- Working Capital = Current Assets – Current Liabilities. It indicates a company’s short-term liquidity and operational efficiency.
- How do you prioritize tasks during month-end closing?
- Start with time-sensitive tasks (e.g., accruals, reconciliations), then move to other entries while managing deadlines and accuracy.
- What’s the difference between cash basis and accrual basis accounting?
- Accrual basis records revenues and expenses when they’re earned or incurred. Cash basis records transactions only when cash is exchanged.
- What is the purpose of a general ledger?
- The general ledger is the complete record of all a company’s financial transactions. It provides a detailed, organized history of all accounts.
- Describe the accounting cycle.
- The accounting cycle is a step-by-step process that businesses use to record and process financial transactions, starting with a transaction and ending with financial statements.
- What is the purpose of closing entries?
- Closing entries transfer the balances of temporary accounts (revenue, expenses) to retained earnings at the end of a period, resetting them to zero for the next period.
- What is an accrual? Can you give an example?
- An accrual is a record of an expense incurred but not yet paid, or revenue earned but not yet received. Example: a company receives a utility bill for services used this month, which it will pay next month.
- What is a journal entry?
- A journal entry is the initial record of a business transaction, showing the accounts to be debited and credited.
- What’s the difference between fixed and variable costs?
- Fixed costs remain constant regardless of production volume (e.g., rent). Variable costs change in proportion to production volume (e.g., raw materials).
Technical Skills and Software
- What accounting software are you familiar with?
- (Customize this: Tally, QuickBooks, SAP, Oracle, Zoho Books, Microsoft Dynamics, etc.)
- What is an ERP system?
- An Enterprise Resource Planning (ERP) system is business management software that integrates all facets of an operation, including accounting, finance, and human resources, into a single database.
- How would you reconcile a bank statement?
- I’d compare the company’s cash account balance to the bank statement balance, identifying and adjusting for outstanding checks, deposits in transit, and bank fees to find the true cash balance.
- What is a chart of accounts?
- A chart of accounts is a list of all accounts used by a company to classify and record financial transactions in the general ledger.
- What is the purpose of a subsidiary ledger?
- A subsidiary ledger provides a detailed breakdown of a specific general ledger account, like Accounts Receivable, showing a list of all individual customers who owe money.
- How do you use Excel in accounting?
- I use it for data analysis, creating pivot tables, performing reconciliations, and using functions like VLOOKUP and SUMIF to manipulate data efficiently.
- What is a deferred expense?
- A deferred expense (or prepaid expense) is a cost that has been paid but not yet used or consumed. It is an asset on the balance sheet until it is expensed over time.
- What is the difference between a debit and a credit?
- A debit increases asset and expense accounts and decreases liability, equity, and revenue accounts. A credit does the opposite.
- How would you audit a bank reconciliation?
- I’d verify that all outstanding items are valid and correct, check for any unrecorded transactions, and confirm the accuracy of the final adjusted balances.
- What is a contingent liability?
- A contingent liability is a potential obligation that may or may not become a full liability depending on the outcome of a future event.
Financial Analysis and Reporting
- What is the difference between a balance sheet and an income statement?
- The balance sheet shows a company’s financial position at a specific point in time (assets, liabilities, equity). The income statement shows financial performance over a period of time (revenues, expenses, profit).
- What is the purpose of the statement of cash flows?
- It reports the cash generated and used by a company over a period, categorized into operating, investing, and financing activities.
- How do you calculate retained earnings?
- Beginning Retained Earnings + Net Income – Dividends = Ending Retained Earnings.
- What is the matching principle?
- The matching principle states that expenses should be recognized in the same period as the revenues they helped to generate.
- How would you calculate Gross Profit?
- Gross Profit = Revenue – Cost of Goods Sold (COGS).
- What is the difference between revenue and gain?
- Revenue is from a company’s primary operations. A gain is from a non-operating, incidental event, such as selling an old piece of equipment.
- What is the difference between a cash flow statement and a cash account?
- The cash flow statement shows changes in cash over a period, while the cash account on the balance sheet shows the cash balance at a specific point in time.
- What is the purpose of an audit?
- An audit is an independent examination of financial records to ensure they are accurate and comply with accounting standards.
- What is the concept of materiality?
- Materiality refers to the importance of a transaction or item. An error is material if its omission or misstatement could influence the decisions of financial statement users.
- What is the going concern assumption?
- The going concern assumption assumes a company will continue to operate indefinitely, rather than liquidating in the foreseeable future.
Professional and Personal
- Why do you want to work as a Junior Accountant?
- “I enjoy working with numbers, value accuracy, and want to build a strong foundation for a long-term career in finance.”
- How do you stay up-to-date with accounting standards and regulations?
- I follow industry news from sources like the AICPA, review updates from FASB, and participate in online forums or professional development courses.
- Describe a time you had to deal with a difficult client or colleague.
- (Provide a specific example of a time you used communication and problem-solving skills to resolve a conflict professionally.)
- What are your long-term career goals?
- (Align your goals with the company’s growth opportunities. Examples: becoming a Certified Public Accountant (CPA), moving into a senior accountant role, or specializing in a particular area like forensic accounting.)
- How do you handle confidential information?
- I understand the importance of discretion and would only share sensitive information with authorized personnel, following company protocol for data security.
- Tell me about a time you used your accounting skills to solve a problem.
- (Provide a specific example of identifying an error, improving a process, or using data to support a business decision.)
- What is a key quality a successful junior accountant must possess?
- Accuracy and attention to detail are crucial, as a small error can have a significant impact on financial statements.
- How do you handle tight deadlines?
- I prioritize tasks, break down large projects into smaller steps, and communicate progress and potential delays proactively to my manager.
- What’s your biggest weakness?
- (Choose a genuine weakness, but frame it as something you are actively working to improve. Example: “I sometimes get too focused on a single detail, but I’m learning to balance that with a broader view of the overall task.”)
- Why should we hire you?
- (Summarize your key strengths and how they align with the job description. Highlight your enthusiasm for learning and your strong foundational knowledge.)
- How would you describe your communication style?
- I strive for clear and concise communication, whether it’s explaining a complex financial concept to a non-accountant or providing a detailed report to a supervisor.
- What motivates you in a professional setting?
- I am motivated by a challenging work environment that allows me to learn new skills and contribute to a team’s success.
- How do you handle stress and pressure?
- I manage stress by staying organized, taking short breaks, and focusing on one task at a time. I see pressure as an opportunity to perform at my best.
- Describe a time you received constructive feedback.
- (Provide an example of how you took feedback and used it to improve your performance or skills.)
- Do you have any questions for us?
- (Always have a few questions prepared to show your interest. Examples: “What are the team’s biggest challenges right now?” “What opportunities are there for professional development?” “Can you describe a typical day in this role?”)