Ans. [Note: Social reasons are important too, but you have to be careful about mentioning them, depending on who you’re interviewing with. Part IV) ValuationValuation MethodsWhen valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent is essentially constant – except for the cash taxes impact/timing impact on the net present value (NPV)Net Present Value (NPV)Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the entire life of an investment discounted to the present. The correct answer is “a credit balance” (option 1). Part IV) What is the impact on the company’s valuationValuation MethodsWhen valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent? What is the main objective of financial accounting? Use a structured approach to answering each question. Learn. A company should always optimize its capital structureCapital StructureCapital structure refers to the amount of debt and/or equity employed by a firm to fund its operations and finance its assets. Which one of the following is not a nominal account? On the balance sheet, the asset account of inventory is reduced by the amount of the write-down, and so is shareholders’ equity.Stockholders EquityStockholders Equity (also known as Shareholders Equity) is an account on a company's balance sheet that consists of share capital plus The income statement is hit with an expense in either cost of goods sold (COGS) or a separate line item for the amount of the write-down, reducing net income. It is not automatically better to use debt financing simply because it’s cheaper. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non-operating activities.This statement is one of three statements used in both corporate finance (including financial modeling) and accounting. Spell.
Thanks for the mcqs and i would like you to add more from different topics, very good Q, it shows u the knowledge of ur accounting, Copyright 2012 - 2020. Please note, do not limit your scope of reading to the questions and answers provided in this post rather expand your studies and search for more Financial Accounting examination past questions and answers and answer them. PLAY. While it is arrived at through the income statement, the net profit is also used in both the balance sheet and the cash flow statement. Take a couple of seconds to plan your answer and repeat the question back to the interviewer out loud (you buy some time by repeating part of the question back at the start of your answer). Behavioral interview questions and answers. The rate of return required is based on the level of risk associated with the investment, EBITDA or Earnings Before Interest, Tax, Depreciation, Amortization is a company's profits before any of these net deductions are made.
Who is known as the father of accounting? Depreciation expense is used to reduce the value of plant, property, and equipment to match its use, and wear and tear, over time.
In the answer to this interview question, it’s important to consider the company’s normal working capital cycleWorking Capital CycleThe Working Capital Cycle for a business is the length of time it takes to convert the total net working capital (current assets less current liabilities) into cash. These include: ego, empire building, and to justify higher executive compensation.]. b) Allocate your examination time carefully. If the firm has immediately steady cash flows and is able to make the required interest paymentsInterest ExpenseInterest expense arises out of a company that finances through debt or capital leases. There appears to be a distinct improvement on the last exam series with most students achieving either a Level 2 or 3 pass. principles. For anyone with an interview for an analyst position in the credit department of a bank, this is a guide to ace it! Which of the following journal entries can be used to correct the error? When answering these questions, there is always the temptation to look at the answers before answering the questions, This is a wrong strategy because your mind would be limited to calculate and force your answer towards the exact answer of the question hence making you limit your scope of thinking. ANS: B, 14) Bola, UTC’s regular customer, owned N1000 on account of a radio bought. The correct answer is “credited” (option 2). Part III) Cash flowCash FlowCash Flow (CF) is the increase or decrease in the amount of money a business, institution, or individual has. Learn more about accretion/dilution in M&AAccretion DilutionAccretion Dilution Analysis is a simple test used to determine whether a proposed merger or acquisition will increase or decrease post-transaction EPS. They show how well a company utilizes its assets to produce profit, In finance, leverage is a strategy that companies use to increase assets, cash flows, and returns, though it can also magnify losses. LW Specimen Exam Paper (ENG & GLO) This has been CFI’s guide to finance interview questions and answers.
Operating leverage can.
The balance sheet is one of the three fundamental financial statements. Good models also include error checks to ensure the model is working correctly (e.g., the balance sheet balances, the cash flow calculations are correct, etc.). ANS: D, 19) Return inwards is also known as____ (a) purchases returns (b) sales returns (c) goods on sale of return (d) goods in transit ANS: B, 20) The account which refers to the tangible assets of a company that is of permanent nature is the (a) personal account (b) real account (c) nominal account (d) cash account ANS: B, 21) The document that is used to acknowledge the acceptance of the return of goods by the seller from the buyer is known as (a) credit note (b) debit note (c) invoice (d) voucher ANS: A, 22) The effect of payment of a liability is that it (a) increases both assets and liabilities (b) increases assets and decrease liabilities (c) decreases assets and increases liabilities (d) decreases both assets and liabilities ANS: D, 23) The term posting in accounting refers to (a) recording entries in the journal (b) transferring the balances in the ledger to the trial balance (c) tracing amounts from the journal to the ledger to find errors (d) transferring entries to the ledger from the journal. All answers here are correct, you can as well make references to your Financial Accounting text books should you have doubts as regards any of the answers. Your answer is incorrect. Accounts payable is a liability incurred when an organization receives goods or services from its suppliers on credit. The correct answer is “Fra Luca Pacioli” (option 2). A good answer to the question may highlight the tradeoffs if there is any followup required. EBITDA focuses on the operating decisions of a business because it looks at the business’ profitability from core operations before the impact of capital structure. Accumulated depreciation account and allowance for doubtful accounts account are two examples of contra asset account. Check out CFI's interview guides with the most common questions and best answers for any corporate finance job position. IT IS LIKE A REVESION FOR WHAT WE HAVE LEARNT. Leadership refers to the ability of an individual or an organization to guide individuals, teams, or organizations toward the fulfillment of goals and objectives. Which one of the following is an internal transaction? It is a measure of a company’s liquidity and its ability to meet short-term obligations as well as fund operations of the business. Oh! ROE combines the income statement and the balance sheet as the net income or profit is compared to the shareholders’ equity. A financial modeling dashboard is a great way to visually display the results of a financial model. Accounts Receivable (AR) represents the credit sales of a business, which are not yet fully paid by its customers, a current asset on the balance sheet. ), and (IV) dispositions. Financial Accounting is one of the most interesting subjects for students in senior secondary schools that understands the principle. PP&E (Property, Plant, and Equipment) is one of the core non-current assets found on the balance sheet. This guide covers questions on the income statement, balance sheet, cash flow statement, budgeting, forecasting, and accounting principles, Credit analyst interview questions and answers. This guide, Ace your next interview! Please note, do not limit your scope of reading to the questions and answers provided in this post rather expand your studies and search for more Financial Accounting examination past questions and answers and answer them. There are essentially four areas to consider when accounting for Property, Plant & EquipmentPP&E (Property, Plant and Equipment)PP&E (Property, Plant, and Equipment) is one of the core non-current assets found on the balance sheet. Debit the receiver, credit the giver is rule for. This download link will take you to the full document containing close to 100 Financial Accounting past questions and answers. Being prepared for these types of questions is critical and the best strategy is to pick 5-7 examples of specific situations from your resume that you can use as examples of leadership, teamwork, a weaknessPublic Speaking WeaknessThe "public speaking weakness" answer is a great way to get around the question, "what is your biggest weakness?". The format of account that tells the balance after each entry is known as: Your answer is incorrect. the balance sheet because assets are the true driver of cash flow; or the income statement because it shows the earning power and profitability of a company on a smoothed out accrualAccrual AccountingIn financial accounting or accrual accounting, accruals refer to the recording of revenues that a company may earn, but has yet to receive, or the expenses basis). Your answer is incorrect. Step back and give a high-level overview of the company’s current financial position, or the position of companies in that industry in general. 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