Accounting Interview Questions

The cash flows statement shows cash flows from operating, investing and financing activities. In the operating activities area, for example, you would add back depreciation expense to net income (since no cash has actually left your firm). Investing activities could include money from sales of land, and financing could include receiving cash from a loan, or giving out dividends to shareholders.

Again this is a detailed answer, you will not need to provide all this detail- This question is just testing to see if you know how to do straight line depreciation- =($10,000-5,000)/5 =$1,000 depreciation expense per year Journal entry for each yr: Debit: Depreciation expense- $1,000 Credit: Accumulated Depreciation- $1,000

Excellent! Very helpful and detailed! thanks so much!

Warning: this is a very detailed answer- you will not be expected to provide this level of detail- you just need to know to recognize half in october and half in november October: Debit-Cash-$500 Debit- Accounts Recievable- $500 Credit-Revenue- $1,000 November: Debit-Cash:$500 Credit- Account Recievable- $500

I think $1000 should be recognised even before any cash is received based on the acrual concept of accounting. If u recognise income based on cash receipt then thats a cash basis which is not allowed under GAAP.

When you sell the product you debit A/R $1000 and credit Sales $1000 in October. When you receive payment in Octover you debit cash $500 and credit A/R $550, then when you collect $500 in Nov Debit Cash and Credit A/R $500 each.

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that could be a question on bond futures, which is the min. fluctuation of the bond future. that's why they asked.

I suppose it depends if they are paying with cash or on account. The likely position is on account, so assets increase by new fleet purchase price, liabilities increase by same amount. If cash is used, then -cash and +assets. This would have an affect on statement of cash flows - cash from investing activities. Since you cannot sell the old fleet ($0 salvage) and no depreciation is left, there is nothing you can do to write-off the old assets. No affect on financial statement regarding old fleet.

It would affect the financial statements in various ways. Liquidity ratios would change, potentially for the better even though the purchase is made with debt. If purchased with debt, leverage would increase. Then of course Times interest earned would change assuming revenue / CF match that of the old fleet. All else equal, ROE increases due to leverage. Etc. could go on forever.

Access, Summit,

accounting is the process of which is dedicatd that cost of sales and cost of revenue..