Executive Accounts Question:
Download Questions PDF

What are the various systems of Accounting?

Executive Account Interview Question
Executive Account Interview Question

Answer:

There are two systems of Accounting:

1) Cash System of Accounting: This system records only cash receipts and payments. This system assumes that there are no credit transactions. In this system of accounting, expenses are considered only when they are paid and incomes are considered when they are actually received. This system is used by the organizations which are established for non profit purpose. But this system is considered to be defective in nature as it does not show the actual profits earned and the current state of affairs of the organization.

2) Mercantile or Accrual System of Accounting: In this system, expenses and incomes are considered during that period to which they pertain. This system of accounting is considered to be ideal but it may result into unrealized profits which might reflect in the books of the accounts on which the organization have to pay taxes too. All the company forms of organization are legally required to follow Mercantile or Accrual System of Accounting.

Download Executive Account Interview Questions And Answers PDF

Previous QuestionNext Question
Explain where do you see yourself in five years?Name the accounting applications that you're comfortable with?