Accounting and Finance Questions

Financial statements can be prepared from the Adjusted trial balance. A trial balance is a report containing list of all the general ledger accounts i.e, debits and credits contained in the ledger of a business. The types of trial balance include : Unadjusted trial balance, Adjusted trial balance and the Post- closing trial balance.

Payroll systems accurately maintain data related to payroll processing. Familiarity with formal payroll systems and computerized software ensure the candidate has experience with current payroll technology.

Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees’ work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.

SIP is Systematic Investment Plan.

The financial statements should be prepared in the following order:

Income statement - Statement of retained earnings - Balance sheet

1. Income statement reports revenues and expenses and calculates net income or net loss for the time period.

2. Statement of retained earnings show how retained earnings changed during the period due to net income or net loss and dividends.

3. Balance sheet reports assets, liabilities, and stockholders’ equity as of the last day of the period.

Actuary is the term which is not used in banking sector.

The three steps in the accounting process are

1. Identification,

2. Recording, and

3. Communication. 

Hence, analyzing and interpreting financial reports is not involved in the accounting process.

Reconciling the bank statement monthly is an example of independent internal verification