Basic Accounting Interview Questions & Answers (with Explanations), Exercises of Business Accounting

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BASIC ACCOUNTING INTERVIEW QUESTIONS HARVARD BUSINESS SCHOOL What is the accounting equation? a. Assets + Liabilities = Owner's Equity b. Assets = Liabilities + Owner's Equity c. Owner's Equity = Assets - Liabilities d. Liabilities + Owner's Equity = Assets Correct answer: b. Assets = Liabilities + Owner's Equity Explanation: The accounting equation is a fundamental principle of accounting that states that a company's assets must equal the sum of its liabilities and owner's equity. This equation is used to maintain balance and ensure that a company's financial statements are accurate and consistent. What is accrual accounting? a. A method of accounting that records transactions when cash is received or paid b. A method of accounting that records transactions when goods are sold or purchased c. A method of accounting that records transactions when services are performed or received d. A method of accounting that records transactions when they occur, regardless of when cash is received or paid