Balance sheet interview questions and answers (2024)

FAQs

How to answer what is a balance sheet in an interview? ›

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.It shows the company's assets, liabilities, and shareholders' equity. Ass... financial statement that contains details of a company's assets or liabilities at a specific point in time.

The balance sheet can help users answer questions such as whether the company has a positive net worth, whether it has enough cash and short-term assets to cover its obligations, and whether the company is highly indebted relative to its peers.

The three golden rules of accounting are (1) debit all expenses and losses, credit all incomes and gains, (2) debit the receiver, credit the giver, and (3) debit what comes in, credit what goes out. Debit what comes in - credit what goes out.

Try to answer questions about yourself without giving too much, or too little, personal information. You can start by sharing some of your personal interests and experiences that don't relate directly to work, such as a favorite hobby or a brief account of where you grew up, your education, and what motivates you.

The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.

The balance sheet provides information on a company's resources (assets) and its sources of capital (equity and liabilities/debt). This information helps an analyst assess a company's ability to pay for its near-term operating needs, meet future debt obligations, and make distributions to owners.

Many experts believe that the most important areas on a balance sheet are cash, accounts receivable, short-term investments, property, plant, equipment, and other major liabilities.

What are the Golden Rules of Accounting? 1) Debit what comes in - credit what goes out. 2) Credit the giver and Debit the Receiver. 3) Credit all income and debit all expenses.

The debt-to-equity (D/E) ratio is used to evaluate a company's financial leverage and is calculated by dividing a company's total liabilities by its shareholder equity. The D/E ratio is an important metric in corporate finance.

What is the difference between a trial balance and a balance sheet? ›

A trial balance is usually prepared as the first step towards preparing the balance sheet of the company. A trial balance summarises the closing balance of the different general ledgers of the company, while a balance sheet summarises the total liabilities, assets, and shareholder's equity in the company.

The STAR method is a structured manner of responding to a behavioral-based interview question by discussing the specific situation, task, action, and result of the situation you are describing.

Balance sheet formula & equation

The balance sheet equation follows the accounting equation, where assets are on one side, liabilities and shareholder's equity are on the other side, and both sides balance out.

The balance sheet can be presented in two formats: the account format or the report format. The account format shows the assets on the left side and the liabilities and equity on the right side, while the report format shows the assets on the top and the liabilities and equity on the bottom.

What is balance sheet answer in one sentence? A balance sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.