| Most people in the business world who do not | | | | agreed upon. |
| work in Accounting may have difficulty | | | | 5. If you are collecting on Accounts Receivable |
| interviewing Accountants and Bookkeepers. This is | | | | and you realize that there is no record of a |
| mainly due to the fact that their knowledge of | | | | customer's phone number around, how would you |
| the subject is limited. Furthermore, the subject of | | | | proceed to get in contact with the customer |
| Bookkeeping and Accounting alone can put some | | | | about the open receivable? |
| people asleep faster then some cold medicines. | | | | Answer: Again answers can vary on this question, |
| This article will help you get through some basics | | | | but the person should be able to track down a |
| of interviewing for these types of bookkeeping | | | | number by using the internet or calling an |
| positions. We will jump right into the meat and | | | | information directory for the listing with the |
| potatoes of the subject and assume you already | | | | address the product shipped to. With modern |
| know the other basics of interviewing candidates. | | | | day's ease of obtaining information the last thing |
| Bookkeeping and Accounting can cover a large | | | | you want is a person who just does not do |
| range of experience and skills. So to simplify | | | | anything. |
| these interview questions for bookkeepers, there | | | | What to ask the advanced bookkeeper in an |
| are two different interviewing groups we will | | | | interview. First let's define what an advanced |
| focus on. | | | | bookkeeper is. |
| The two groups are: | | | | B. Definition of an Advanced Bookkeeper: A |
| A. Standard Bookkeeper | | | | person who has a good understanding of paper |
| B. Advanced Bookkeeper | | | | and record flow in a business. This person should |
| What to ask the standard bookkeeper in an | | | | be able to easily understand Accounting processes |
| interview. First let's define what a standard | | | | and procedures in an organization. They usually |
| bookkeeper is. | | | | have at least some college experience or an |
| A. Definition of a Standard Bookkeeper: A person | | | | Associates / Bachelors degree in Accounting. |
| who has a general understanding of paper and | | | | However, years of experience doing bookkeeping |
| record flow in a business. For example this person | | | | could qualify for not having a degree. An |
| should understand customer invoicing and how | | | | advanced bookkeeper should also be able to |
| that relates to accounts receivable. They should | | | | understand more about financial statements, |
| also understand how the company purchases | | | | computer systems, and the general ledger then |
| from vendors and the importance of coding | | | | the standard bookkeeper. In some cases an |
| invoices into the accounts payable system. Lastly, | | | | advanced bookkeeper is capable of running all of |
| the Standard Bookkeeper should work under the | | | | the accounting functions of a company. |
| guidance of a more experienced Accountant | | | | Professional Bookkeepers can also be CPA's, |
| which could even be your outside CPA firm. | | | | Accounting Managers, Controllers, and CFO's. |
| Typically, the Standard Bookkeeper is not | | | | Five Interview questions for an Advanced |
| responsible for setting up your chart of accounts, | | | | Bookkeeper: (Please note: sometimes there could |
| preparing financial statements, or handling major | | | | be different answers to the same question. It |
| financial matters. This person should be viewed as | | | | helps if you understand what you are asking as |
| a processor of information. | | | | well. If a potential bookkeeper gives a different |
| Five Interview questions for a Standard | | | | answer then what you expected, just ask if they |
| Bookkeeper: ( Please note: sometimes there could | | | | could explain more.) |
| be different answers to the same question. It | | | | 1. What is the difference between a Profit and |
| helps if you understand what you are asking as | | | | Loss Statement and a Balance Sheet Statement? |
| well. If a potential bookkeeper gives a different | | | | Answer: A Profit and Loss Statement (or Income |
| answer then what you expected, just ask if they | | | | Statement) is used to measure how a company |
| could explain more.) | | | | performed financially over a set period of time, |
| 1. What is an Asset and what is a Liability? | | | | such as a month, quarter, or year. A Balance |
| Answer: An Asset is something of value to | | | | Sheet Statement reflects the companies overall |
| benefit a company. Some examples of an Asset | | | | financial health in terms of what the company has |
| would be Cash, Accounts Receivable, Inventory, | | | | in resources (assets) and what the company |
| and Fixed Assets. Liabilities are what are owed by | | | | owes (liabilities). |
| a business. Some examples of Liabilities would be | | | | 2. Under the accrual basis of accounting (which |
| Accounts Payable, Bank Loans, and Accrued | | | | most companies use) when are expenses |
| Accounts. | | | | recognized? |
| 2. What is a Journal Entry? | | | | Answer: Expenses are recognized when they |
| Answer: A journal entry records the accounting | | | | happen in accrual basis accounting. For example: |
| information for a business transaction. The entry | | | | When a purchase is made with net 30 day |
| is made in a journal and then usually posted to | | | | terms,that purchase/expense is recorded at the |
| the general ledger. | | | | time of obtaining the goods or service. |
| 3. In Accounts Receivable, how would you handle | | | | 3. What is Depreciation? |
| a customer who disputes they received a | | | | Answer: Depreciation is the process that spreads |
| shipment or service from the company and | | | | out the cost of an asset over its useful life as |
| therefore shows no amount is owed? | | | | determined by the IRS. So instead of all the cost |
| Answer: Of course answers could vary, but | | | | of the asset being expenses in one year it could |
| typically the bookkeeper should verify that the | | | | be spread out over several years. There are |
| shipment or service took place and provide | | | | several different types of depreciation used by |
| supporting backup to the customer that could | | | | companies but the most common is the straight |
| include a Bill of Lading showing the shipment was | | | | line method which simply divides the cost by the |
| delivered to the company, or a signed service | | | | useful years of the asset. |
| contract with the work performed in detail, and a | | | | 4. The General Ledger Chart of Accounts can be |
| copy of the invoices in question. | | | | summarized into five main account groupings. |
| 4. In Accounts Payable when the company makes | | | | What are these accounts? |
| a purchase and receives an invoice, what should | | | | Answer: *Income (Sales) *Expenses (Cost of |
| be verified before making the payment to the | | | | Sales) *Assets |
| vendor? | | | | *Liabilities *Owners Equity or Net Worth. |
| Answer: Generally, a company purchase order is | | | | 5. What does the inventory methods FIFO and |
| matched up against a receiving document or | | | | LIFO stand for? |
| packing slip and lastly verified against the invoice | | | | Answer: FIFO = First In First Out. LIFO = Last In |
| for the correct quantities and pricing received and | | | | First Out. |