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