本文发表在 rolia.net 枫下论坛Accounting questions:
1. Describe inter-co transaction flow. How do you do the reconciliation for inter-co?
Inter-co will have both receiving party and sending party. When one party has any entry, we will make sure the counterpart booked entry as well. Because of the transfer price, the accrual entry and actual billing will have the difference of the uplift. My understanding is if there is no actual billing when the transaction incurred, we will need to accrual and then reverse it when actual billed. In theory, accrual account will be 0 in balance at a certain time. When billing the accounting entry will be dr. expense (cost) dr. interco (uplift) and cr interco liablitity. When making payment, the entry will be dr. interco liability Cr. AP clearing. And then Dr. AP Clearing and Cr. Bank. So when I am doing interco recons, I know interco liability accounts and AP clearing accounts are supposed to be 0 in theory. If not, I will need to drill down to find variance. For sure, there are always variance for variety reason, which is the most interesting part since it draws me to find the story behind the numbers.
After I am taking over the inter-co recons, I also improved our business process by separating service from goods. By going this, I am able to focus on different possibilities.
2. What is your understanding of SOX.
In our company, we have a special tool to do accounts recons. We need to strictly follow every single procedure to make sure the subledger and ledger agree.
We have SOD Matrix analysis for every function and control point on every step in the process.
3. Are you familiar with ARD? What is it?
ARD is Asset Retirement and Disposal. To me, when retiring asset, the most important part is to check and see which account has been debit (cost or expense)
4. Are you familiar with HUB accounting?
I am not familiar with it. In the company I worked for the distribution center has been outsourcing. My understanding is Hub Accounting will be focusing on GR/IR account.
5. What is accrual? Why does the company need Accrual? Give an example and explain.
Based on matching principal, we need to book accrual entry to ensure the correct accounting. ( I gave an accrue bonus example.)
6. What is EBAIT? How will you get this figure? What is the relationship between EBAIT and net income? Where will you place "restructure" on the statement? Why?
Earning before amortization, interests and tax.
“Restructure” will be placed between EBAIT and net Income since it is not daily transaction.
7. What is COGS? How do you calculate it under inter-co situation?
COGS + transfer price
8. What are the difference between prepaid expense and accrual expense?
Prepaid expense is actually asset while accrual expense is expense incurred but hasn’t actually expensed yet. For example, we accrual bonus every month but we will pay employee at the end of year and it is based on company and individual performance. So the accrual entry may be different from the actual entry.更多精彩文章及讨论，请光临枫下论坛 rolia.net
1. Describe inter-co transaction flow. How do you do the reconciliation for inter-co?
Inter-co will have both receiving party and sending party. When one party has any entry, we will make sure the counterpart booked entry as well. Because of the transfer price, the accrual entry and actual billing will have the difference of the uplift. My understanding is if there is no actual billing when the transaction incurred, we will need to accrual and then reverse it when actual billed. In theory, accrual account will be 0 in balance at a certain time. When billing the accounting entry will be dr. expense (cost) dr. interco (uplift) and cr interco liablitity. When making payment, the entry will be dr. interco liability Cr. AP clearing. And then Dr. AP Clearing and Cr. Bank. So when I am doing interco recons, I know interco liability accounts and AP clearing accounts are supposed to be 0 in theory. If not, I will need to drill down to find variance. For sure, there are always variance for variety reason, which is the most interesting part since it draws me to find the story behind the numbers.
After I am taking over the inter-co recons, I also improved our business process by separating service from goods. By going this, I am able to focus on different possibilities.
2. What is your understanding of SOX.
In our company, we have a special tool to do accounts recons. We need to strictly follow every single procedure to make sure the subledger and ledger agree.
We have SOD Matrix analysis for every function and control point on every step in the process.
3. Are you familiar with ARD? What is it?
ARD is Asset Retirement and Disposal. To me, when retiring asset, the most important part is to check and see which account has been debit (cost or expense)
4. Are you familiar with HUB accounting?
I am not familiar with it. In the company I worked for the distribution center has been outsourcing. My understanding is Hub Accounting will be focusing on GR/IR account.
5. What is accrual? Why does the company need Accrual? Give an example and explain.
Based on matching principal, we need to book accrual entry to ensure the correct accounting. ( I gave an accrue bonus example.)
6. What is EBAIT? How will you get this figure? What is the relationship between EBAIT and net income? Where will you place "restructure" on the statement? Why?
Earning before amortization, interests and tax.
“Restructure” will be placed between EBAIT and net Income since it is not daily transaction.
7. What is COGS? How do you calculate it under inter-co situation?
COGS + transfer price
8. What are the difference between prepaid expense and accrual expense?
Prepaid expense is actually asset while accrual expense is expense incurred but hasn’t actually expensed yet. For example, we accrual bonus every month but we will pay employee at the end of year and it is based on company and individual performance. So the accrual entry may be different from the actual entry.更多精彩文章及讨论，请光临枫下论坛 rolia.net