Finance interview questions to prepare for
With the start of a new academic year, we know that finance interviews are again at the forefront of many of your minds. Over the next few months, we’ll be publishing most frequently asked technical finance interview questions and answers across a variety of topics – accounting (in this issue), valuation, corporate finance – to get you prepared. If you’re looking for interview prep resources beyond this article, be sure to take a look at our Interview Prep training package.
Table of Contents
- Finance interview best practices
- Finance interview questions: accounting
- Q: Why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?
- Q: Walk me through a cash flow statement.
- Q: What is working capital?
- Q: Is it possible for a company to show positive cash flows but be in grave trouble?
- Q: How is it possible for a company to show positive net income but go bankrupt?
- Q: I buy a piece of equipment, walk me through the impact on the 3 financial statements.
- Q: Why are increases in accounts receivable a cash reduction on the cash flow statement?
- Q: How is the income statement linked to the balance sheet?
- Q: What is goodwill?
- Q: What is a deferred tax liability and why might one be created?
- Q: What is a deferred tax asset and why might one be created?
Finance interview best practices
Before we get to accounting questions, here are some interview best practices to keep in mind when getting ready for the big day.
Be prepared for finance technical interview questions.
Many students erroneously believe that if they are not finance/business majors, then technical questions do not apply to them. On the contrary, interviewers want to be assured that students going into the field are committed to the work they’ll be doing for the next few years, especially as many finance firms will devote considerable resources to mentor and develop their new employees.
One recruiter we’ve spoken to said “while we do not expect liberal arts majors to have a deep mastery of highly technical concepts, we do expect them to understand the basic accounting and finance concepts as they relate to investment banking. Someone who can’t answer basic questions like ‘walk me through a DCF’ has not sufficiently prepared for the interview, in my opinion”.
Another added, “Once a knowledge gap is identified, it’s typically very difficult to reverse the direction of the interview.”
It’s ok to say “I don’t know” a few times during the interview. If interviewers think that you’re making up answers, they’ll continue probing you further.
Keep each of your answers limited to 2 minutes.
Longer answers may lose an interviewer, while giving them additional ammunition to go after you with more complicated question on the same topic.
It’s ok to say “I don’t know” a few times during the interview. If interviewers think that you’re making up answers, they’ll continue probing you further, which will lead to more creative answers, which will lead to more complicated questions and a slow realization by you that interviewer knows that you don’t really know. This will be followed by uncomfortable silence. And no job offer.
Dear sir, I am pursuing my MBA in finance and currently in second year and the placements are on the doorstep. I request you to keep publishing these kind of articles along with I think, if you will write on how to answer the questions related to the resume, which… Read more »
I have completed my MBA in HR and FINANCE .I don’t know the whats types of questions asked in the finance interview.
Please tell me sir.
Q: I have a question of how to calculate net debt when there are derivatives used. Here is the information published by the company on it’s balance sheet: Short term borrowing 1,200 Long term borrowing 6,700 Cash and marketable securities 800 But then in a different part of the report… Read more »
these questions are very helpful for the interview. Thank you so much….
sir,at first take my salam. Sir i can’t answer properly in viva question about finance.Although finance was major in my BBA programmer.what kind of question comes from basic finance. sir please suggest me,,which question can i follow, have you any fdf file “the basic question about finance in viva ”… Read more »
This was very helpful. Thank you very much.
Can you please provide me bunch of questions that usually ask at the time of interview.
Hello dear team I enjoyed this platform it help me to generate more exposure on various finance knowledge.
Thank you for providing such a nice interview questions and answer. It helped me a lot.
Thank you this is great work..keep on providing such stuff…more about financial statements and how to do them.
Thank you it must be useful
Hello Sir/Madam, My self Shaikh Qutuboddin, am an MBA grad in Finance also am working as finance and accounts executive in a Multinational Corporationsin Audit, Reconciliation, Revenue and Disbursement Statement preparation so am looking for a job in Financial Planning and Analyst, please advice me what should i prepare for… Read more »
Really it was very good but provide in pdf.
Really interesting article. Thanks!
Epic article and love the prompt answers given to questions asked.
Epic Article. Most interesting article read.
It’s really useful………. thanks
This is good and helpful
THANK YOU SIR
Can you explain this question in more detail :-
Q: Is it possible for a company to show positive cash flows but be in grave trouble?
Thank you so much for the article Sir! Really appreciate a lot. This made my confidence boosted as I was searching for Finance Questions to be asked by the interviewer. Really thanks once again Sir.
I’m having interview at tax worx and I don’t know what type of questions I will be asked and it’s been 2years since I did accounting and this will be my 1st internship after my N6 achievement in financial management.
thanks a lot
If you buy a Current Asset for $100 how does it flow through the three financial statements?
Is this the same answer as buying equipment?
in an pantnership firm the previous expenses paid in current year and it would in previous as payable. now the amount is paid then what will be the entries
plz give me a answer
Thank you!! 🙂
Please send some short tips for Basic Of Accounts Interview questions
Thank you so much. 🙂
Thank you. This helped me so much.
pls sir wats d link to join if i want to get basic accounting questions nd your update
thanks for your question and answers, it has help me improve my project issues about financial system assignment
Are you sure these are the most common questions?
Hello Sir I have a doubt in goodwill calculation, like goodwill it is reputation of company, then also we will treat it asset and keep in balance sheet with measuring in amount so how you calculate in amount.
can i get explanation.
Precise and informative points for job seekers.
Thanks, hope it’s useful for my interviews
Precise and clear answers.
Very Informative and well written.
“well explained answers in short way”
Thanx sir and my help in english speeking in job intarview
it’s really precise and understandable ans.
thank u sir