Technical accounting questions

"What is the difference between accruals and prepayments?" An accrual is an expense incurred but not yet invoiced or paid (electricity used in December, invoice arrives January — accrue in December). A prepayment is an expense paid in advance of the period it relates to (annual insurance paid January — spread over 12 months). Both match revenues and costs to the period they relate to, per the accruals basis of accounting. "Walk me through how you would reconcile the bank balance to the cash book." Obtain the bank statement closing balance. Add deposits in transit (in cash book, not yet cleared). Subtract outstanding cheques (issued, not yet presented). Adjust for bank charges or interest not yet in the cash book. Adjusted bank balance should equal cash book balance. Remaining differences require investigation.

Management accounting questions

"What is the difference between absorption costing and marginal costing?" Absorption costing assigns all manufacturing overhead (fixed and variable) to each unit — required for external reporting under GAAP/IFRS. Marginal costing assigns only variable costs to units; fixed overhead is a period cost, expensed in full. More useful for internal decisions. Profit difference between the two methods equals the change in stock level multiplied by the fixed overhead per unit. "How do you calculate and use a breakeven point?" Breakeven = Fixed costs / Contribution per unit. Contribution = Selling price minus variable cost. At breakeven, total contribution equals total fixed costs and profit is zero. Use for pricing decisions, capacity planning, and sensitivity analysis.

Behavioral questions for accountants

"Tell me about a time you found an error in financial data and what you did." How you spotted it (reconciliation, variance analysis), how you investigated (traced to source), what it was, how you resolved it. Did you escalate? Did you implement a control to prevent recurrence? "Describe a time you explained a complex financial issue to a non-finance stakeholder." Show you adapted your style — used visuals, avoided jargon, focused on business implication rather than accounting treatment. Finance business partnering requires this skill increasingly.

Excel and systems questions

Common interview questions: "What Excel functions do you use most?" — strong answer covers XLOOKUP, INDEX/MATCH, SUMIFS, COUNTIFS, IF/IFS, IFERROR, pivot tables, and Power Query for larger data sets. "What is the difference between a relative and absolute cell reference?" — relative (A1) changes when copied; absolute ($A$1) stays fixed; mixed ($A1 or A$1) fixes one dimension. For senior roles, Power BI, Tableau, or SQL proficiency is often assessed alongside Excel.

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Frequently asked questions

What qualifications do you need to become an accountant in the UK?
Most UK accountants qualify through ACA (ICAEW), ACCA, CIMA, or CIPFA. AAT is a common entry-level qualification before progressing to a chartered route. Each requires exams and typically three years of relevant work experience.
What is the difference between a financial accountant and a management accountant?
Financial accounting records historical transactions and produces external financial statements — P&L, balance sheet, cash flow for statutory and tax purposes. Management accounting focuses on internal analysis: budgets, forecasts, variance analysis, and decision support. Large organisations often have separate teams; many accountants work across both.