DOMAIN INTERVIEW QUESTIONS
ACCOUNTING AND FINANCIAL MANAGEMENT
1. Golden rules of accounting and types of accounts
2. 3 important financial statements and what do they report – which one is the most important
3. What is depreciation and types of depreciation. Formula for SLM method.
4. Difference between assets and liabilities
5. Types of current assets and current liabilities
6. Explain these terms – deferred revenue, unearned revenue, deferred tax asset and liabilities,
goodwill, amortization, impairment, contingent liabilities, accrued income, accrued expenses
7. What is working capital and why is it important for the business – formula to calculate
8. Cash conversion cycle – formula and significance
9. Types of Ratios and their significance – Profitability, Liquidity, Solvency, Activity, Valuation (know
all the ratios that come under these categories)
10. Which accounts have debit balances and which have credit balances
11. What is bank reconciliation statement and why is it prepared
12. Journal entry – salary paid, rent outstanding, inventory purchased, depreciation, credit sales,
credit purchases, sales return, purchase return, taxes paid, interest paid, advance salary paid,
drawings, loan taken from the bank, collection of receivables
13. What is net worth and how is it different from book value
14. Sections of cash flow statement and where are these items reported – interest paid, interest
received, dividends paid, cash purchases, asset sold, loan taken, equity raised, tax paid
15. Lifo vs Fifo vs weighted average
16. Which is better – issuing debt or equity
17. NPV vs IRR and Payback period vs Discounted Payback Period, CAGR
18. Cost of Capital (WACC)
19. Methods to determine cost of equity and cost of debt
20. Operating vs Financing Lease
21. Basic vs diluted EPS
22. What is leverage – financial and operating leverage
23. What is Beta, systematic risk, unsystematic risk
24. Debit note vs credit note
25. What are some off balance sheet items
FINANCIAL MARKETS AND INSTRUMENTS
1. Difference between equity, bonds and preference shares
2. Corporate actions – dividend, bonus, split, spin off, rights issue, buy back, etc.
3. What is RHP, book building, underwritten offering, private placements, roadshows, IPO, FPO
4. What is YTM and what is its relationship with price
5. Spin off vs split off
6. Different types of bonds, preference shares, equity shares
7. Significance of PE ratio
8. Explain the features of these derivative contracts – futures, options, forwards, types of swaps
9. Margin requirements and Mark to Market
10. Open interest vs volume, Roll over
11. Inputs of Black Scholes Model
12. Option Greeks and some strategies
13. Contango and backwardation
14. Hedge fund vs Mutual Fund vs PE funds - Hurdle rate, performance and incentive fees, LP, GP
15. Capital vs money market, primary vs secondary markets
16. Commercial paper, certificate of deposits, repo, treasury bills
17. Open vs closed ended mutual funds, ETF, Fund of Funds
18. How is NAV determined
19. Sharpe ratio, treynor ratio, sortino ratio, standard deviation, correlation, variance, covariance
20. MBS and ABS, SPE/SPV
21. Financial market participants – depository, custodian, DP, dealer, prime broker, RTA, IPA
22. ADR and GDR
23. Duration and convexity in bonds
24. Clean price, dirty price
25. REITs
26. Growth vs value stocks
27. SOFR, LIBOR
28. Role of investment bank
29. Important documents of a Mutual Fund Scheme
30. How investment returns are taxed in India