Accounting Essentials
FREEFinancial statements, 3-statement linkages, working capital, and accrual accounting. The foundation for every finance interview.
100% Free — All Questions Unlocked
No account required. No limits. Start practicing right away.
Modules
Financial Statements 101 (IS, BS, CF)
40 questions
Core purpose and structure of the income statement, balance sheet, and cash flow statement; key line items (revenue, COGS, opex, EBITDA, D&A, interest, taxes; cash, AR/AP, inventory, PP&E, debt, equity); basic sign conventions; what each statement is telling you and which metrics interviewers focus on.
Statement Linkages & Flow of Cash
40 questions
How the 3 statements connect mechanically: net income to retained earnings, non-cash add-backs, working capital changes, capex flows to PP&E, debt balances to interest; how cash is the plug; how operating, investing, and financing cash flows reconcile; typical interview walk-throughs of linkages.
Revenue, Expenses & Accrual Accounting
40 questions
Accrual vs cash accounting intuition; timing differences and why they matter; common accrual concepts used in interviews (deferred revenue, accrued expenses, prepaid expenses); earnings quality and what drives real profitability vs accounting profit; basic recognition logic without deep GAAP rules.
Working Capital & Cash Conversion
40 questions
Working capital components (AR, inventory, AP, accrued liabilities) and how changes impact cash flow; cash conversion cycle intuition; seasonality and growth effects; how WC affects valuation and leverage; common interview scenarios (e.g., AR increases, what happens?) and quick, clean answers.
Depreciation, CapEx & Non-Cash Items
40 questions
Depreciation/amortization mechanics and why they are non-cash; capex vs expense; PP&E roll-forward intuition; intangible amortization; impairment basics; stock-based comp and other non-cash adjustments; how these flow through IS/BS/CF and the typical what happens if interview questions.
Frequently Asked Questions
What are the most important accounting concepts for finance interviews?
Finance interviews test three statement linkages (income statement, balance sheet, cash flow statement), depreciation and amortization, deferred taxes, working capital mechanics, and how transactions flow through all three statements. The most classic question is 'walk me through the three financial statements and how they link together.'
How do the three financial statements link together?
Net income from the income statement flows into retained earnings on the balance sheet and is the starting point of the cash flow statement. Depreciation is added back in operating activities. Capital expenditures reduce cash and increase PP&E on the balance sheet. Changes in working capital items (AR, inventory, AP) also appear in operating cash flows.
What accounting questions should I study for investment banking interviews?
Focus on: three statement links, depreciation impact across statements, how a $10 deferred tax liability flows through, goodwill and intangible assets, working capital cycles, EBITDA vs EBIT vs net income distinctions, and revenue recognition under IFRS/GAAP. These are the most common IB technical accounting questions.
Is Accounting Essentials free on Finance Interview Prep?
Yes — the Accounting Essentials track is completely free with no signup required. You get access to all modules covering financial statement analysis, accounting mechanics, and real interview questions with instant feedback.