Accountant Interview: Gaining Essential Business Knowledge

Introduction

The interview involves interviewing an Accountant to gather relevant information that is vital information about businesses, taxes, licenses needed, and related business issues that the accountant is supposed to know. The interview is essential and will be conducted using face to face meetings. This method is vital as it allows for a better exchange of information between the speaker and the listener as they can see and interpret using body language and facial expressions (Ghooi, 2020). The data collected will be recorded so that it can be analyzed and presented for future changes in the future.

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Interview Questions

Legal structures

Various forms of business structure are also referred to as legal structures in business. These legal structures can be categorized into sole proprietorship, partnership, corporation, and limited liability companies (Garrett, 2020). The sole proprietorship is a legal business that is formed and owned by one person. The partnership can be said to be a business that is established by two or more people to carry out business together. While this is true, a corporation is a legal structure that is formed by shareholders that pull money to start a business. Lastly, a limited liability company (LLC) is a business structure that is devised by the state statute.

From these business structures, the business structure that I would recommend is the corporation. This is the best business structure that offers the protection that is said to be the strongest to its owners from personal liabilities.

Can this legal structure be change once it has established?

A corporation can be changed after it has been formed. It can be altered via two different forms. It can be adapted to become a limited liability company or disseminated. To change to LLC involves transferring all the assets from the corporation to an LLC after forming a new name of the corporation that will be the LLC. On the other hand, a corporation can be changed through dissemination. Some of the factors that can cause the corporation to be dissolved include partnership disagreements, mismanagement of the corporation, corporation being declared bankruptcy, and non -compliance with a mandate by the corporation.

Should be the business be formed in or out of state? Why?

The business is supposed to be formed within the state and not outside the state. It is essential to establish a company where its business activities will take place, and most of the time, they take place within the country. Forming of the business outside the country will only lead to additional costs. The corporation has to pay two sets of fees when it is to develop the entity of the state as compared to a case where it only has to pay one fee if the entity is formed within its home state. Within the two sets of fees that are evident when the business is forming outside its state, it is advisable to form the business within the state.

What are the tax implications of the legal structure recommended?

A corporation can be said to be a legal entity that is separated from its owners, and it is often tased separately. It can be said to be subjected to double taxation. This is because the shareholders are tasked with reporting their dividends on returns on their personal income tax. Also, the corporation is supped to pay income tax that comes from the profits that the company could have made in that year profoundly in that month. Usually, it is noted that the double taxation invites a disadvantage to the corporations, and it can make the business and its shareholders to pay more when the company has performed better in the market.

Will I Need an employer identification number (EIN)?

An employer identification number (EIN) is a significant number that uniquely identifies the business entity. Often it is a number that is used for identification by the Internal Revenue Services (IRS). It is used for reporting taxes that the business has used. The corporation will need an employer identification number that is usually referred to as the Tax Identification Number (TIN). The corporation is supposed to be identified in the state from other businesses so that the corporation is well known to be registered and operating in the country.

This number, EIN, is often a 9-digit number that is formatted in the form XX-XXXXXXX. It is essential for the IRS as it is used to identify the taxpayer that is supposed to file various business tax returns, and hence the corporation is supposed to acquire one.

Should I open a business bank account, or will my personal account be sufficient? Why?

A business corporation is supposed to have its business bank account, and one is not supposed to use his personal account. There are various reasons for separating the business account from the personal account. Firstly, in a corporation, there is a need for cleaner accounting. The shareholders need to understand how the business is going on, and the corporation has to calculate the balance in the organization at the end of the day. Secondly, during the time of taxation, the business will not be taxed more than what is supposed to be taxed. The company will be taxed only a few amounts of money that are witnessed as a result of profit in the organization.

Thirdly, it is professional for any business to have its account so that it all the transaction of the company are directed to the account, and those that are not for the company are not involved. The business has to carry out the various transaction in a day, and hence it has to have a clear record from that of person. Lastly, a business account allows an organization to link to different accounts such as credit accounts that are important and can save the business during a difficult time and when in need of money.

Do you recommend the use of accounting software? Why?

Yes, I will recommend the use of accounting software. They are often user-friendly, allowing users that do not have a background in accounting knowledge to be able to maintain books of account. Also, they are time savers and perform calculations quickly. Secondly, it allows the user to generate reports anytime that the corporation wants to view and understand various issues affecting how it is progressing (Brooks & Dunn, 2020). Thirdly, accounting software can be said that they are applied because they bring accuracy and speed in the organization. They can do an enormous amount of activities at the same time and provide results within a limited amount of time. Lastly, the corporation can depend on this software to improve its performance in the near future as it can show the trends in business.

Strengths and weaknesses of this business form?

This kind of business is said to have limited liability. It is easier to source the capital that is needed to start and run the company. It allows for the transfer of ownership from one shareholder to another shareholder through the selling of shares, and the profits and losses in the organization are shared among the stakeholders. However, it also has weaknesses such as it is taxed two times, and it has independent management. Some managers may not have an interest in the business, making it hard to manage this kind of business.

References

Brooks, L. J., & Dunn, P. (2020). Syllabus for ACCT 3380-001 Ethics for Accountants.

Garrett, A. A. (2020). History of the Society of Incorporated Accountants 1885-1957. Routledge. https://doi.org/10.4324/9781003082354

Ghooi, R. B. (2020). Ethics committee meetings–Online or face to face?. Perspectives in Clinical Research, 11(3), 121. http://www.pincronline.org/text.asp?2020/11/3/121/288959