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TOP FINANCE INTERVIEW QUESTIONS !   Most common accounting interview questions you should expect to see during the recruiting process. 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? A: Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees’ work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.   Q. Walk me through a cash flow statement. A. Start with net income, and go line by line through major adjustments (depreciation, changes in working capital, and deferred taxes) to arrive at cash flows from operating activities. Mention capital …