Record to Report (R2R) Interview Questions & Detailed Answers
Q: What is Record to Report (R2R)?
A: Record to Report (R2R) is a key finance and accounting process that involves recording financial transactions,
reconciling accounts, reviewing balances, making adjustments, and ultimately generating financial statements. The goal
is to ensure accurate, timely, and insightful reporting that supports business decisions.
Q: Major Steps in the R2R Process
A: 1. Data Collection: Gathering all financial transactions.
2. Journal Entry Posting: Accurate entry in the accounting system.
3. Reconciliations: Matching balances (bank, intercompany, GL).
4. Adjustments: Accruals, prepayments, error corrections.
5. Trial Balance Review: Verifying accuracy before final reports.
6. Reporting: Generating P&L, Balance Sheet, Cash Flow statements.
Q: Importance of Reconciliations in R2R
A: Reconciliations serve as a health check for accounting records. They ensure balances match actual figures. For
example, in a bank reconciliation, the company's cash book is compared with the bank statement to identify any
unmatched transactions like outstanding cheques or direct charges.
Q: Month-End Close Activities
A: These are critical tasks at the end of each month to finalize the accounting period. Activities include posting all
invoices and accruals, running depreciation, finalizing intercompany settlements, and generating financial reports.
Typically completed by the 5th or 6th working day of the following month.
Q: What is an Accrual?
A: Accruals are expenses or revenues recorded before cash is paid or received, following the accrual accounting
principle. E.g., March salary paid in April is still recorded in March books.
Q: What is a Prepayment?
A: Prepayments are expenses paid in advance for future periods. For instance, yearly rent paid in January is recorded
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Record to Report (R2R) Interview Questions & Detailed Answers
as a prepaid expense and amortized monthly.
Q: Difference Between P&L and Balance Sheet
A: The P&L shows income and expenses over a period and reflects profitability. The Balance Sheet reflects the financial
position at a specific date, showing assets, liabilities, and equity.
Q: What are Fixed Assets and How Are They Recorded?
A: Fixed assets are long-term assets like buildings, machinery, etc. They are capitalized and not expensed immediately.
Their cost is allocated over their useful life via depreciation.
Q: What is Depreciation and Why is it Important?
A: Depreciation is the systematic allocation of an asset's cost over its useful life. It matches expense with the period the
asset generates revenue, ensuring accurate reporting.
Q: What is Intercompany Reconciliation?
A: It ensures matching of transactions between related entities within a group. For example, if Company A sells to
Company B, their receivables and payables must align before consolidation.
Q: Challenges During Month-End Close
A: Includes missing invoices, late entries, tight deadlines, system errors, or reliance on other teams. Solutions:
Checklists, planning, and strong communication.
Q: ERP Systems Experience
A: Familiar with SAP and Oracle for posting entries, performing reconciliations, and preparing reports. Open to learning
new systems as accounting principles remain the same.
Q: Ensuring Accuracy in Financial Reporting
A: Includes collecting correct data, performing reconciliations, reviewing trial balances, double-checking reports, and
using tools to detect errors.
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Record to Report (R2R) Interview Questions & Detailed Answers
Q: What is a Chart of Accounts?
A: A structured list of all accounts in a company's general ledger. Each account has a unique code, aiding in
categorization and data tracking.
Q: Common Reports in R2R
A: P&L, Balance Sheet, and Cash Flow. Others include segment reports, variance analysis, and management reports.
Q: Handling Reconciliation Discrepancies
A: Investigate root causes, make corrections, document resolutions, and communicate with relevant teams to avoid
repeat issues.
Q: What is Variance Analysis?
A: Comparison of actual results with budgeted/forecasted data. Helps identify performance gaps and guide managerial
decisions.
Q: Prioritizing Month-End Tasks
A: List tasks by due date and impact. Focus on reconciliations and adjustments early. Allocate time for contingencies.
Q: Role of Technology in R2R
A: ERP tools automate entries, reduce errors, allow real-time reporting, and enhance data accuracy and efficiency.
Q: Importance of Compliance in Financial Reporting
A: Ensures adherence to GAAP/IFRS, builds transparency, avoids legal issues, and maintains investor confidence.
Q: Improving the R2R Process
A: Automation, better reconciliation procedures, strong data management, team training, and cross-functional
collaboration.
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Record to Report (R2R) Interview Questions & Detailed Answers
Q: Managing Tight Deadlines
A: Break tasks into manageable steps, assign resources smartly, track progress, and communicate regularly with the
team.
Q: Key Qualities of a Good R2R Professional
A: Strong analytical skills, attention to detail, communication, accounting knowledge, and adaptability to tech and
regulations.
Q: Staying Updated with Accounting Standards
A: Attend workshops, webinars, read industry journals, and participate in online forums to stay current.
Q: Advice for R2R Interview Preparation
A: Understand R2R thoroughly, review key concepts, practice examples, and communicate confidently. Be eager to
learn.
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