2 - Accounting Principles and Procedures - Updated Flashcards
This competency covers the basic principles of accounting and the interpretation of company accounts in order that reasoned advice can be given to clients
1
Q
Accounting Principles and Procedures - Extract from Candidate Guide - Aug 2018 (updated Feb 2022)
A
2
Q
What is a balance sheet ?
A
The term balance sheet refers to a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time, typically annually.
3
Q
Profit and loss account
A
The profit and loss statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period
4
Q
What is taxation ?
A
The amount of money or % that is owed to HMRC based on the company profit.
5
Q
What is revenue?
A
Income generated by the sales of the product or services.
6
Q
What is capital expenditure ?
A
Money spent by a business or organisation on acquiring or maintaining fixed assets such as land, buildings and equipment.
7
Q
What is auditing ?
A
Term used to describe the examination and verification of a company’s financial records.
Performed to ensure that financial statements are prepared in accordance with the relevant accounting standards.
Prepared internally using GAAP or IFRS and developed to provide useful information to stakeholders, creditors, customers, suppliers
8
Q
What is a ratio analysis ?
A
Method of gaining insight into a company’s liquidity, efficiency and profitability by studying its financial statements.
Common examples;
• Liquidity Ratios - Measure a company’s ability to pay off its short-term debts.
• Solvency Ratios - Compare a company’s debt levels with its assets, equity, and earnings.
• Profitability Ratios - These ratios convey how well a company can generate profits from its operations.
• Efficiency Ratios - Also called activity ratios, efficiency ratios evaluate how efficiently a company uses its assets to generate sales and maximize profits.
9
Q
What is credit control ?
A
System used by businesses and central banks to make sure that credit is given only to borrowers who are likely to be able to repay it.
10
Q
What is profitability ?
A
Measure of an organisation’s profit relative to its expenses.
11
Q
What is insolvency?
A
When a business can no longer meet your financial obligations, ie not enough money coming in to match money going out.
12
Q
What is VAT ?
A
The standard rate of VAT increased to 20% on 4 January 2011 (from 17.5%).
Some things are exempt from VAT, such as postage stamps, financial and property transactions.
The VAT rate businesses charge depends on their goods and services.
13
Q
What is a balance sheet?
A
A balance sheet is a document that shows what the financial status is of a company at any given point. It will show all assets, liabilities and shareholder equity details. Assets are used to generate wealth and generally something owned by the company such as properties, cash, plant, equipment etc. The asset will have a market value which can appreciate or depreciate. The liability is what is owned against the asset. The difference between the two is the equity of the company.
14
Q
Where might you find information on a company assets ?
A
On a balance sheet
15
Q
What is a balance sheet?
A
It is a snapshot of a companies financial status showing the assets, liabilities, shareholders equity at any given point.
16
Q
What is a balance sheet?
A
The term balance sheet refers to a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time.
17
Q
What is a balance sheet?
A
A Financial statement of the Company’s assets, liabilities and equity at a point in time.
18
Q
What does a balance sheet tell you?
A
It tells you how much the company owns (assets) and owes (liabilities).
19
Q
What is a cashflow statement?
A
The cash flow statement (CFS) measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. The cash flow statement complements the balance sheet and income statement.
20
Q
What is a cash flow statement?
A
An account of how much liquidity a company has. It will show how much cash comes and goes from a company. It is used to show short term viability of a company and its ability to pay off any liabilities. Three main components of cash flow are operations of the business, investment (changes in assets, equipment etc. - cash out) and financing (changes in debt, loans, dividends – cash in)
What is included in cash flow? Net cash flow, returns on investment, taxation, capital expenditure, equity payments, management of liquid resources, financing.
21
Q
What is a cashflow statement?
A
A financial statement that shows all the cash inflow a company receives from operations and external investment. It also shows cash outflow that pays for business activities during a given period.
22
Q
What is a profit and loss account?
A
A profit and loss account is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income or net profit.
23
Q
What is a statement of profit or loss?
A
A document which shows the amount of income generated against the expenses made during a specified period.
24
Q
What is a profit and loss statement ?
A
The profit and loss statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period.
25
What is a profit and loss statement?
This is an account of how much profit a loss has made over a period of time. It will show how much income is being generated by a company against any expenses which are subtracted.
What is included in a P&L statement? – turnover, profits, expenses, taxations, dividends.
26
What is the difference between a profit and loss sheet and a balance sheet ?
The Profit and Loss account is the statement of income and expenses which shows the net profit and loss for the particular period.
Balance sheet is the statement of assets, liabilities and capital which showing the actual financial position of an entity at a certain point in time.
27
What is the difference between a profit and loss statement and a balance sheet?
A profit and loss shows the income and expenditures of a company and resulting profit or loss.
The balance sheet shows what a company owns (assets) and what it owes ((liabilities) at any given point.
28
What is a profit and loss account?
A financial statement comparing the income (revenue) and outgoings (expenditure) with adjustments for any liabilities etc. to identify the profit or loss a company has made over a specific period.
29
What is included within a profit and loss account?
Income, expenditure, plus any adjustments for liabilities.
30
Are profit and loss accounts current?
No, they are retrospective.
31
What are management accounts?
Management accounts are prepared for internal use generally to record, plan and control a company’s activities and help with decision making processes such as purchasing new assets or employing staff etc.
32
What are company accounts?
Company accounts are legally required from all incorporated companies under the Companies Act 1989. They are prepared for external parties (HMRC, banks etc) to show the performance over a period and help prevent fraud, ensure that cashflow is managed, provide evidence for borrowing purposes etc.
33
What is Capital Expenditure?
Expenditures creating future benefits, it is incurred when a business spends money to buy fixed assets or to add to the value of an existing asset.
34
When should a company be registered for VAT ?
If the company a VAT taxable turnover to be greater than £85,000 in the last 12 months or in the proceeding 30 day period.
35
What is the threshold for being registered to VAT ?
£85,000
36
How much does VAT rise?
2.5% (17.5% increased to 20%)
37
Give me an example of different VAT rates ?
Standard rate=20%
Reduced rate=5%
Zero rate=0%
38
Can you give me some example of standard rate VAT items ?
The majority of things.
39
Can you give me some example of reduced rate VAT items ?
Renovating or altering an empty house or flat reduced rate
Supplying and installing certain mobility aids for elderly people reduced rate
Supplying and installing certain energy saving materials and equipment reduced rate
40
Can you give me some example of zero rate VAT items ?
Supplying or installing goods for a disabled person in their home zero
Making alterations to suit a disabled person zero
41
What is domestic reverse charge ?
The domestic reverse charge is a VAT procedure that was implemented in the UK on March 1st 2021 for construction services. Under the domestic reverse charge procedure, the buyer (contractor) accounts for the VAT rather than the supplier (subcontractor). this is try and account for missing VAT payments
42
Who does Domestic Reverse charge apply to ?
Main Contractors and Subcontractors.
43
When did the domestic reverse charge come into affect ?
1st March 2021.
44
What is VAT ?
Value Added Tax
45
What is the VAT reverse charge ?
The customer receiving the service will have to pay the VAT due to HMRC instead of paying the supplier if they are VAT registered and part of the Construction Industry Scheme (CIS) - see flowcharts for further info
46
What does EBITDA stand for ?
EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and its margins reflect a firm's short-term operational efficiency. EBITDA is useful when comparing companies with different capital investment, debt, and tax profiles.
47
Give me some examples of how you forecast your individual fee income.
* Consideration of pipeline
* Framework contracts
* Upcoming projects
* Scheduled appointments
48
What is accounting?
It is the process of keeping financial accounts of something.
49
What are company accounts?
Legal requirement submitted to HMRC. It is a record of the companies financial performance
50
What are management accounts?
These are produced for internal usage for particular requirements such as calculating acquisitions. It can be in any format for the purposes of what it is needed for.
51
How do you deliver healthy cashflow?
* Ensure cash coming in is greater than that going out
* Working within my competence
* Financial forecasting
* Good client care
52
What does a Dun and Bradstreet report show?
It compiles business information to measure the creditworthiness of a company. They are the business equivalent of a credit report check. It will colour code the companies financial status from green, red or orange/yellow to show their risk.
53
What are the limitations of a Dun and Bradstreet Report?
It is limited only to the latest submitted documents on companies house.
54
Why do companies keep accounts?
For regulatory purposes, to keep track/record of outgoings and in goings and compare performances and to plan future growth.
55
How are fee proposals prepared?
A fee proposal is prepared using an estimate of the time required to carry out a job multiplied by the cost of your hire on an hourly rate. A percentage will then be added for company overheads.
56
What is goodwill?
An intangible asset that arises when a buyer acquires an existing business. It represents assets that are not separately identifiable.
57
What is bankruptcy?
The legal process where people or companies who cannot repay debts may seek relief from the government of their debt. It is court ordered. It stays on your financial record for up to 10 years
58
What is receivership?
The process in which a ‘receiver’ is appointed by a creditor to liquidate company assets to allow creditors to recoup their money.
59
What is retention and why do we keep this?
Retention is the withholding of a percentage of a contract sum to ensure the contractor properly completes the activities required within the rectification period.
60
What is solvency?
The possession of assets in excess of liabilities; ability to pay one's debts.
61
What is meant by the terms Gross and Net?
In salary terms, Gross is the total salary and net is salary minus tax and all other deductions.
62
What is meant by depreciation in relation to an asset?
Depreciation is the systematic reduction in the recorded cost of a fixed asset. Examples of fixed assets that can be depreciated are furniture and IT equipment.
63
What is a Dun and Bradstreet Report ?
The Dun and Bradstreet report is one of the most popular credit reports for businesses. Dun and Bradstreet (D&B) is a credit reporting agency that collects public and private information to produce a comprehensive credit profile. D&B also provides business credit scores called PAYDEX® scores that range from 1 to 100
64
What are the main types of ratio analysis used to assess a company's financial strength?
Liquidity the ability of the company to pay its way (solvency). More companies fail due to cash flow than any other reason.
Current Ratio = Liquid assets / Liabilities Investment/shareholders information to enable decisions to be made on the extent of the risk and the earning potential of a business investment.
Return on Investment (ROI) = (Gain Cost) / Cost€¢ Gearing information on the relationship between the exposure of the business to loans as opposed to share capital.
Net Gearing = Net Debt / Equity Profitability how effective the company is at generating profits given sales and/or its capital assets.
Gross Margin = Gross profit / Net Sales Financial the rate at which the company sells its stock and the efficiency with which it uses its assets.
Asset Turnover = Net Sales / Total Assets
65
Why do chartered surveyors in your pathway need to understand and be able to interpret company accounts?
* For assessing the financial strength of contractors and those tendering for contracts
* For assessing competition
* To assist with business operations
* When setting up a new firm
66
What is insider trading?
The trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to non-public information about the company.
67
What is the Construction Industry Scheme (CIS)?
The Construction Industry Scheme (CIS) is a scheme created by HM Revenue & Customs (HMRC) for tax from contractors and subcontractors. The scheme is designed to minimize tax evasion within the construction industry. Contractors deduct tax from payments to subcontractors. All contractors and subcontractors must register with the scheme before work starts.
68
What happens if a company's liabilities are greater than its assets?
There is a likelihood the company will go into administration.
69
What does the term liabilities mean to you?
Any outstanding costs which are yet to be paid.
70
What does the term assets mean to you?
Anything that can be deemed to have a value attached to it.
71
What is corporation tax?
Tax levied on company profits.
72
What is Revenue Expenditure?
The cost of maintaining an existing assets, the cost of which are placed wholly on the profit and loss account for that period.
73
What is Capital Expenditure?
The cost of purchasing or upgrading an existing asset, the cost of which are spread over the useful life of the asset, and shown on the balance sheet.
74
What is Cash Flow?
The incomings and outgoings of cash within a business.
75
What procedures can you implement to improve Cash Flow?
* Negotiate shorter payment terms with clients
| * Negotiate longer payment terms with suppliers and sub-contractors.
76
Where can you find information on a company's financial status?
* Companies House for filed accounts
| * Credit checks.
77
What are some types of financial ratio analysis?
* Current Ratio Analysis
| * Debt Ratio Analysis
78
What is Current Ratio Analysis?
An examination of a companies liquidity, comparing company assets against company liabilities.
79
What is Debt Ratio Analysis?
An examination of a company€™s debs, comparing company assets against company debts.
80
What is Insolvency?
Where a company is unable to pay its way.
81
What are the signs of insolvency?
* Overvaluing Interim Valuations
* Front Loading
* Dissatisfied workforce
* Asking for upfront payment
* Contractual Approach
82
Who is employed when a company becomes insolvent?
* Administrator, who will try to keep the company going
| * Liquidator, who will wind up the company and sell the assets
83
What options are available to a company that has gone insolvent?
* Administration.- Company Voluntary Agreement
| * Compulsory Liquidations
84
What is Administration?
A method of holding a business together, whilst plans are formed to either restructure the business of sell assets.
85
What is the difference between management and financial accounts?
* Management accounts are internal
| * Financial accounts are required by law, and must follow a pre-determined format
86
What financial checks may you undertake on a company before entering into a contract with them?
* Check their published accounts on companies house
* Check their credit ratings
* Ask for their order book
* Check references from previous clients
87
What do companies need to provide every year in accordance with the Companies Act 2006?
The Act requires directors to ensure to prepare and file the annual accounts and it gives a true and fair view.
88
What do companies need to provide every year to comply with the Companies Act 2006?
Accounts for the company at the end of each financial year
89
What Is GAAP ?
Generally Accepted Accounting Principles - UK GAAP, is the overall body of regulation establishing how company accounts must be prepared in the United Kingdom. Company accounts must also be prepared in accordance with applicable company law (for UK companies, the Companies Act 2006
90
What is the limitations act ?
The Limitation Act 1980 sets out the rules on how long someone has to take action through the courts against another party. If the limitation period has expired then a claim is statute-barred and the person who wants to make the claim may be prevented from doing so.
91
Is there any RICS document relating to cash flow ?
RICS guidance note - 2012 - Cash flow forecasting - First edition
92
Can you expand on the contents of this (RICS guidance note - 2012 - Cash flow forecasting - First edition) ?
This guidance notes summarises what cash flow forecasting is, how to produce a useful forecast and how to then use the forecast to assess progress on site as well as other issues, and to assist both employers and contractors to analyse actual expenditure against forecast expenditure.
93
Name three accounting statements ?
The balance sheet, income statement, and cash flow statement each offer unique details with information that is all interconnected. Together the three statements give a comprehensive portrayal of the company’s operating activities.
94
What is WIP?
Work in progress (WIP) refers to partially-completed goods that are still in the production process. These items may currently be undergoing transformation in the production process, or they may be waiting in queue in front of a production workstation. Work in progress items do not include raw materials or finished goods.
95
What is Amortization ?
The action or process of gradually writing off the initial cost of an asset.
96
Can you give me some examples of 5% or 0 rate VAT items ?
From VAT notice 708
5%
• Installation of energy saving materials
• Renovation of empty residential properties
0%
• Alteration to suit the conditions of people with disabilities
97
What are management accounts ?
Management accounts are an internal account, which the managers of a company use to monitor performance.
98
What are Financial accounts ?
Financial accounts are a published account, which gives external organisations (banks, other businesses etc) information about the company’s annual performance.
99
What is cash flow ?
Cash flow is essentially the movement of money into and out of a business. Examples of this are as follows;
IN Revenue from sales, loans, investment etc.
OUT Staff wages, rent, mortgages, utilities, fuel, interest on loans, payments for goods/services.
100
What are the requirements on the companies act 2006 ?
Company to keep adequate accounting records.
101
What is Misappropriation of company funds ?
Misappropriation of company funds is considered fraud and may be an internal matter involving employees or funds being diverted to another company – or might involve a criminal gang infiltrating a company.
In cases involving misappropriation of company funds, it is possible to issue a claim against the perpetrator – whether a company or an individual – to recover monies diverted or stolen and claim damages.
102
What is included in a set of accounts?
The main account types include Revenue, Expenses, Assets, Liabilities, and Equity
103
What is GAAP ?
Generally Accepted Accounting Principles in the UK (UK GAAP) is the body of accounting standards published by the UK’s Financial Reporting Council (FRC). In this section you can find summaries of the standards and practical resources such as factsheets, FAQs, model accounts, and eBooks.
104
What is a cash flow statement?
A Cash Flow Statement shows how much cash is generated from a company's core products or services. A strong, positive cash flow from operations (especially over time) is a good sign of a healthy company.
105
What is a balance sheet ?
A balance sheet shows the value of a business on a particular date. A balance sheet shows what the business owns and owes (its assets and its liabilities).
106
What is a Cash flow statement?
A Cash Flow Statement shows how much cash is generated from a company's core products or services. A strong, positive cash flow from operations (especially over time) is a good sign of a healthy company.
107
What do you know about your companies accounts ?
Cash flow forecasting is the process of obtaining an estimate or forecast of a company's future financial position; the cash flow forecast is typically based on anticipated payments and receivables
108
What is created each and submitted each year ?
As part of the companies Act 2006 a company has to return annual account
109
Can you run me though your company accounts ?
Company accounts are a summary of an organisation's financial activity over a 12 month period. They are prepared for Companies House and HM Revenue & Customs every year and consist of the Balance Sheet, the Profit and Loss Statement, and the Cash Flow Statement
110
How do you calculate utilisation ?
The basic formula is pretty simple: it's the number of billable hours divided by the total number of available hours (x 100). So, if an employee billed for 32 hours from a 40-hour week, they would have a utilization rate of 80%.
111
What is a cash flow forecast ?
Cash flow forecasting, also known as cash forecasting, is a way of estimating the flow of cash coming in and out of your business, across all areas, over a given period of time. ... A short-term cash forecast may cover the next 30 days and can be used to identify any funding needs or excess cash in the immediate term.
112
When should a company be registered for VAT ?
If the company a VAT taxable turnover to be greater than £85,000 in the last 12 months or in the proceeding 30 day period.
113
What is the threshold for being registered to VAT ?
£85,000
114
How much did VAT rise?
2.5% (17.5% increased to 20%)
115
Give me an example of different VAT rates ?
Standard rate=20%
Reduced rate=5%
Zero rate=0%
116
What is the current rate of VAT ?
Standard - 20%,
Reduced = 5% such as power bills,
Zero - zero rated goods and services such as children's clothes.
117
What is domestic reverse charge ?
The domestic reverse charge is a VAT procedure that was implemented in the UK on March 1st 2021 for construction services. Under the domestic reverse charge procedure, the buyer (contractor) accounts for the VAT rather than the supplier (subcontractor). this is try and account for missing VAT payments
118
Who does Domestic Reverse charge apply to ?
Main Contractors and Subcontractors
119
What is the VAT reverse charge ?
The customer receiving the service will have to pay the VAT due to HMRC instead of paying the supplier if they are VAT registered and part of the Construction Industry Scheme (CIS) - see flowcharts for further info
120
What is the difference between a profit and loss sheet and a balance sheet ?
The Profit and Loss account is the statement of income and expenses which shows the net profit and loss for the particular period
Balance sheet is the statement of assets, liabilities and capital which showing the actual financial position of an entity at a certain point in time.
121
What does EBITDA stand for ?
EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and its margins reflect a firm's short-term operational efficiency. EBITDA is useful when comparing companies with different capital investment, debt, and tax profiles.
122
What is a profit and loss statement ?
The profit and loss statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period. / • Financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time, usually yearly.
123
What is a balance sheet?
It is a snapshot of a companies financial status showing the assets, liabilities, shareholders equity at any given point.
124
Give me some examples of the subject areas of the RICS Professional Statement on Conflicts of Interest.
* Record Keeping
* Party conflicts
* Informed consent
* Information barriers
* Own interest conflicts
* Confidential information
125
What is the difference between a profit and loss statement and a balance sheet?
A profit and loss shows the income and expenditures of a company and resulting profit or loss.
The balance sheet shows what a company owns (assets) and what it owes ((liabilities) at any given point.
A profit and loss statement summarises the revenues, costs and expenses and a balance sheet shows the value of a business on a particular date and shows what the business owns and owes (assets and liabilities).
126
What do companies need to provide every year to comply with the Companies Act 2006?
Accounts for the company at the end of each financial year
127
What is accounting?
It is the process of keeping financial accounts of something.
128
What are company accounts?
Legal requirement submitted to HMRC. It is a record of the companies financial performance
129
What are management accounts?
These are produced for internal usage for particular requirements such as calculating acquisitions. It can be in any format for the purposes of what it is needed for.
130
How do you deliver healthy cashflow?
Ensure cash revenue is greater than expenses.
131
What does a Dun and Bradstreet report show?
It compiles business information to measure the creditworthiness of a company. They are the business equivalent of a credit report check. It will colour code the companies financial status from green, red or orange/yellow to show their risk.
132
What are the limitations of a Dun and Bradstreet Report?
It is limited only to the latest submitted documents on companies house.
133
Why do companies keep accounts?
For regulatory purposes, to keep track/record of outgoings and in goings and compare performances and to plan future growth.
134
How are fee proposals prepared?
A fee proposal is prepared using an estimate of the time required to carry out a job multiplied by the cost of your hire on an hourly rate. A percentage will then be added for company overheads.
135
What is goodwill ?
An intangible asset that arises when a buyer acquires an existing business. It represents assets that are not separately identifiable.
136
What is bankruptcy ?
The legal process where people or companies who cannot repay debts may seek relief from the government of their debt. It is court ordered. It stays on your financial record for up to 10 years
137
What is receivership ?
The process in which a ‘receiver’ is appointed by a creditor to liquidate company assets to allow creditors to recoup their money.
138
What is retention and why do we keep this ?
Retention is the withholding of a percentage of a contract sum to ensure the contractor properly completes the activities required
139
What is solvency ?
The possession of assets in excess of liabilities; ability to pay one's debts.
140
What is a Cash flow statement ?
A financial statement that shows all the cash inflow a company receives from operations and external investment. It also shows cash outflow that pays for business activities during a given period.
141
What is a profit and loss statement ?
A document which shows the amount of income generated against the expenses made during a specified period.
142
What is a balance sheet ?
It is a snapshot of a companies financial status showing the assets, liabilities, shareholders equity at any given point.
143
What is the difference between a Sole Trader, Partnership, Limited, and a LLP ?
* Sole Trader A person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses (unlimited liability).-
* Partnership A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business.
* Limited In a limited company, the shareholders' liability is limited to the capital they originally invested. If such company becomes insolvent, the shareholders personal assets remain protected. Shares in a private limited company are not offered to the general public (distinguishing it from a public limited company - plc.)
* Limited Liability Partnership (LLP)A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence.
144
What is VAT ?
Value added tax, it is charged to companies with a turnover of more than £85,000.
145
What are Capital Allowances ?
A sum of money, that can be deducted from a company's overall tax corporate or income tax on its profits. Calculated based off the purchase of specific items.
146
Who can claim Capital Allowances?
* Limited Companies
| * Sole traders
147
What is Insolvency ?
Where a company is unable to pay its way.
148
What are the signs of insolvency ?
* Overvaluing Interim Valuations
* Front Loading
* Dissatisfied workforce
* Asking for upfront payment
* Contractual Approach.
149
Who is employed when a company becomes insolvent ?
* Administrator, who will try to keep the company going.
| * Liquidator, who will wind up the company and sell the assets.
150
What options are available to a company that has gone insolvent ?
* Administration
* Company Voluntary Agreement
* Compulsory Liquidations.
151
What is Administration ?
A method of holding a business together, whilst plans are formed to either restructure the business of sell assets.
152
What is a statement of profit or loss ?
Measure of business performance (income and cost) over a given period of time, usually a year.
153
What is a cashflow statement?
A Cash Flow Statement shows how much cash is generated from a company's core products or services. A strong, positive cash flow from operations (especially over time) is a good sign of a healthy company.
154
What is a balance sheet ?
A balance sheet shows the value of a business on a particular date. A balance sheet shows its assets and its liabilities.
155
What is the difference between a profit and loss statement and a balance sheet ?
A balance sheet provides both investors and creditors with a snapshot as to how effectively a company's management uses its resources. A profit and loss (P&L) statement summarizes the revenues, costs and expenses incurred during a specific period of time
156
Give me some examples of how you forecast your individual fee income.
I keep a weekly and monthly log of ongoing project, billing dates and amounts to ensure I have visibility and clarity of I am going to hit my targets.
157
What do companies need to provide every year to comply with the Companies Act 2006?
An annual summary of a company's capital and shares by means of a statement of capital, together with an up-to-date list of directors with their names, service address and business occupation.
158
Give me some examples of the subject matter of the RICS Guidance Note on Practice Management (Management of Surveying Businesses - you have not mentioned this document, but I suggest you familiarise yourself with it).
This document is archived and not longer valid.
159
What current challenges is Covid and/or Brexit bringing to Accounting Principles?
The initial lack of face to face interaction make general business and day to day ongoing challenging. As demenadn ahs increased for labour, constrctor and materials this is having an impact on the suitability of works across the sector.
160
What is a creditor ?
Someone who you owe money
161
What is a debtor ?
Some who owes you money
162
Why might financial information be included in a business plan ?
* Balance sheets
* Income statements
* Cash flow statements
* Statements of shareholders' equity
163
Give me some examples of some new business areas your employer could considering moving into.
The inclusion of technology such as laser scanning and drones into our offering to provide additional data within our services.
164
Briefly explain your employer’s cost recovery fee model.
165
What is a profit and loss statement ?
Measure of business performance (income and cost) over a given period of time, usually a year.
166
What is a balance sheet ?
A snapshot of the business assets and liabilities on a particular day
167
What is a cash flow statement ?
Shows how the business as generate and disposed of cash and liquid fund during a specific period
168
What is a dun and bradstreet report ?
