Accounting L1 - SoE Q’s Flashcards
How can you check the financial standing of a company?
Dun and Bradstreet report to provide a business credit report.
What is a Profit and Loss Account?
Shows the company’s revenue and expenses over a set period of time. This shows if the company has made a profit or a loss over that period.
What is a Balance sheet?
A snapshot of the company’s financial position at a given point in time. Reports on companies Assets, liabilities, and ownership equity.
What is a Cash Flow forecast?
Typically shown as an S Curve and shows incoming or outgoing of money to or from a company over a given period.
What are financial and management accounts?
Financial Account - Company accounts protected by law and presented to stakeholders.
Management account - For internal use of the management team.
What Act makes it compulsory to publish financial statements?
The Companies Act 2006.
What is GAAP UK?
Generally Accepted Accounting Practice in the UK (UK GAAP) is the body of accounting standards published by the UK’s Financial Reporting Council (FRC).
GAAP is the overall body regulation establishing how company accounts must be prepared in the UK.
What is the difference between administration and liquidation?
Administration - An administrator is appointed to manage the companies’ affairs on behalf of the creditors.
Liquidation - The shutting down of the company and selling of assets to pay off the creditors.
What is bankruptcy?
Way to deal with debts they cannot pay.
Does not apply to companies or partnerships.
Assets are shared among the creditors.
Allows the individual to make a fresh start free from debt.
What tool is used to accurately record your hours?
I update my timesheets on a weekly basis to record my hours on each project for that week. This is used as a way of managing project profitability.
What is the purpose of accurately recording your hours on each project?
It assists in managing project profitability, highlighting whether too much resource is being used on a particular job in comparison to what was forecast.
What would you typically see on a profit and loss statement?
Turnover
Gross Profit
Operating Profit
Tax on Profit
Profit for the Financial Year
What are the three financial statements a company is required to provide?
Profit and Loss Statement
Balance Sheet
Cash Flow
How do you assist in your company’s financial performance?
lassist in my company’s financial performance by ensuring that I spend appropriate levels of time on each project with the aim of achieving profitability.
Where possible, I network at local events with the aim of meeting new clients and securing future work.
