Accounting principals and procedures Flashcards
What is a balance sheet?
Sets out the assets and liabilities of a firm
What is Net profit?
Gross profit minus all expenses
What is Liquidity?
Measure of how quickly the business can convert assets into cash, to meet short term obligations
When does unallocated funds in a client account go to
charity?
After 3 years and all avenues of investigation have been exhausted.
When should client accounts be reconciliated?
- Once per month and no later than 6 weeks after last one.
- If only one or two transactions pr month, then a quarterly basis is enough.
What should reconciliations include?
- Dated unpresented cheques
- Dated outstanding deposits
- Details of any other reconciling items
- For general client money account reconciliations, client ledger balances and the total of balances.
what is a cashbook?
A record of all client receipts and payments in chronological order that normally provides a running balance.
What is a bank mandate?
This states the rights and obligations of the firm and
includes names of authorised signatories.
What is client money?
Money of any currency or form that a RICS regulated firm holds or receives on behalf of another person
Different types of client accounts
- a single client of the firm (discrete client money
account) or - more than one client of the firm (general client
money account).
What is a client ledger?
Records of all payments and receipts relating to a
client in chronological order. Ledgers provide a running
balance that shows the amount of money held by the
firm on behalf of that client at all times.
What is the objectives of the client money professional standard?
RICS members and RICS-regulated firms understand their obligations to ensure:
* client money is kept safe
* client money accounts are used for appropriate purposes only and
* RICS-regulated firms have the appropriate controls and procedures to safeguard client
money.
Which RICS appropriate scheme is your firm a member of?
RICS Client Money Protection Scheme for Surveying Services
Which RICS rule of conduct does handling client money come under?
Rule no.1 - Members and firms must be honest, act with integrity and comply with their professional obligations to RICS.
Requirements of RICS firms for holding client money.
- hold all client money in a client money account over which the RICS-regulated firm has exclusive control
- ensure that a client money account does not contain any sums other than the whole or any part of client money paid into it
- not hold office money in a client money account unless it is a receipt of mixed monies where the office money is awaiting transfer
- ensure that all client money accounts include the word ‘client’ (written in full) and the name of the firm in the title of the account, and that discrete client money accounts include an identifier
- ensure that money held in a client account is immediately available even at the sacrifice
of interest - ensure that where a client requests that money is held in an account to which it and the firm has access, this is a bank account set up by the client, not a firm bank account.
