Accounting Principle & Procedures Flashcards
What are the contents of a set of public limited company accounts?
- Chairman’s statement
- Independent auditor’s report
- Income statement (profit and loss account)
- Statement of financial position (balance sheet)
- Corporate governance report
- Remuneration report
- Other statutory information
What is in a balance sheet?
A Balance sheet (statement of financial position) is a statement of the business’s financial position showing its assets and liabilities at a given date, usually at the end of a financial year
- Assets can include cash, property, debtors and other investments held
- Liabilities can include borrowings, overdrafts, loans and creditors
What is a Profit and Loss Account (Income statement)?
It is a summary of the business’s income and expenditure transactions, prepared usually on an annual basis
What are management accounts?
They are prepared for internal use by a business and are not audited
Who are audited accounts prepared by?
Chartered or Certified Accountant
What does a consolidated set of accounts comprise?
Consolidated set of accounts comprises a number of individual subsidiary accounts for a company within a single set of accounts
What does a cash flow statement show?
It shows all actual receipets and expenditure to include VAT
What is the important accountancy change?
There is an important accountancy change which has an impact on how occupiers regard their property liabilities. IFRS 16 is the least accounting standard with which all companies have to comply when using the International Financial Reporting Standards. THe full cost of leases have to be accounted for on the balance sheet. An occupier’s obligation to pay rent has to be recognised as a liability, though service charge payments would be accounted for separately. Exemptions exist for leases of 12 months or shorter.
