Accounting Principles Flashcards
Tell me about some requirements under the Companies Act 2006?
- Annual financial statements are to be
audited, as applicable to each category of company. - Directors must prepare account for the company every financial year and give a fair and true representation to the state of affairs, the business and profit or loss of the company.
What is a balance sheet?
Its a snapshot at a certain point in time of a businesses financial position, showing its assets and liabilities.
what is a profit and loss statement?
Shows the businesses income and expenditure over a period of time, usually prepared annually
What is a cash flow statement?
Shows the business actual cash flows, can be used to forecast. Not included in annual accounts but used for management purposes.
What is the difference between finance accounts and management accounts?
Finance are formal accounts prepared for auditing
Management accounts are for internal purposes and not audited.
What does IFRS16 say?
That leases now must be included as an asset or liability on the balance sheet.