Accounting Principles Flashcards
What is a Gross Margin?
- the amount of money left after subtracting the costs of goods sold.
What is the RICS Client Money Protection (CMP) Scheme?
- Provides protection, as a last resort, when a RICS Regulated firm is unable to repay client’s money (up to the limits and exceptions set out in the scheme rules).
- Split into 2 parts = General protection undertaking Surveying Activities & Residential Agency protection.
How do you calculate a Gross Margin?
Gross Profit / sales revenue x 100
What is a Profit & Loss Statement?
- Shows the incomes and expenditure of a company and the resulting profit or loss.
- Shows if the business is profitable overall.
When did RICS Regulation - Client Money Protection Scheme come into effect?
1st April 2019
How do you calculate Gross Profit?
Sales Revenue - Costs of Goods Sold
What is the Client Money Handling for Livestock Auctioneers: Professional Statement (2021)?
- provides mandatory requirements and guidance for RICS firms acting as livestock auctioneers.
- outlines the mandatory requirements and guidance for livestock auctioneers in terms of how to deal with client money as an agent and principal.
When have you been involved in the handling of clients money?
- Through the management of grazing licences.
When are accounts audited?
- Annually
What is GAAP?
Generally Accepted Accounting Principles
- a collection of commonly followed accounting rules and standards for financial reporting.
What is a Balance Sheet?
Shows what a company owns (assets) and what it owes (liabilities) at a given point in time.
How do you prepare a Profit & Loss Statement?
- Gross Sales
- Minus costs & fixed expenses
- Equals profit & loss
How do you prepare a Balance Sheet?
- Determine the reporting date & period.
- Identify the assets.
- Identify the liabilities.
- Calculate the shareholders equity.
- Add total liabilities and shareholders equity and compare to assets.
What is the role of an Auditor?
- Make sure that financial reports are accurate and compliant.
- Make sure accounts are free from either intentional or accidental mistakes (that could be interpreted as fraud).
What is Cash Flow Statement?
Movement of money in and out of a company reported over a period of time.
