Accounting Principles

Question 1

Name 3 of the contents within a set of public limited company accounts

Answer 1

Chairman’s Statement
Independent auditors report
Income Statement (Profit & Loss account)
Statement of Financial Position (Balance Sheet)
Corporate Governance Report
Remuneration Report
Other Statutory Information

Question 2

What is the difference Between Balance Sheet (Statement of Financial Position) and Profit & Loss Account (Income Statement)

Answer 2

Balance Sheet - Statement of the business financial position, showing assets and liabilities

Profit and Loss Account - Summary of a business’s income and expenditure transactions, prepared usually on an annual basis

Question 3

Who prepares Audited accounts?

Answer 3

Charted or Certified Accountant

Question 4

Name examples of Assets & Liabilities

Answer 4

Assets - Cash, Property, debtors & Other Investments

Liabilities - Borrowings, Overdrafts, Loans, and Creditors.

Question 5

What is IFRS 16

Answer 5

International Financial Reporting Standards (IFRS) - The full cost of a lease is accounted for on the balance sheet.
Obligation to pay rent is recognised as a liability, with service charge payments accounted for separately.

Question 6

What are the differences between management and statutory accounts?

Answer 6

Statutory - Statutory accounts statement is a compulsory report that will be requested by HMRC.

Question 7

What does G A A P Stand for?

Answer 7

Generally Accepted Accounting Practice

Question 8

What does IFRS stand for?

Answer 8

International Financial Reporting Standards

Question 9

What is the difference between GAAP and IFRS?

Answer 9

The primary difference between the two systems is that GAAP is rules-based and IFRS is principles-based, meaning FRS guidelines provide much less overall detail than GAAP