Accounting Principles

Question 1

What is the difference between management accounts and audited accounts

Answer 1

Managed accounts are for internal use only where as audited are prepared by a chartered accountant

Question 2

What is a profit and loss statement

Answer 2

A summary of income and expenditure transactions prepared annually

Question 3

What is IFRS16

Answer 3

This is accounting standard put in place that stipulates leases have to be on the balance sheet as a liability

Question 4

What is a cash flow statement

Answer 4

It shows all the actual receipts and expenditure to include VAT

Question 5

What is a balance sheet

Answer 5

This shows a business’s financial position showing assets and liabilities
Assets = Cash, property, debtors and investments
Liabilities = borrowing, overdrafts, loans, creditors

Question 6

What is a consolidated set of accounts

Answer 6

It comprises a number of individual subsidiary accounts for a company within a single set of accounts

Question 7

What would you find within a Public Limited company accounts

Answer 7

Chairman’s statement
Independent auditors report
Income statement (Profit and loss accounts)
Statement of financial position (balance sheet)
Corporate governance report
Remuneration report
Other statutory information

Question 8

What is the alternative to red flag

Answer 8

Dun & Bradstreet

Question 9

What do you look for in a Dun & Bradstreet

Answer 9

I review the the financial strength rating and D&B Indicator. But I would only comment on the results as only a qualified accountant can provide a recommendation based on these results.