Accounting Principles

Question 1

What are the key financial statements that companies provide?

Answer 1

1. Profit and loss accounts
2. Balance sheets
3. Cash flow statements

Question 2

What is a profit and loss account?

Answer 2

Shows the company’s sales, running costs and profit and loss over 1 year

Question 3

What is a balance sheet?

Answer 3

Shows what a company owns and what it owes at a given point in time

Question 4

What is a cash flow statement?

Answer 4

A summary of ingoing and outgoing of cash in a firm over the accounting period

Question 5

What websites do you use to gain credit data?

Answer 5

Dun and Bradstreet

Question 6

What does Dun and Bradstreet do?

Answer 6

Builds a strong picture of a covenant’s strength

Question 7

What should be on your Terms of Engagement in regards to Accounting?

Answer 7

1. The agreed fee
2. The process of credit control procedures in the event of an unpaid client invoice

Question 8

What is an S-Curve?

Answer 8

It means ‘standard’ and refers to the shape of the expenditure profile when shown in graphical form

Question 9

What are management accounts?

Answer 9

The accounts prepared for internal management use

Question 10

What is a cash flow forecast?

Answer 10

Summarises the cash entering and leaving a company

Question 11

When have you used company accounts in your work?

Answer 11

To assess a financial strength of a prospective tenant

Question 13

How do you carry out a Credit Check?

Answer 13

I use the Credit Safe