Accounting Principles and Business planning

Question 1

What is a LLP

Answer 1

is a business structure where partners run the company together but have limited personal liability

Question 2

What is Private Limited Company (Ltd

Answer 2

A separate legal entity owned by shareholders, with limited liability for owners.

Question 3

What is an asset ?

Answer 3

Something valuable that a person or business owns. It can generate income or provide future benefits.

Question 4

Example of an asset ?

Answer 4

o Cash
o Property (land, buildings)
o Equipment or machinery
o Inventory (products to sell)
o Investments (stocks, bonds)

Question 5

What is a Liability: ?

Answer 5

A debt or obligation that a person or business owes to others, which must be paid in the future

Question 6

Example of a liability

Answer 6

o Loans
o Credit card debt
o Mortgages
o Unpaid bills (like rent or utilities)
o Taxes owed

Question 7

What is equity ?

Answer 7

Assets – Liabilities

Question 8

What is a balance sheet ?

Answer 8

Statement of financial position shows company’s assets and liabilities. shareholder equity At a given date usually at end of finacial year

Question 9

What is an income statement

Answer 9

profit and loss account)- summary of business income and expenditure transactions prep on annual basis. At the bottom, an income statement shows the company’s net profit (or net loss),net income. prepared on annual basis.

Question 10

What is a Cash flow statement

Answer 10

A cash flow statement summarizes the amount of cash and cash equivalents entering and leaving a company. Statement of owner’s equity.- Shows companys expenture at a certain date. At the bottom of a cash flow statement, you will find the net increase or decrease

Question 11

difference between income statement and cash flow statement ?

Answer 11

Income doesnt take into account vat and cashflow does

Question 12

What is a Management account

Answer 12

For Internal use only

Question 13

Financial accounts

Answer 13

For external use shared with HMRC and companies house

Question 14

Operating Costs

Answer 14

ongoing expenses incurred during the normal operation of a business, including costs for maintenance, utilities, salaries, and other day-to-day expenses

Question 15

Capital Expenditure (CapEx)

Answer 15

refers to funds used by a business to acquire, upgrade, or maintain physical assets such as property, equipment, or infrastructure. These are typically long-term investments intended to improve future profitability.

Question 16

What software do businesses use to business plan

Answer 16

Bizplan

Question 17

What is IFRS

Answer 17

International Financial Reporting Standards) are global accounting standards that ensure transparency, consistency, and comparability of financial statements across international boundaries, making it easier for investors to assess financial performance globally.

Question 18

What is IFRS 16

Answer 18

IFRS 16 requires lessees to recognize most leases on their balance sheets, introducing a right-of-use asset and a lease liability for virtually all lease agreements.