Accounting principles and procedures

Question 1

• What is the difference between a balance sheet and a cash flow statement

Answer 1

A balance sheet shows a snapshot of a company’s financial position at a given point in time. Shows a company’s assets, liabilities and ownership equity
Cash flow statement shows how much money you expect your business to make/receive and pay out over a set period helps to show when money will enter and leave your account.

Question 2

• What is profit and loss

Answer 2

Shows the revenue and expenditure of a business over a particular period of time.

Question 3

• What are management and financial accounts?

Answer 3

Management accounting is internally and financial accounting is meant for external stakeholders

Question 4

• You talk about protecting your client’s interests in terms of the financial health of your projects. Explain how you do this?

Answer 4

Ensuring that I am checking the cash flow compared to the progress on site. Ensure we are using a change control process to manage any potential changes and the costs of these. Checking on site progress on the programme

Question 5

• What is revenue

Answer 5

Income

Question 6

• What is solvency?

Answer 6

Solvency is the ability of a company to meet its long term debts and financial obligations

Question 7

• What is profitability?

Answer 7

Profitability is the relative measure of profit. It compares how much profit a company makes compared with its overall revenue and costs.

Question 8

• What do you submit to Companies House and how often?

Answer 8

Your annual accounts, incorporation form, and confirmation statement and its every year