Accounting Principles and procedures

Question 1

What does a set of public limited company accounts include? (7)

Answer 1

Chairman’s statement
Independent auditor’s report
Income Statement (P&L account)
Statement of financial position (Balance sheet)
Corporate Governance report
Remuneration report
Other Statutory information

Question 2

What is a Balance Sheet?

Answer 2

A balance sheet is a statement of the business’s financial position showing its assets and liabilities at a given date (usually at the end of a financial year).

Question 3

What are some examples of assets on a balance sheet?

Answer 3

Assets can include, Cash, property, debtors and other investments held.

Question 4

What are some examples of Liabilities on a balance sheet?

Answer 4

Liabilities can include borrowings, overdrafts, loans and creditors.

Question 5

What is a profit and loss account?

Answer 5

is a summary of the business’s income and expenditure transactions, prepared usually on an annual basis

Question 6

What is the difference between Management and Audited accounts

Answer 6

Management accounts are prepared for internal use by a business and are not audited. Audited accounts are prepared by a Chartered or Certified Accountant.

Question 7

Consolidated Accounts

Answer 7

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

Question 8

What does a cash flow statement show

Answer 8

All the actual reciepts and expenditure to include VAT

Question 9

IFRS 16

Question 10

Purpose of a balance sheet

Question 11

Purpose of P&L account

Question 12

Why do businesses have management accounts?

Question 13

Why do we have statutory accounts?