Accounting Principles and Procedures Flashcards
1
Q
What is a balance Sheet?
A
Statement of business assets and liabilities, at end of financial year.
2
Q
What is a profit and loss statement?
A
A measurement of income and costs, ususally over 1 year.
3
Q
What is a cash flow statement?
A
Shows generation and expenditure of liquid assets (inc VAT).
4
Q
What is the difference between depreciated cost and fair value?
A
- Depreciated Cost = asset value depreciates over time in a predictable manner.
- Fair Value = Value based on current market and therefore volatile.
5
Q
What is difference between insolvency and liquidation?
A
Insolvent = state of being unable to pay debts.
Liquidation = Process of bringing a business to an end and distributing its assets.
6
Q
What is a liquidity ratio in terms of a Company’s health?
A
Measure of ability to pay current debt without raising additional external capital.
7
Q
What is a Dub and Bradsheet score?
A
Credit check on an organisation or firm
