Accounting Principles and Procedures

Question 1

What type of things would you see in a public limited company accounts?

Answer 1

• chairman’s statement
• indpendent auditors report
• income statement (profit & loss)
• statement of financial position (balance sheet).
• corporate governance report
• remuneration report
• other statutory information

Question 2

What is a balance sheet?

Answer 2

• It is a statement of a businesses financial position.
• it displays the companies assets and liabilities at a given date, usually end of the financial year.

Question 3

Give me an example of an asset and a liability

Answer 3

assets include:

• cash
• property
• debtors
• other investments

Liabilities include:

• borrowings
• overdrafts
• loans
• creditors

Question 4

What is a profit and loss account?

Answer 4

• summary of a business’s income and expenditure transactions prepared usually on an annual basis.

Question 5

What are management accounts ?

Answer 5

accounts prepared for internal use by a business which are not audited.

Question 6

What are audited accounts?

Answer 6

audited accounts are prepared by a chartered or certified accountant.

Question 7

What is a cashflow statement?

Answer 7

shows all the actual receipts and expenditure to that incurred during the accounting period.

Question 8

What are the fines for submitting company accounts late?

Answer 8

1 month late - £150
1-3 months - £375
3-6 months - £750
6 months plus - £1500

Question 9

What is IFRS 16 with regard to how occupiers regard their property liabilities?

Answer 9

International Financial Reporting Standards.

provides that:

• cost of leases should be on the balance sheet.
• obligation to pay rent should be recognized as a liability.
  -service charges are accounted for seperately.
• leases of 12 months or shorter are exempt.

Question 10

How does the financial strength score for Dun & Bradstreet work?

Answer 10

Financial strength:

Ranges from 5A (highest) indicates a tangible net worth of 35 million plus

to

NQ (lowest) which indicates that the company is out of Business and ceased trading.

Question 11

How does the risk indicator score work for Dun & Bradstreet?

Answer 11

Ranges from 1 -4.

1 representing minimal risk and the transaction can be proceeded with.

4 representing ‘significant level of risk’ and suitable assurances should be taken before the proceeding with tenant. e.g. personal guarantee.