Accounting Principles and Procedures Flashcards
What would you find on a profit and loss statement?
Revenue
Expenses
Gross Income
Net Income
What would you find on a balance sheet?
Assets
Liabilities
Stakeholder Equity
Investments
Property/Plant/Equipment
What would you find on a cash flow statement?
Cash from Operating Activities
Cash from Investing Activities
Cash from Financing Activities
How does the firm oganise its accounts and budgets?
Each department puts a forecast income budget for the upcoming financial year. Resources are allocated to achieve that budget in the year.
Invoices are raised on a monthly basis and progress against the budget is monitored on an ongoing basis.
At year end, any income in excess of the annual budget is divided amongst employees as a bonus incentive.
What is tax depreciation?
The setting off of the declining value of an asset against corporation tax.
What is an escrow account?
An account used to hold funds or assets being transferred between two parties, held securely by a third party.
What is the GAAP?
The Generally Accepted Accounting Principles is the governing body of accounting standards published by the UK’s Financial Reporting Council which dictate how information should be presented.
When should a company register for VAT?
When the turnover is greatet than £85,000 per annum.
What does a Dun and Bradstreet Report show?
It shows the creditworthiness of a company, but it is limited only to the latest submitted documents on companies house.
What is the Construction Industry Scheme (CIS)?
The Construction Industry Scheme (CIS) is a scheme created by HM Revenue & Customs (HMRC) for tax from contractors and subcontractors.
What does EBITDA stand for?
EBITDA is earnings before interest, taxes, depreciation, and amortisation.
What would be detailed in a fee proposal?
Confirm the brief, the scope and the programme.
Confirm the fees.
Confirm the resources allocated to the instruction.
Terms of Appointment.
What does a set of public limited company accounts include?
Chairman’s Statement
Independent Auditor’s Report
Income Statement
Statement of financial position
Corporate governance report
Remuneration report
Statutory Information
What is a balance sheet?
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 the financial year.
What assets can be included on a balance sheet?
Cash, property, debtors, investments
