Accounting Principles and Procedures Flashcards
1
Q
What is a balance sheet?
What is a profit and loss?
What is a cash flow?
A
A snapshot of a businesses financial health showing assets and liability
A profit and loss show how much money has been made or lost over a specific period of time, month or year. Revenue (sales) and expenses (rent, salaries).
A cash flow shows the money coming in and out over a period of time.
2
Q
What is ratio analysis?
A
Gross/net profit ration analysis, how profitable a business is?
3
Q
what is the difference between management accounts and statutory accounts?
A
Management account assist in running the business and making decisions
Statutory accounts are legal reports for overall financial picture for tax or shareholders
