Accounting principles and procedures Flashcards
You mention in your submission that you understand the methods of external financial reporting? What might you typically find on a profit and loss statement?
Profit & Loss Account, is the account that shows the revenue earned and expenses sustained by the company, during the course of business, in a financial year.
Can you explain how you create a fee proposal?
Define the Project’s Scope. Define the Statement of Work for the project. …
Create a Spreadsheet for the Project. …
Explain the Meaning of Each Column. …
List Each Service with Tasks and Rates. …
Create a Total for the Project Phase. …
Format the Spreadsheet. …
Create a “Grand Total” of the Project. …
Proofread the Fee Proposal
How do you undertake a credit check?
Creditsafe check or company house
How is insolvency dealt with in your Contract?
Contract Provisions - SBCC DB Contract 2016: Section 8 - Termination
Step 1 – Issue a Termination of Contract Notice
Step 2 – Secure the Works
Step 3 – Inspection of the Works
Step 4 – Secure access to ownership of all design information, specifications and drawings
Step 5 - Review options for completion of the Works
Step 6 – Final Account
Other risks associated with an insolvency event:
Quality of workmanship and the extent of remedial works/defects
Cash balance to complete v paid to date leaves insufficient funds
Additional time/cost for the client and employer’s agent
How does revenue expenditure differ from capital expenditure in business accounts?
Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are the ongoing operating expenses, which are short-term expenses used to run the daily business operations
What are the main types of ratio analysis used to assess a company financial strength?
In general, financial ratios can be broken down into four main categories—1) profitability or return on investment; 2) liquidity; 3) leverage, and 4) operating or efficiency—with several specific ratio calculations prescribed within each
What is the difference between company management and financial accounts?
Company management accounts are internal business accounts that companies used to monitor financial performance
Financial accounts are published accounts - such as a profit and loss account
Why do chartered surveyors in your pathway need to understand and be able to interpret company accounts?
Chartered surveyors are eligible to set up their own practice and need to understand how company accounts work to do this.
Where you have provided advice to clients over the financial standing of applicants after undertaking credit checks – do you consider yourself suitably qualified to provide financial advice of this nature?
No we provide creditchecks for the client’s information only. Financial advice on company accounts should be provided by an accountant.
How would you check the financial standing of a public company and a private company?
PLC - online - company house or credit reference
private company - accounts could be requested through a pre-qualification questionnaire
