Accounting Principles & Procedures

Question 1

What are the 3 Main Financial Statements Companies must keep?

Answer 1

Cashflow Statement
Balance Sheet
Profit and Loss Statement

Question 2

What are the main differences between management and financial accounts

Answer 2

Management accounts are for the internal use of the management team.
Financial accounts are the company accounts required by law.

Question 3

Profit and Loss Statement

Answer 3

Incomes and expenditures of the company and the resulting profit and loss.

Question 4

Balance Sheet

Answer 4

The combination of a companies total assets and liabilities.

Question 5

Cashflow Statement

Answer 5

Summary of actual incoming and outgoing cash into a company.
Measuring the short term ability for a company to pay its debts.

Question 6

Insolvency Meaning

Answer 6

Inability to pay its debts. Liabilities are greater than assets.

Question 7

40 Broadway Account Review

Answer 7

Review of O’Keefe went into a Company Volentary Agreement, meaning it was paying its debtors only part of the sum owed whilst new arrangements are agreed.

Question 8

Role of an Auditor

Answer 8

Inspect financial accounts to ensure they’re correct and they comply within the law.

Question 9

Difference between Administration and Liquidation

Answer 9

Liquidation - Selling of the assets when there is no chance of saving the company
Administration - Selling of assets when there is a chance of saving the company.