Accounting Principles & Procedures Flashcards
What is included in a public Limited company accounts?
- Chairman’s statement
- Independent auditor’s report
- Income statement (profit and loss account)
- Financial position (balance sheet)
- Corporate government report
- Remuneration report
- Other statutory info
What is a balance sheet / financial statement?
A statement of the business’s financial position showing assets and liabilities at a given date.
What can assets include?
Cash, property, debtors and other investments
What can liabilities refer to?
Borrowings, overdrafts, loans and creditors
What is a profit and loss account / income statement?
A summary of a business’s income and expenditure, prepared on an annual basis
What type of account is prepared for internal use?
Management account
Is a management account audited?
No
What type of account is prepared by a Chartered Accountant?
Audited account
What is a consolidated account?
A number of individual subsidiary accounts for a company within a single set of accounts
What is a cash flow?
A cash flow statement shows all actual receipts and expenditure to include VAT.
What does IFRS stand for?
International Financial Reporting Standards
What is IFRS 16?
An important accountancy change relating to how occupiers regard their property liabilities meaning that leases have to be accounted for on a balance sheet.
Rent = liability.
S/C accounted for separately.
When is a lease exempt from IFRS 16?
If the lease is for a term of 12 months or less.
What is a statutory account?
A balance sheet
What is the difference between a profit & loss account and balance sheet?
P&L = income, revenue, expenses across a year
Balance Sheet = financial position on specific date. Includes assets and liabilities
What accounting standards are you aware of?
IFRS and UK GAAP
What does the IFRS do?
Set common rules so that all financial statements are consistent, transparent and comparable internationally
What does the UK GAAP stand for and what does it do?
General Accepted Accounting Practice in the UK.
Set by the financial reporting council (body of accounting standards for UK) and based on IFRS
