Accounting Principles & Procedures

Question 1

What is the difference between a management and company account?

Answer 1

Management account = prepared for internal purposes.
Company account for external purposes

Question 1

What is a balance sheet?

Answer 1

Shows all your assets and liabilities

Question 2

What is a profit and loss statement?

Answer 2

Shows all your income and expenditures.

Question 3

What should be in a PLC account?

Answer 3

1. Chairman’s statement.
2. Auditor’s report.
3. P&L account.
4. Balance sheet.
5. Corporate governance report.
6. Remuneration report.
7. Other statutory information.

Question 4

What would you find in a management account that you wouldn’t in a statutory account? What is the purpose of this?

Answer 4

For internal purposes only, not been signed off by chartered accountant.

Question 5

What happens to the interest generated from a client account?

Answer 5

To be decided with the client, but typically it would be given back to the client.

Question 6

What is the RICS Client Money Handling Professional Statement?

Answer 6

Guidance for how to properly hold client’s money.

Question 7

What is a cash flow statement?

Answer 7

For business planning purposes, forecasting future revenue stream and costs.

Question 8

What is a client account and what makes it a client account?

Answer 8

Client’s name on the account.

Question 9

Companies Act 2006

Answer 9

Legislation that governs how companies are run
financial accounts must be prepared for each financial year including balance sheet, profit and loss account