Accounting Principles & Procedures

Question 1

3 different types of financial statements

Answer 1

1. Balance Sheet
   ‘Financial position of a company’
   Assets and Liabilities
2. Income Statement
   Profit and loss summary
3. Cash Flow Statement
   Actual expenditure v receipts +VAT

Question 2

Asset and Liability

Answer 2

Asset - property, cash, debtors

Liability - creditors, loans

Question 3

What is GAAP

Answer 3

Generally Accepted Accounting Procedures

Standardised set of procedures to allow consistency and transparency

Question 4

Difference between UK GAAP and IFRS

Answer 4

IFRS is mandatory for UK companies which are publicly listed on the LSE
GAAP used by most UK private companies