Accounting Principles & Procedures Flashcards
What would you expect to find in a profit and loss statement?
Revenue, cost and expenses over a period of time
What would you expect to find in a balance sheet?
Assets and liabilities at a specific period of time
What would you expect to find in a cash flow statement?
A description of how effects on the balance sheet (assets and liabilities) effect available cash or cash equivalents
What effect have the IFRS 16 standards had on accounting?
Leases are now considered a liability
How has the changes involved in the IFRS 16 standards effected you work?
HMRC DLAS! Find document
What is the credit checking process carried out in you organisation?
Company investigation - beneficial owner / Dunn and Bradstreet Report / World Check
What are the potential consequences of not carrying out the sufficient due diligence checks on a potential client?
- Money laundering
- Insufficient funds
What is the difference between management accounts and company accounts?
Management accounts are a set of accounting date, such as balance sheets and cash flow prepared and presented to a firm management team only. They are used daily for short term decision
Company accounts are where PLC are required to prepare annual accounts for Companies House and HMRC every year. This information is available to the public
What would you expect to be included within a set of Company Accounts?
- Chairmen’s statement
- Independent auditors report
- Income statement
- Corporate
- Remuneration report
- Any other statutory requirements (company dependent)
What is an Escrow Account?
A bank account with defined condition for the release of funds.
For example, in a dilapidations case, an escrow account was set up by my client, who was the tenant, with the condition of release of monies being the completion of works by the landlord in lieu of dilapidations.
What is meant by the term churn rate?
Employee turn over with a period of time
What is a Dun & Bradstreet report?
A financial rating/check. Dun & Bradstreet are a leading provider of business info, and one that C&W use as part of their credit checking
What is Companies House?
It’s an executive agency that incorporates and dissolves limited companies, registers company info and makes it available to the public.
Recent copy of Modus highlighted a need for Companies House to be provided with greater powers in a bid to help prevent money laundering
What is meant by the term insolvency?
An inability to pay debts. When you liabilities exceed your assets
What is a sinking fund?
A sinking fund is the process of setting aside revenue to fund future capital expenses or repayment of long term debt.
We were instructed by a student resi company who were managing their estate via sinking fund, who were looking to get a better idea of their actual projected expenditure
