Accounting Principles & Procedures

Question 1

What is included in a set of public limited company accounts?

Answer 1

• chairman’s statement
• independent auditors report
• income statement (profit and loss account)
• statement of financial position (balance sheet)
• corporate governance report
• remuneration report
• other statutory information

Question 2

Balance Sheet / Statement of Financial Position

Answer 2

• shows assets and liabilities at a given date, usually end of financial year
• assets can include cash, property, debtors, other investments held
• liabilities can include borrowings, overdrafts, loans, creditors

Question 3

Profit and loss statement / Income statement

Answer 3

• summary of business’s income and expenditure transactions, prepared usually on an annual basis

Question 4

Cash Flow Statement

Answer 4

Shows all actual receipts ad expenditure to include VAT. not included in annual accounts but is prepared for mgmt purposes

Question 5

Management accounts

Answer 5

• prepared for internal use by a business

- not audited

Question 6

Audited accounts

Answer 6

prepared by certified or chartered accountant

Question 7

Consolidated set of accounts

Answer 7

comprises a number of individual subsidery accounts for a company within a single set of accounts

Question 8

IFRS 16

Answer 8

is new accounting standard with which all companies have to comply from 2019 when using IFRS

• full cost of leases will have to be accounted for on the balance sheet
• occupier obligation to pay rent will have to be recignised as liability, though s/c payments would be accounted for seperately (exceptions exist for leases 12 months or shorter)