Accounting Principles & Procedures Flashcards
Why is a knowledge of accounts important for surveyors?
Analysis of a companies accounts can give an indication of security and therefore value. Surveyors can also understand their own/their companies financial health.
What is the difference between company and management accounts?
Company accounts are a legal requirement and are public; management accounts are for internal strategic and forecasting purposes.
CA = submitted to HMRC and Companies House.
What do company accounts comprise?
Profit and Loss; Cash Flow Statement & Balance Sheet
What is a profit and loss account?
Income minus expenditure.
What is a balance sheet?
Summary of assets and liabilities. It shows what a company owns and owes.
What might assets in a balance sheet include?
Land, premises, stock, vehicles, cash
What might liabilities in a balance sheet include?
Creditors, loans
What is a cash flow statement?
Shows cash generated and used during a specific period.
Why are financial statements important?
They determine and show the ability to generate cash, pay debt and track financial events.
What is SDLT?
Stamp Duty Land Tax - a tax on purchasing freehold and leasehold interests.
What are the current thresholds for SDLT?
0% on first £150k; 2% on next £100k; 5% on everything over.
What is VAT?
A tax on services and goods. Currently 20%.
What is the threshold for mandatory VAT registration?
£85,000 turnover
Give some examples for where there is a 0% VAT allowance.
Installations for disability access, construction, work on some charitable buildings.
What are business rates?
Tax on property used for business purposes.
