Accounting principles & procedures Flashcards
What would you find on a balance sheet?
A balance sheet is a financial statement that reports a company’s:
Assets;
Liabilities;
Shareholders’ equity.
What are the RICS’ rules on client’s money?
As per Rule 8:
Clients’ money must be:
Held in a separate named account.
The client must be able to be identified.
Must hand money back as soon as requested.
What is a profit and loss account?
The P&L (income statement) primarily focuses on a company’s revenues and expenses during a particular period.
Revenues - Expenses = Net Income.
What is a balance sheet?
The balance sheet provides an overview of assets, liabilities, and stockholders’ equity as a snapshot in time.
What is a cashflow?
The cash flow statement (CFS) measures how well a company generates cash to pay its debt obligations, fund its operating expenses, and fund investments.
What is IFRS 13?
International Financial Reporting Standards.
They set common rules so that financial statements can be consistent, transparent, and comparable around the world.
IFRS 13 defines fair value and sets out a framework for measuring fair value.
Fair value is the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on a certain date.
What is the role of accounting principles and procedures in your area of practice?
It is important in my area of practice, as well as in any commercial enterprise, to accurately record financial information.
Legal requirement under Companies Act 2006 to provide financial statements.
Also to understand the financial health of your own business and be able to plan and adapt accordingly.
Be aware of my limitations and advise clients to seek independent advice.
Assessing tenant’s covenant strength for lettings - credit search etc.
What is the role of the auditor?
Auditors are specialists who review the accounts of companies and organisations to ensure the validity and legality of their financial records.
They can also act in an advisory role to recommend possible risk aversion measures and cost savings that could be made.
