Accounting principles & procedures L1

Question 1

What are the three types of financial statement you may come across relating to a company?

Answer 1

A

Question 2

What is an asset / liability?

Answer 2

A

Question 3

Can you give me an example of each?

Answer 3

A

Question 4

What is the difference between financial and management accounts?

Answer 4

A

Question 5

What do you understand by the term Generally Accepted Accounting Principles (GAAP)?

Answer 5

A

Question 6

How do companies know which reporting framework to comply with?

Answer 6

A

Question 7

Which reporting framework do public limited companies have to comply with?

Answer 7

A

Question 8

How would you assess the financial strength of an entity e.g. for a valuation?

Answer 8

A

Question 9

Can you tell me about a common financial measure?

Answer 9

A

Question 10

What is the acid test / ROCE / working capital ratio / gearing ratio / net assets per share?

Answer 10

A

Question 11

Can you tell me what the role of an auditor is?

Answer 11

A

Question 12

When are audited accounts needed and why?

Answer 12

A

Question 13

How do public limited company accounts differ?

Answer 13

A

Question 14

Tell me something you understand from the Companies Act 2006.

Answer 14

A

Question 15

Tell me what it means to prepare accounts in accordance with IFRS.

Answer 15

A

Question 16

What is the difference between UK GAAP and IFRS?

Answer 16

A

Question 17

What is the basis of valuation under IFRS 13?

Answer 17

A

Question 18

What is fair value?

Answer 18

A

Question 19

What has changed in relation to lease accounting / IFRS 16?

Answer 19

A

Question 20

When did the change come into effect?

Answer 20

A

Question 21

What is FRS 102?

Answer 21

A

Question 22

What changes have been made to it?

Answer 22

A

Question 23

How has this impacted upon investment property?

Answer 23

A

Question 24

What are statutory accounts?

Answer 24

A

Question 25

Why is good financial record keeping important to you?

Answer 25

A

Question 26

Tell me three ways you ensure that clients’ money is handled properly.

Answer 26

A

Question 27

What RICS guidance or Schemes do you adhere to in doing so?

Answer 27

A

Question 28

Explain your understanding of the VAT domestic reverse charge for building and construction services.

Answer 28

A

Question 29

When do changes to the reverse charge apply from?

Answer 29

A

Question 30

What is the impact of the reverse charge on VAT accounting?

Answer 30

A

Question 31

Is VAT included in a balance sheet or a profit & loss account?

Answer 31

A

Question 32

How do you account for the impact of inflation when reporting to clients?

Answer 32

A

Question 33

(N.b. Also see client money handling questions as per Ethics competency)

Answer 33

A