Accounting Procedures and Principles Flashcards
1
Q
What are capital allowances?
A
Tax reliefs
2
Q
Why are company accounts needed?
A
Required by Companies Act 2006
3
Q
What types of accounts are you familiar with?
A
Balance sheet
Profit and loss statement
Cashflow statement
4
Q
Can you explain what a balance sheet is?
A
A statement at a point in time showing assets and liabilities
5
Q
What accounting ratios are you familiar with?
A
Liquidity ratio
Gearing ratio
6
Q
What is a liquidity ratio and what is the formula?
A
To determine a debtors to pay of debt without borrowing
Current ratio = current assets / current liabilities
Cash ratio = cash / current liabilities
