Accounting Ps And Ps Flashcards
What act required audited accounts?
Companies act 2006
What is a balance sheet?
Snapshot at a given point. A statement of a businesses financial position showing assets and liabilities at a given date.
What is an income statement?
A summary of the business income and expenditure transactions usually prepared on an annual basis and reflect the business position over a period of time.
Profit and loss account - shows how revenue is transformed into net profit.
What is a cash flow statement?
Summary of the cash or net asset entering or leaving a company over a period. Measures how was a company managed cash to pay obligations.
What is a PLC?
Public listed company that offer shares of stock to public on FTSE 100. Regulated and required to report on financial health. Can raise funds though shareholder equity .
What is an audit?
An opinion on the accounts of a business, if they are a fair reflection and prepared in line with companies act 2006
What is Dun and Bradstreet?
Focus on business credit. Report how business interacts with vendors and other suppliers.
What is Experian report?
Lois at info on public record including legal filings from local country and state governments as well as information from credit card companies, collection agencies and corporate financial information databases.
What is equifax reports?
Used trade credit information and data from public record such as loans bankruptcies or judgements against a company to compile company’s credit report
What is an asset test?
Quick ratio to understand how well liabilities are covered by assets.
Assets/liabilities
What is ROCE?
Return on capital employed.
Earnings before interest tax depreciation and amortisation (EBITDA) / capital employed
What is the gearing ratio?
Net debt/ shareholders equity
When is an audit required?
If company is a PLC, insurance company, banking firm, if shares traded in EU state and if 10% of shareholders request this.
If turnover is greater than £10.2m
If assets are greater than £5.1m
If more employees that 50
What else if included in public limited company accounts?
Chairman’s statement, auditors report, income statement, balance sheet, corporate governance report, remuneration report, statutory information.
What is fair value?
IFRS definition: fair value is the price paid for an asset in transaction between market participant at measurement date.
Same as market value
