APC Mandatory - Accounting Flashcards

1
Q

What are the Generaly accepted accounting principles GAAP?

A

They are the standards that encompass the details, complexities and legalities of corporate accounting.

(Generally used by public bodies and larger cooperations and will aim to focus on FORC-M)

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2
Q

What does GAAP include

A

FORCM
Focuses on consistency via below
Full disclosure
Objectivity
Revenue
Costs
Matching

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3
Q

What are management accounts?

A

Detailed INTERNAL reports focused on a businesses financial health and operational efficiency

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4
Q

When should management accounts be prepared?

A

Unlike annual reports, they can be prepared monthly or quarterly.

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5
Q

What are annual accounts for private ltd companies?

A

Summary of organisation’s financial activities over a 12 month period. Prepared for companies House and hmrc and include a balance sheet, p&l and a cash flow statement

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6
Q

What is a balance sheet

A

Statement of financial position

Provides a snapshot insight into a companies assets and liabilities at a given date, usually at the end of a financial year.

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7
Q

On a balance sheet what are assets and liabilities?

A

Assets: cash, land, property, vechiles or stock.
Liabilities: obligation for debt to be repaid such as credit card, loans, mortgages

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8
Q

What is a P&L statement

A

Shows income/expenditure for the company over the financial year

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9
Q

What is a cashflow statement

A

Receipts/expenditure during an accounting period

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10
Q

When is a statutory financial audit required?

A

Companies act 2006
Auditors verify accountants work

Small and micro businesses are exempt if:
Anuall turnover less than 10.2m
Balance sheet less than 5.1m
Number of employees less than 50

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11
Q

What is the IFRS

A

International financial reporting standards promotes [TAE] transparency, accountability and efficiency.
FRS 102 principle accounting standards in uk financial reporting regime
FRS 15 is used for public sector context
FRS 16 changes in 2019 Inc. Leases more than 12 months must be recorded on the balance sheet

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12
Q

What is gross profit?

A

REVENUE - COST IF GOODS SOLD

Company profit after deduction of costs for making/selling products associated with providing its services

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13
Q

What is net profit?

A

TOTAL REVENUE-TOTAL EXPENSES

net earnings after deducting total expenses from revenue

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14
Q

What is accounting?

A

Process of keeping financial accounts

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15
Q

What is meant by the terms Gross and Net?

A

In salary terms, Gross is the total salary and Net is the salary minus tax and other deductions

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16
Q

Why do Chartered surveyors need to understand and be able to interpretation company accounts?

A

A) assessing competition
B) setting up new firm
C) assist with business operations
D) rental analysis for percentage turnover top ups etc.

17
Q

What does EBIDTA mean?

A

Earning s before interest, taxes, depreciation, and amortisation

18
Q

What is VAT

A

Value added tax
Standard rate 20%

19
Q

Uk GAAP

A

GAAP in the UK. Valuations for inclusion in financial statements are prepared in accordance with UK GAAP

20
Q

What is the difference between GAAP and IFRS

A

GAAP = Rule based
IFRS = Principle based