FA for Cos - Q2 identify diff between ST and Ltd co

Question 1

What are companies required to do that sole traders are not?

Answer 1

Accounts are required to be produced in accordance with statute under companies act.

Question 2

What is main ramification of requirement to meet statutory rules in producing accounts for companies?

Answer 2

Requirement to categorise headings in P+L and Balance sheet

Question 3

What is the difference in recording liabilities and assets

Answer 3

ST = current asset and liability/long term liability Co will have current assets and creditors - amounts falling due within one year & Creditors - amounts falling due after more than one year

Question 4

What is difference between ST P+L and Co

Answer 4

ST = Sales less COGs = GP less overheads = NP; Co T/o less COGS = GP less D & A plus Op inc = Op profit Int receive/payable P before T, tax P for year.

Question 5

Apart from categories what is materially different on ST/Co Balance sheet

Answer 5

Capital account = Capital & Reserves

Question 6

In respect of proprietor/ST what is material difference in recording monetary relationship to business

Answer 6

ST = drawings Co = DLA

Question 7

What is main difference between capital account & Capital and Reserves

Answer 7

ST = Op cap, cap intro, profit less drawings = close cap; Co called up share capital +/- Profit and loss acoount = shareholders funds.

Question 8

What specifically does a company balance sheet have to include which refers to the directors and is not on ST balance sheet?

Answer 8

Signed by directors