Accounting Principles and Procedures

  1. What are the contents of a set of public Ltd company accounts?
    • Chairman’s statement
    • Independent auditors reports
    • Income statement (profit and loss)
    • Statement of financial position (balance sheet)
    • Corporate governance report
    • Remuneration report
    • Other statutory information
  2. What is a balance sheet?
    • Is a statement of the businesses financial position showing its assets and liabilities at a given date, usually at the end of the financial year
    • Assets can include cash, property, debtors and other investments
    • Liabilities can include borrowings, overdrafts, loans and creditors
  3. What is a profit and loss account?
    A summary of the business income and expenditure transactions, prepared usually on an annual basis
  4. What are management accounts?
    Prepared for internal use and are not audited
  5. Who prepares an audited account?
    An accountant
  6. What is IFRS 16?
    • New lease accounting standards which all companies had to comply from 2019 when using the International Financial Reporting Standards.
    • The full costs of leases will have to be accounted for on the balance sheet.
    • An occupiers obligation to pay the rent will have to be recognised as a liability, though service charge payments would be accounted for separately.
    • Exemptions for leases less than 12 months
  7. What is a cash flow statement?
    • Shows all the actual receipts and expenditure to include VAT.
    • Not included in the annual accounts but is prepared for management purposes
  8. What are the guidelines that set regulation for how companies should set up accounts?
    • UK GAAP
    • IFRS
  9. What is another term for a profit and loss account?
    Income Statement
  10. What is another term for a Balance Sheet?
    Statement of financial position?
Card Set
Accounting Principles and Procedures