Accounting Principles

Question 1

Tell me about some requirements under the Companies Act 2006?

Answer 1

• Annual financial statements are to be
  audited, as applicable to each category of company.
• Directors must prepare account for the company every financial year and give a fair and true representation to the state of affairs, the business and profit or loss of the company.

Question 2

What is a balance sheet?

Answer 2

Its a snapshot at a certain point in time of a businesses financial position, showing its assets and liabilities.

Question 3

what is a profit and loss statement?

Answer 3

Shows the businesses income and expenditure over a period of time, usually prepared annually

Question 4

What is a cash flow statement?

Answer 4

Shows the business actual cash flows, can be used to forecast. Not included in annual accounts but used for management purposes.

Question 5

What is the difference between finance accounts and management accounts?

Answer 5

Finance are formal accounts prepared for auditing

Management accounts are for internal purposes and not audited.

Question 6

What does IFRS16 say?

Answer 6

That leases now must be included as an asset or liability on the balance sheet.