Accounting

Question 1

What are the contents of a set of public limited company accounts?

Answer 1

• Chairman’s statement
• Independent auditors report
• Income statement
• Balance sheet
• Governance report
• Remuneration report

Question 2

What is a balance sheet?

Answer 2

Statement of financial position
- Shows assets and liabilities on a given date
(Assets - cash, property, debtors)
(Liabilities - borrowings, creditors, loans and overdrafts)

Question 3

What is a Profit and Loss account?

Answer 3

Income statement
- A summary of the income and expenditure, prepared on an annual basis

Question 4

What are management accounts?

Answer 4

• Prepared for internal use by a business and are not audited

Question 5

What are company accounts?

Answer 5

Statutory accounts prepared by an external auditor

Question 6

What is a cash flow statement?

Answer 6

Shows all receipts and expenditure to include VAT

Question 7

What is IFRS16?

Answer 7

• A lease accounting standard which companies have to comply with when using IFRS.
• Full cost of lease has to be accounted for on the balance sheet.
• An occupiers obligation to pay rent has to be recognised as a liability.
• Exemptions exist for 12 months or shorter

Question 8

What is GAAP?

Answer 8

Generally Accepted Accounting Principles
- States how accounts must be prepared