Accounting

Question 1

What are the main elements of company accounts?

Answer 1

-balance sheet
-profit and loss
-cash flow statement

Question 2

What does a Dunn and bradstreet show?

Answer 2

company’s ability to pay

financial strength 5A - E? net worth

risk indicator - 1 (min) - 4

Question 3

What’s a balance sheet?

Answer 3

shows company financial position at specific point in time usually end of year via assets and liabilities

shows worth of company

Question 4

What is a profit and loss? (also known as income statement)

Answer 4

shows revenue, expenses over a specific period to asses financial health over specific period

Revenue
-costs
-operating expenses eg wages
=EBIT (earning before interest and tax)
-tax
=net profit

*eg profits test x3 annual
Corporation tax 25% over £250k

Question 5

What is a cash flow?

Answer 5

Shows all cash in and out of a business over a set period eg monthly

helps show if a company has enough cash to satisfy the day to day, understand liquidity

Question 6

Difference between GAAP and IFRS?

Answer 6

IFRS principle based (public or large companies)

Question 7

when not audited?

Answer 7

small private limited companies exempt

companies act 2006

Question 8

when audited?

Answer 8

2 out of the 3:

Annual turnover > £10.2 million
Balance sheet total > £5.1 million
Average number of employees > 50