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Accounting > Accounting > Flashcards

Accounting Flashcards

1
Q

What is a balance sheet

A

A snap shot of everything a company owes, owns or is owed at a single point in time.

Sheet includes a companies total assets and liabilities

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2
Q

What is a profit and loss statement

A

A companies income and expenditure made that year

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3
Q

What is a cash flow statement

A

The incoming and outgoing of money from a company’s accounts at specific point in time

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4
Q

Name the 3 main forms of company accounts

A

Cash flow, balance sheet, profit and loss

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5
Q

How long do you need PI run off cover for

A

6 years however can run up to 15 years. Special advise must be sought

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6
Q

Minimum cover for a claim

A

£1,000,000 for firms earning over £200,000

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7
Q

Does PI cover apply to everyone

A

Not needed for those providing internal services

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8
Q

What did the Companies Act make mandatory for all companies

A

Requires quoted companies to publish annual accounts

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9
Q

What are the two types of published account

A

Management account for internal use

Financial accounts for external publishing and must be audited

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10
Q

What is the VOA policy on indemnity insurance

A

HMRC will cover any claim against the VO

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11
Q

Does PI cover oral advice

A

No

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12
Q

What was the main change to the 5th Anti Money Laundering Directive

A

Customer Due Diligence checks must be undertaken when a property is let for more than a month, over a sum of 10,000 euros and must be conducted on the lessor and lessee

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13
Q

What is EBITDA?

A

Earnings Before Interest, Taxes, Depreciation, and Amortization

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14
Q

How long must private companies keep their accounting records and how long must public companies keep their accounting records?

A

3 years for private and 6 years for public

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15
Q

Name different types of taxation in the UK

A
  • VAT
  • CGT
  • IHT
  • SDLT
  • Income Tax
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16
Q

What is VAT?

A

Value Added Tax, is levied on the sale of goods and services in the UK. Currently 20%.

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17
Q

What is the current interest rate

A

0.1%

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18
Q

What is the difference between a progressive and a regressive tax?

A
  • A regressive tax levies the same percentage on products or goods purchased regardless of the buyer’s income
  • Tax rate increases as the taxable amount increases
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19
Q

Which section of the Red Book Valuation for the purpose of financial reporting (i.e. for inclusion in financial statements)

A

VPGA 1 Valuation for financial reporting

20
Q

What standards must valuation for financial reporting comply with?

A

International Financial Reporting Standards

21
Q

What can negligence be claimed under

A

Tort

22
Q

When claiming for negligence what is the ‘bracket’

A

The range in which a Valuer would find reasonable when valuing a property any advice given outside this bracket could be found to be negligent

23
Q

Who can bring a contract claim

A

A party of the contract

24
Q

When can a third party bring a claim of negligence

A

Where the Valuer has agreed that their figure can be relied on

25
Q

What does damages try to achieve

A

To return the claimant back to the position they were previously in

26
Q

When can a claim of negligence be made

A

Claims can be made 6 years after the incident or 3 years after it was known. However subject to a long stop period of 15 years from the act.

27
Q

What must a surveyor do if a complaint was made for large amounts of damages that have been incurred

A

Notify insurers as to the potential claim

28
Q

Name 3 things you would find in a balance sheet

A 
Current Assets (income, cash in bank)
Fixed assets (property)
Liabilities (whats owed)
29
Q

What are the financial statements that all companies must provide?

A

Balance sheet, profit and loss account and a cash flow statement

30
Q

When may you use company accounts in your workplace

A

To assess the financial strength of potential contractors

31
Q

What is an asset

A

Something which holds value that a company owns

32
Q

What is a liability

A

Something which a company owes to its creditors

33
Q

What is equity

A

The retained earnings of a company

Total assests - Total liabilities= equity

34
Q

What is a cash flow statement?

A

A cash flow statement shows the amount of cash and cash equivalent entering and leaving a company

35
Q

What is the benefit of a cash flow statement?

A

Cash flow statement helps to show the level of available liquid funds available to a company

36
Q

When might you use cash flow in a valuation context

A

Calculation of finance for a development appraisal. Helps to accurately plot the expenditure likely incurred and at what phases during the project and therefore reflecting the interest to be charged.

37
Q

What items might you find on a profit and loss statement

A

Sales, salary, taxes paid, rent due, service charges, maintenance fees

38
Q

How long must a practitioner hold PII cover after retiring

A

6 years minimum with the potential of 15 years depending on the nature of work

39
Q

What minimum level of PII cover must a firm earning under £100,000

A

£250,000

40
Q

What minimum level of PII cover must a firm earning £100,001 - £200,000 have

A

£500,000

41
Q

What minimum level of PII cover must a firm earning £200,001 have

A

£1,000,000

42
Q

What level of cover must individuals have for run off period?

A

£1,000,000

43
Q

What are the 2 financial reporting standards?

A

GAAP and IFRS

44
Q

What is the difference between a debtor and creditor

A

Debtor is someone who owes your company money and a creditor is someone you owe money to

45
Q

What is a financial statement

A

Forecast of income and expenditure that can be used as an analytics toll for a companies financial health

46
Q

What are signs of insolvency in a company?

A

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Accounting (1 decks)

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