Accounting Principles Flashcards
(14 cards)
What’s a Balance Sheet?
A balance sheet is a financial statement that shows a company’s assets, liabilities, and equity at a specific point in time.
What’s a Profit and Loss Statement?
A financial report that summarizes a company’s revenues, costs, and expenses over a specific period to show its net profit or loss.
What’s a Cash Flow Statement?
A financial report that shows the inflows and outflows of cash within a business over a specific period, highlighting how cash is generated and used.
How might you assess the financial strength of a business?
I would review their key financial statements on Companies House.
Where would you find accounting information about a company?
Companies House
What are the Generally Accepted Accounting Principles?
A set of rules used to standardise the reporting of financial statements.
How does GAAP differ with IFRS?
GAAP is a rules-based system, while IFRS is principles-based.
What is the role of an Auditor?
to independently examine and evaluate the financial statements of a company or organisation to ensure they are accurate, complete, and comply with relevant laws and accounting standards.
What legislation applies to Private Limited Companies, Public Limited Companies and LLPs?
Companies Act 2006
Summarise the general requirements of the Companies Act 2006
The Companies Act 2006 governs how UK companies are formed, managed, and dissolved, focusing on transparency, director accountability, financial reporting, and shareholder rights.
What are the dates of the UK tax year?
6th April to 5th April of the following year
How long must you keep accounting records for?
3 years for private companies and 6 years for PLCs
What are the size categories for companies for accounting purposes?
micro-entity, small, medium and large
How is a companies accounting size determined?
Turnover, balance sheet and employee numbers
