Accounting principles and procedures (1)

Question 1

What is a balance sheet?

Answer 1

The Company’s Balance Sheet is an accounting report that shows a company’s assets, liabilities, and shareholders’ equity. It lets you see a snapshot of your business on a given date, typically month or year-end.

Question 2

What is an profit and loss /income statement?

Answer 2

The Profit and Loss Statement or Income Statement shows a company’s income and expenses over a specific period, such as a month or year. The P&L can be used to see how your business is doing and whether it is making a profit or a loss.

Question 3

What is cashflow statement?

Answer 3

The cash flow statement is another important financial statement that shows a company’s cash inflows and outflows over a specific period. You can use this report to see how your business is doing overall and whether it has enough cash to cover its expenses.

Question 4

What is the IFRS 16?

Answer 4

It is a new standard for reporting on leases

Question 5

What are the criteria to determine whether an agreement is a lease under IFRS 16?

Answer 5

1. exclusive use
2. rent over certain level
3. lease longer than 12 montsh

Question 6

What is the role of an auditor?

Answer 6

to check that a company is complying with all standards