Accounting Principles and Procedures

Question 1

What is the Primary Piece of Legislation governing companies in the UK?

Answer 1

Companies Act 2006

Question 2

What is the companies Act 2006?

Answer 2

Main piece of legislation governing company law in the UK.

Question 3

Name some components of the Companies Act 200

Answer 3

Incorporation process
Directors duties
Indirect shareholders rights

Question 4

What are some of the amendments to companies act in Jersey?

Answer 4

additional provisions to liquidation and winding up

Additional notifications for notice periods to shareholder meetings

Question 5

What tools measure a companies financial strength?

Answer 5

Profit and loss statement

Question 6

What are management accounts?

Answer 6

These contain P&L accounts and cash flow forecasts

Provides

Better info - accurate info on company activity

Better control - trends in product services

Question 7

What is a balance sheet?

Answer 7

This reports companies assets liabilities and shareholders equity at specific point in time.

Question 8

How does a cash flow statement differ from a profit and loss statement?

Answer 8

CF - inflow of cash

P&L - summarises cost and expenses

Question 9

Why is cash flow important?

Answer 9

To show if the company can pay expenses