Accounting Principles & Procedures Flashcards
What is a balancing sheet?
The balance sheet is the only statement which applies to a single point in time of a business’ calendar year.
Company Balance sheet has three parts;
- Assets - what a company owns
- Liabilities - what the company owes
- Ownership equity
What’s in a companies accounts?
Balance Sheet
Notes on account
What is cash flow?
Tells you how much money is running through a company at any time
What is the difference between the assets and liabilities?
The difference between the assets and liabilities is known as equity of the company.
What is a profits and Loss Account ?
A summary of the businesses income and expenditure transactions prepared on an annual basis.
What is the definition of Sales?
Sales are defined as invoiced amounts to customers excl. VAT.
What is Directors Remuneration ?
Compensation the company gives to its directors for the services rendered
What is Corporation Tax?
The only tax stated in company accounts in corporation tax.
What is dividends?
Distribution of profits by a corporation to its shareholders.
Can you outline to me how you would prepare a SC budget?
- Examine any new leases to see if any new SC Caps
- Verify floor areas (sq ft) to guarantee the accuracy of budget allocations.
- Compute all internal fees, such as management fees, service charge accounting fees, staff costs, audit, and professional fees based on an RPI matrix scheme or a percentage of the total budget.
- Following the completion of all expenses - budget get sent to a senior colleague for approval before getting sent to the client for approval.
- Accounts will then upload the budget & generate the appropriate invoices for the tenants.
- Upon raising the charges, I promptly communicate with tenants via a comprehensive email, outlining any adjustments for the upcoming year.
What is GAAP?
Generally Accepted Accounting Principles
What is the benefit/purpose of GAAP?
To improve the clarify of the communication of financial information
Improve
clarity
communicatyion
financial information
What are the 10 principles of GAAP?
Regularity
Consistency
Sincerity
Permanence
Non-compensation
Prudence
Continuity
Periodicity
Materiality
Utmost good faith
RCSP NPCP MU
What are the core aims in RICS Service Charge in commercial Property 2018
- Improve general standards and promote best practice, uniformity, fairness and transparency in services charges in commercial property
- Ensure timely issue of budgets and year-end certificates
- Reduce the causes of disputes and to provide guidance on resolution,
- Provide guidance to solicitors, their clients (whether owners or occupiers) and managers of service charges in the negotiation, drafting, interpretation and operation of leases, in accordance with best practice.
Why IFRS replaced IAS?
-Goal was to make it easier to compare businesses around the world
- Wanted to increase transparency and trust in global reporting
