Accounting & Procedures Flashcards

1
Q

What is IAS?

A

All companies need to use UK-adopted ‘international accounting standards’ (IAS)

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2
Q

Limited companies should do what?

A
  1. Prepare full annual accounts - balance sheet / profit & loss/directors report.
  2. file company tax return with HMRC & pay corporation tax.
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3
Q

what is a balance sheet?

A

Its a statement of financial position at that POINT IN TIME.
It shows the company total assets, any liabilities & equity.

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4
Q

what is profit & loss account?

A

This is an INCOME STATEMENT
and it shows the gross & net profit.

Total income – total expenses = profit.

done either monthly, 1/4 or yearly.

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5
Q

cashflow statement?

A

This is not a legal requirement, but will look at forecasting, looking at expenditure, sales and cash position each month.

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6
Q

What is the Articles of Association

A

Companies must have constitutions so that the three KEY STAKEHOLDERS — shareholders, directors, and the company itself — know what each party’s rights and obligations to the others are. The articles of association (often simply called ‘the articles’) will likely specify most of these rights.

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7
Q

What is bad debt?

A
  • Bad debt is money that is owed to a company which is unlikely to be paid.
  • This would be recorded as an expense.
  • Customer may refuse to pay due to Negligence, Financial crisis, Bankruptcy for example..
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