Accounting U3

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Q. What's a partnership?
A. The relationship which subsists between persons carrying on a business in common with a veiw of profit.
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Q. When and what is the partnership act?
A. 1890 states everything is split evenly unless otherwise stated.
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Q. Layout of the appropriation account?
A. Net profit after tax, Plus int on drawing, Less salaries, Less Int on cap, Residual profit split in ratio.
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Q. What are the annual accounts and reports of law?
A. Income statement, Statement of financial position, Cash flow Statement, Notes of policies etc, Directors and auditors reports.
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Q. What are the duties of directors under companys act?
A. 2006, act within their power, promote success, use care, skill and dilligence, avoid conflict, not except 'benefits', keep accounting records and report to shareholders annually.
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Q. What must accounting records show?
A. A true and fair view.
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Q. IAS1 - Presentation of final accounts?
A. Income statement, Statement of financial position, statement of changes in equity, cash flow statement and accounting policies.
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Q. Auditors report?
A. Directors duty to prepare accounts, auditors give their opinion of true and fairness
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Q. What is an unqualified audited report?
A. The financial statements are true and fair.
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Q. Qualified audited report?
A. Something is slightly wrong but it's acceptable.
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Q. Serious qualification of audited report?
A. Unable to determine or don't think accounts are true and fair.
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Q. Reconciliation of stock?
A. When a business can't take a stock check at the end of the year, must be done ASAP and backtracked.
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Q. short term sources of finance?
A. Overdraft, Loan, Factoring
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Q. Medium term sources of finance?
A. Leasing, Hire purchase, Sale and leaseback, Venture capital.
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Q. Long term sources of finance?
A. Debentures, Mortgages, Grants.
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Q. What is factoring?
A. Once a sale is made, factor pays a discounted price of invoice and collects the debt themselves.
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Q. What is leasing?
A. Bank buys asset, business hires it over its useful life and returns it at the end. Low interest rates but asset can be seized if non-payment.
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Q. What is Hire purchase?
A. Bank buys asset, business hires it over its useful life and returns it at the end or bought for tiny ammount. Low interest rates but asset can be seized if non-payment.
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Q. What's a debenture?
A. Money borrowed for fixed tim and interest. Not paid back for years and increases gearing. Interest paid over years, loan repaid all at once at the end.
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Q. Working out interest paid and corporation tax in CFS?
A. Change in years, plus what's been paid that year.
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Q. Another name for interest paid?
A. Finance costs.
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Q. Working out operating profit for CFS?
A. Change of retained earnings, plus tax paid, interest paid and divs paid.
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Q. Cash flow statement investing activities?
A. Inflows; Interest rec, Divs rec, Sale of FA. Outflows; Purchase of FA.
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Q. IAS7 - Cash flow statements?
A. Compulsory to include in final accounts.
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Q. Internal finance?
A. retained profits or selling an asset.
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Q. External finance?
A. Loan capital or Risk capital - Funds put in to own part of the business and profits.
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Q. Schedule of FA?
A. Cost - Bal b/d, Additions, Sales, Change of revalue, Bal C/d. Dep'n - Bal b/d, Less revalue, Less, sales, Charge, Bal c/d. NBV.
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Q. IAS 2 - Inventory?
A. Value at lower of cost or NRV. FIFO or AVCO. Cost = Direct + Overheads + cost to bring them to current location and condition.
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Q. IAS8 - Policies, changes in estimates and correction of errors?
A. Consistent with policies unless valid reason. Errors corrected in next accounts, opening figures changed with a note.
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Q. IAS10 - Events after balance sheet date?
A. If found before approval of BS they are changed, otherwise noted.
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Q. IAS16 - Property, plant and equiptment?
A. Use cost or revaluation consistently. Must depreciate over useful life using RBM, SLM or units of production method.
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Q. IAS18 - Revenue?
A. Revenue is turnover plus royalties and divs. Uses realisation concept.
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Q. IAS36 - Impairment?
A. Assets should be checked at each balance sheet date.Impairment is an expense in the IS.
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Q. IAS37 - Contingent assets and liabilities?
A. If likely to be paid include it but if just foreseeable, include in notes.
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Q. IAS38 - Intangible assets?
A. Only included if of economic benefit and cost can be measured. Ammortised if there's a useful life. Internal R&D goes in IS.
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Q. Accounts to be opened for adding or subtracting a partner?
A. Revaluation, Capital and Goodwill.
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Q. Accounts to be opened for dissolving a partnership?
A. Realisation, Capital, Cash/Bank.
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Other cards in this set

Card 2

Front

Q. When and what is the partnership act?

Back

A. 1890 states everything is split evenly unless otherwise stated.

Card 3

Front

Q. Layout of the appropriation account?

Back

Preview of the front of card 3

Card 4

Front

Q. What are the annual accounts and reports of law?

Back

Preview of the front of card 4

Card 5

Front

Q. What are the duties of directors under companys act?

Back

Preview of the front of card 5
View more cards

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