Darrel Caparino-
What is the main role of financial reporting documents?To communicate to people who need to use it.
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What are the roles for financial reporting?It tracks, analyses, and report business income. It also examines resources usage and efficiency. It reviews cash flows of the business. It reports on business performance.
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What is the importance of financial reporting to managers?It helps managers make decisions based on facts.
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What is the purpose of financial reporting?To provide insights into the integrity and credit worthiness of the business.
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What are the purposes of financial reporting?Answer vital questions. Give accurate snapshot of metrics. Provide comprehensive statistics. Reveal ability to generate profits. Based on current state of play.
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What is the ultimate purpose of financial reporting?To achieve the objectives it was set up for.
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What is the importance of financial reporting?To make informed decisions.
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What are the questions answered by financial reporting?How much money the business has? Where the money is coming from? Where the money needs to go?
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What is the importance of accuracy in financial reporting?To give clear understanding of how the business is actually doing.
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What are the questions asked to ensure that a financial report is accurate?Is there enough money to expand? Discrepancies, error or theft? Reconciliation and adjustments.
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Who has the responsibility in collection, filing, and maintenance of financial information?The administration team.
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What are the areas of financial reporting?Finance statements, stakeholder information needs, internal controls and accountability, regulatory requirements and accounting standards.
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How does areas of financial reporting ensure accuracy?They review each other’s financial information and see it from a different perspective.
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What are financial statements?It is the end result of accounting practices that provides relevant information for specific accounting period.
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What is included in financial statement?Balance sheet, income statement, cash flow statement, owner/shareholder’s equity, quarterly and annual reports, and management analytics and notes.
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Who reviews financial statements?It is reviewed and analysed internally and externally by different stakeholders.
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What is the interests of owners and shareholders to financial reporting?Strategic planning, market position, and investment decisions.
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What is the interests of investors and creditors in financial reporting?Cash position, ability to pay, growth or stagnation.
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What is the interests of management in financial reporting?Planning, decisions, resource efficiency, and performance.
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What is the interests of suppliers in financial reporting?Financial stability, ability to pay, potential for growth.
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What is the interests of customers in financial reporting?Products and services, reliability, and ethics.
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What is the interests of the general public in financial reporting?Local job opportunities, infrastractures, and environments.
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What is the interests of government in financial reporting?employment levels, tax collection, and national insurance.
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What are internal controls?It is the processes and records that ensures accuracy of financial reporting.
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What is the main purpose of internal controls?it ensures accuracy and reliability in the preparation of financial statements.
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What does internal controls help with?It minimises risks, prevent and recognise fraud, protect business assets, ensure accuracy of records, promote efficient use of resources, and adhere to laws, regulations, policies, and standards.
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What does internal controls aim to prevent through regular audits?Errors and misstatements.
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What is the used of management accountability in financial reporting?To establish and maintain internal control to make sure rules and policies are followed.
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What is the management accountable of?Initiate transactions, record exchanges, process actions, report results, maintaining accurate records.
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What regulatory body for the accounting, auditing, and actuarial professions?FRC or Financial Reporting Council.
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What are the values of FRC?Independent, fair, effective, and influential.
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What are accounting standards?It is the principles and rules for financial reports. It determines the type and amounts of information needed.
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What are the accounting standards?Comparable information across industries, all companies follow the same reporting rules, ensures credibility and consistency for economic decisions.
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What is the purpose of accounting standards?To promote transparency and integrity in financial reporting.
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What are the types of financial reports?Balance sheet, profit and loss account, cash flow statement, management account, year-end reporting.
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Are financial reports compiled?Yes.
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Which type of companies are required additional financial reporting by HMRC and Companies House?Limited companies.
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What is included in management accounts?Planning, budgeting, risk management, company investments, and KPIs
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What is the purpose of management accounts?To provide insights on performance is senior management viewpoint.
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What is a year end report?It details out the business activities of the accounting period.
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What is included in year-end reports?Financial information, company performance, and KPIs.
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What is does year end reporting for limited companies involve?Tax return for HMRC and statutory accounts for Companies House.
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What does income statements calculate?Total sales revenue or income, expenses, gross profit, and net profit.
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What is profit margin?It is the ratio that measures the degree to which a business is actually making money. It represents the percentage of the company that gets to be kept as profit.
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What profit margin is considered low?5%
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What profit margin is considered average?10%
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What profit margin is considered good?20%
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What profit margin is considered healthy?50-70%
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What is the formula for gross profit margin?(Gross profit / revenue) x 100
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Whatis net profit margin?Percentage of net income to the business form sales.
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What is the formula for net profit margin?Net profit / revenue x 100
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What is break-even point?No loss or profit.
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What is the formula for BE in units?Fixed costs / (Sales price per unit – Variable cost per unit)
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What is the formula for BE in sales value?Selling price x fixed costs / (contribution margin)
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What is the formula for contribution margin?Sales price per unit – variable cost per unit
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What are the two ways to generate financial reports?In house spreadsheets and databases and commercial software.
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How are financial reports prepared?Transactions are recorded, post to ledger account, prepare to trial balance, journal and post adjustments, and prepare financial statements.
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What does software financial reporting do?automatically collects financial data, accurately tracks trends and metrics, forecasts impacts on business goals, reduces expenses in budgets and planning, and forecasts profitability of any business strategy.
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What is the advantage of software-based accounting?Saves time and increases accuracy.
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What does HMRC require every VAT registered organisations?Submit quarterly returns.
