Accountancy: What are accounts?
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Vic Woodhouse
20A The Mall
Ealing
London
W5 2PJ
Ealing
London
W5 2PJ
- Accounts are the standard accounting framework used in all commercial accounting.
- Shows a Profit and Loss
- and Balance Sheet
- Derived from entries in a nominal ledger.
- The nominal ledger is entered in double entry from the:
- Cash book (bank entries) and
- Purchase day book (goods purchased) and
- Sales day books (sales invoice list).
See book-keeping guidance
- The nominal ledger shows details from bank accounts, sales invoices, purchases, overheads and all other business contracts and records.
- This tests the quality of your bookkeeping:
- Cash book - needs to reconcile with the bank and reflect all bank transactions.
- Goods purchased - less payments from the bank or elsewhere, need to balance with any creditor balance payable at year end.
- Sales invoices - less payments received into the bank or elsewhere, need to balance with any debtor balance receivable at year end.
- It is preferable that the cash book and purchase and sales ledgers are balanced, and agreed to your year end balances, before your records are submitted for accounts preparation.
- We will provide a bookkeeping quotation for additional work following review of your records.
- The first draft of your accounts may reveal that further work is required on your bookkeeping.
- Please talk to us about preparing both quarterly bookkeeping, VAT returns and annual accounts for a comprehensive fixed price.
- Business transactions: every business transaction:
- Changes the assets and liabilities of the business balance sheet and
- Gives rise to a profit or a loss.
- Double entry generates the relationship between Profit and Loss and Balance Sheet reports.
- Profit & Loss - is self-expalanatory; please ask us if you are unsure.
- Balance sheet - shows the assets and liabilities of your business.
- Reporting is an annual structure which may be updated monthly to produce management accounts.
- Minimise your tax liability
- The profit or loss, as shown in the annual accounts, is adjusted according to various aspects of tax law to produce the tax computation. We work within the tax law to minimise your tax liability.
- Claim your tax loss as soon as possible
- If you have made a loss, we apply various treatments, in the tax computation, in order to maximise your tax relief and claim the tax loss as soon as possible.
- Ask us about Bookkeeping, VAT returns and annual accounts for a comprehensive fixed price.
- Management accounts
- There is an interim report arising from quarterly VAT accounts. We include all detail which you give us into the quarterly VAT account to give you an approximate Profit and Loss report, management accounts, four times a year.
- Annual accounts
- At year end we produce annual accounts and tax computations and review these with you.
