Frequently Asked Questions

Accruals in accounting are expenses and revenues that are recorded when they are incurred, not when cash is exchanged.

Management accounting involves preparing financial reports and analyses to help managers make informed business decisions.

Goodwill in accounting is an intangible asset that represents the value of a company’s brand name, customer relationships, and other non-physical assets.

Accounting Standards Codification is a system that organizes U.S. Generally Accepted Accounting Principles (GAAP) into a consistent structure.

Equity in accounting represents the owner’s residual interest in the assets of a company after deducting liabilities.

Provision accounting involves setting aside an amount in the accounts to cover a future liability or decrease in asset value.

IFRS accounting standards are International Financial Reporting Standards that provide guidelines for financial reporting to ensure transparency and consistency.

Capital accounting deals with accounting for a company’s capital assets and investments, including tracking and managing them.

A creditor in accounting is an entity or person that a company owes money to for goods or services provided.

Accounts payable in accounting is the amount a company owes to suppliers for items or services purchased on credit.

Assurance in accounting refers to the services provided by accountants to improve the quality or context of information for decision-makers.

Cash accounting is a method where revenues and expenses are recorded when they are actually received or paid.

Reconciliation in accounting is the process of ensuring that two sets of records (usually the balances of two accounts) are in agreement.

Generally, you should keep accounting records for at least six years, as required by HMRC.

An accounting provision is an amount set aside in the financial statements to cover a future liability or decrease in asset value.

Auditing in accounting is the examination of financial records and statements to ensure accuracy and compliance with regulations.

AAT accounting refers to the qualifications and standards set by the Association of Accounting Technicians, a UK professional body.

Bookkeeping in accounting involves recording daily financial transactions, such as sales, purchases, and receipts.

Postponed VAT accounting allows businesses to account for import VAT on their VAT Return instead of paying it at the border.

The cash method of accounting records revenues and expenses when cash is actually received or paid, rather than when they are incurred.

Authentication, authorization, and accounting (AAA) are processes used in network security to control access and track user activities.

A capital reserve in accounting is a fund set aside for long-term investments or unexpected expenses, not typically used for regular business operations.

Bookkeeping is the process of recording financial transactions and maintaining financial records for a business.

Bookkeeping is the recording of financial transactions, while accounting involves interpreting, classifying, and summarizing financial data.

You can find your business registration number on the certificate of incorporation or by checking with the Companies House.

You get a business registration number by registering your company with the Companies House in the UK.

Tax returns are typically due by 31 January for online submissions and by 31 October for paper submissions following the end of the tax year on 5 April.

Tax returns are forms submitted to HMRC that report income, expenses, and other pertinent tax information for individuals or businesses.

Tax returns are completed by gathering financial records, filling out the appropriate forms, and submitting them to HMRC, either online or by paper.

To do tax returns, collect all relevant financial information, complete the tax return forms accurately, and submit them to HMRC by the deadline.

You get your tax return forms at the end of the tax year, and you must complete and submit them by the given deadline.

The cost varies based on complexity, but accountants typically charge anywhere from £100 to £1,000 for tax return services.

You can view previous tax returns by logging into your HMRC online account and accessing your past submissions.

The cost varies but can range from £50 to £200 per month, depending on the number of employees and the complexity of the payroll.

VAT returns are submitted online through your HMRC account, where you enter your VAT information and calculations before submitting.

A VAT return is a form submitted to HMRC that shows the amount of VAT a business has paid and collected over a specific period.

VAT returns are usually due quarterly, one month and seven days after the end of your VAT accounting period.

HMRC investigations can be triggered by discrepancies in tax returns, unusual deductions, or random selection.

HMRC can go back up to 20 years in cases of deliberate tax avoidance, but typically they look back 4-6 years.

The length of an HMRC investigation can vary, typically ranging from a few months to over a year, depending on the complexity of the case.

To avoid HMRC investigation, ensure accurate and honest tax reporting, keep thorough records, and comply with all tax regulations.

Deal with an HMRC investigation by cooperating fully, providing all requested information promptly, and seeking professional advice if needed.

A payroll number is a unique identifier assigned to an employee for payroll processing purposes.

You can find your payroll number on your payslip, through your employer, or by checking your payroll documentation.