What Is Included in a Set of Accounts?
What Is Often Included in a Set of Accounts?
This can vary depending on who the accounts are being prepared for and for what purpose.
However, as a general guide, a “set of accounts” will often include the following details:
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Profit and Loss Account (Income Statement)
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Shows the company’s income, expenses, and profit or loss for the period.
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Balance Sheet (Statement of Financial Position)
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A snapshot of the company’s assets, liabilities, and equity at a specific point in time.
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Cash Flow Statement (for larger companies)
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Shows the movement of cash in and out of the business.
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Notes to the Accounts
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Additional details and explanations of the figures in the main statements (e.g., accounting policies, breakdowns of key items).
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Directors’ Report (for limited companies)
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A summary from the directors about the company’s performance, future outlook, and governance matters.
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Auditor’s Report (if audited)
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An independent opinion on whether the accounts give a true and fair view.
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OTHER THINGS TO CONSIDER
Accounts take into such factors as “materiality” which are not covered in this course as it is intended as a beginners course.
Taxable profits, for example in the UK, are usually adjusted for items such as “capital allowances” and principles such as “wholly and exclusively for the purposes of the trade”.
A basic explanation of these terms is included in this course.