UK Year End Accounts - Limited Companies


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Hi There,

I am currently one year into my experience of working in accounting and I am on my professional papers with ACCA. So I have some idea of the basics in accounting though still have a lot of unknowns... So please excuse my ignorance for possibly what is a simple question.

I have been currently tasked with my first year end accounts and re-viewing the balances. I was just wanting to ask a question out to you guys and try and get some guidance on the direction of what I should be doing. I understand that the Trial balance is a good place to start, looking over the balances and them being debits & Credits. As well as tax provisions and any prepayments of such things as insurance.

I was hoping someone would be able to outline some sort of checklist of how they would start their project and how they get to the point of filing it with HMRC.

Please be Kind :) I hope you're all well! And any tips, notes or links will be much greatly appreciated!

Thanks again!
 
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Werner Reisacher

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Prior to releasing the financial statements of a company, the accountant should make a line by line audit of the Balance Sheet positions. In the case of Cash balances, he must compare the actual book value of each account with the corresponding records such as cash book, bank statements etc. If there is a difference, a reconciliation must be made to confirm the validity of the Balance Sheet position. Same applies to Accounts receivables, inventories, Fixed Assets etc. Since all book entries are made based on documents that are summarized in either accounts receivable accounts, fixed assets records, or any other type of detailed summary records, each position in the Balance sheet can be verified.
Same principle applies to the liability accounts. Do the Balance Sheet positions reconcile with the detailed records. Can each position be justified? Are outstanding loans in line with the bank statements or, in case of funds lent to the company by an owner in agreement with his understanding of how much the company owes him.
Once all existing positions are reconciled, investigate whether anybody is aware of existing potential liabilities that the company might face in the near future or any pending court filings that they are aware of. And finally, compare the current period balances with prior periods and assess whether the differences between the two periods make sense.
And of course, the bottom line of the Profit and Loss Statement must tie in with the earnings current year in the Balance Sheet's equity account.
It all sounds much more complicated and time consuming than it actually is. Once you got used to the process and have built up your system, a balance sheet audit becomes a standard process in your monthly closings.
 
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Prior to releasing the financial statements...
Thank you for taking your time out of your day and helping me!

You've given a great over view of what I should be looking at and going through and will be a massive aid for me!

Hope you have a great weekeend!
 

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