Frequently Asked Accounting Questions

Accounting Question

There are many accounting questions you may have for your small business, here we have tried to answer as many as we can. Our topics include everything your business may need to get up and running right through to completing your year-end returns.

Below are a brief description and full information can be found using the links.

Bookkeeping Questions

What are fixed assets? An item that a business owns to run its business includes computers, plant, machinery, and buildings.

How do I calculate depreciation There are several different methods to calculate depreciation, including straight line and reducing balance method.

What is credit controlThe process to collect money owing from a customer

What is double entry bookkeeping?  Most organisations use double-entry bookkeeping for their accounts. For each transaction, two entries are made.

What is a purchase invoice?  It is an invoice received from your supplier.

How to create a sales invoice? Sales invoices are issued to customers; they can either be generated manually or using accounting software.

What is a trial balance? Accountants and bookkeepers use a trial balance to see a complete picture of the accounts.

How to do stock controlIf your business sells stock you will need to put procedures in place.

What is the difference between gross and net income?  We look at the profit and loss account and show the gross and net income.

Registering a Business Questions

Why Form a Limited Company A legal company is a separate legal entity, which can have some advantages.

How to register a company in the UK  A limited company is registered at Companies House.

How to register as Self-Employed To register as self-employed, you need to contact HMRC.

How to form a partnership A partnership is an agreement between 2 or more people. You may need a solicitor to draw up a contract.

How to name your business Thinking of a business name can be hard. Try to think of something unique that people will remember.

VAT Questions

How to register for VAT? VAT registration is done through HMRC, you can either apply yourself, or your accountant can do it on your behalf.

What is the UK VAT Threshold? There is a threshold that businesses must register for VAT.

What is flat rate VAT? Flat rate VAT is a fixed rate calculated on the sales of the business.

How do you get a VAT number? A VAT registration number is issued from HMRC when you apply for registration.

How do you deregister for VAT? If you no longer need to be VAT registered you can contact HMRC and request deregistration.

What are the current VAT rates? The standard VAT rate is 20%

What is Annual Accounting VAT? If you complete an annual return for VAT, payment is still required each quarter and the final fee at the end of the year will be adjusted.

What is Cash Accounting VAT? Cash Accounting is when your VAT is calculated when you received or pay cash.

Accounting Questions – General Business

What is business banking? It is best to have a separate business bank account to your personal one.

What is business insurance? Make sure you have the correct insurance in place, speak to an insurance adviser to ensure the right level of cover.

What’s a business plan? Planning your business for the next 3 – 5 years will help you know how you can grow it. It will be required if you need investment or a loan.

If you have any other accounting questions which we have not answered, try searching this site or drop us a message.

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