Financial Accounting System At Chic Paints Ltd
5.6 As a limited company, one of the purposes of Chic Paints Ltd’s accounts function is to satisfy the requirements set out by “Financial Reporting Council”. By law Chic Paints Ltd must produce a set of financial statements annually for submission to Companies House. These statements are as …show more content…
The Statement of Financial Position will give Chic Paints Ltd a snap shot of the company’s current financial position and help show the liquidity. The bank would use the Statement of Financial Position as part of the decision making process in allowing Chic Paints Ltd to have an overdraft.
5.9 The Statement of Cash Flow – The Statement of Cash Flow is produced to illustrate the amount of cash and cash equivalents entering and leaving Chic Paints Ltd. The Statement of Cash Flow is designed to complement the Statement of Financial Position and the Statement of Profit or Loss to view and understand how Chic Paints Ltd operations are running. The Statement of Cash Flow helps the company’s director and management to see the liquidity position of Chic Paints and how cash has been used.
5.10 The above accounts are produced in line with the UK financial standards set out in “UK Generally Accepted Accounting Principal” or international standards “International Financial Reporting Standards” and must comply with the rules stated in the Companies Act