Accounting FAQ

Bookkeeping captures and reconciles transactions. Accounting reviews classifications, estimates, period-end adjustments and financial statements. Management reporting, tax filing and statutory audit remain separate services unless expressly included.

Facts that change the answer: transaction volume, complexity, close frequency, reporting purpose, tax status and agreed engagement scope.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Businesses need records sufficient for applicable company, tax, licensing and management obligations. The exact format, accounting standard, audit and filing requirements can differ by entity, authority and activity.

Facts that change the answer: legal form, licensing authority, Corporate Tax and VAT status, regulated activity, financial period and audit trigger.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

It is the structured list of ledger categories used to record assets, liabilities, equity, income and expenses. A useful chart reflects the business model, tax mapping and management reporting without creating unnecessary detail.

Facts that change the answer: entities, revenue streams, departments, currencies, VAT codes, related parties, fixed assets and reporting needs.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

No routine process should treat company funds as personal money. Personal expenditure paid by the company needs immediate identification, approval, current-account or remuneration analysis and correct tax treatment.

Facts that change the answer: payer, beneficiary, business purpose, receipt, approval, owner balance, payroll and Connected Person status.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Evidence normally includes an invoice, contract, receipt, bank record, approval or other document showing the legal entity, counterparty, amount, date and business purpose. One source may not be enough for complex transactions.

Facts that change the answer: transaction type, legal entity, VAT requirements, payment route, related-party status, asset ownership and retention rule.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

It is the process of completing transaction capture, reconciling balances, posting supported adjustments, reviewing exceptions and locking a reporting period. It produces a reliable trial balance and open-items list.

Facts that change the answer: data cut-off, bank feeds, AR/AP, payroll inputs, inventory, accruals, related parties and review responsibility.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

They compare ledger cash to bank statements and identify missing, duplicate, timing or unexplained items. A bank balance copied into accounts is not a reconciliation.

Facts that change the answer: all accounts and currencies, statement period, uncleared items, fees, transfers, personal spending and approval.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Customer and supplier ledgers should reconcile to the general ledger and show invoice-level ageing, credits, disputes, collections and payments. Unsupported net balances conceal working-capital and tax issues.

Facts that change the answer: invoice data, credit notes, receipts, payments, related parties, cut-off, FX and disputed amounts.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Accruals recognise costs or income in the period earned or incurred before final invoicing; prepayments defer amounts benefiting later periods. Both require a calculation, basis and reversal schedule.

Facts that change the answer: service period, contract, estimate, materiality, invoice timing, accounting framework and tax treatment.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Only through controlled approval when a material error or new evidence requires correction. Preserve the original close, explain the adjustment and assess affected reports and tax returns.

Facts that change the answer: error size, reporting users, tax impact, audit status, filing dates, evidence and change-control policy.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

A complete set can include statement of financial position, profit or loss, cash flows, changes in equity and notes under the applicable framework. Requirements depend on the entity and reporting purpose.

Facts that change the answer: accounting standard, legal form, authority, audit, tax, lender or investor requirements and materiality.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

No. A trial balance lists ledger balances before presentation, classification and disclosures. Financial statements require accounting review, adjustments and an applicable reporting framework.

Facts that change the answer: close status, reconciliations, estimates, classifications, comparative periods, disclosure requirements and review.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

It converts financial data into decision-focused views such as revenue, margin, cash, ageing, budgets and entity or segment performance. It is not automatically a statutory statement or audit opinion.

Facts that change the answer: management questions, dimensions, data quality, frequency, budget, cash model and responsibility for interpretation.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Do not assume one universal rule. Corporate Tax financial statements use prescribed standards and authority or sector rules can add requirements; smaller entities may have permitted alternatives under current decisions.

Facts that change the answer: revenue, entity type, authority, regulated status, tax period, audit and the exact reporting decision.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Profit recognises income and expenses under accounting rules; cash flow tracks money movement. Credit sales, inventory, loans, capital expenditure and owner transactions can make the two diverge materially.

Facts that change the answer: working capital, financing, asset purchases, non-cash items, owner flows, cut-off and forecast assumptions.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

The financial statements provide the starting point, followed by a documented bridge for exempt income, non-deductible costs, reliefs, losses and transfer pricing. Tax codes should not replace the accounting close.

Facts that change the answer: Tax Period, accounting framework, elections, expense evidence, related parties, Free Zone status and tax losses.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Output and input VAT control accounts should reconcile to transaction reports and filed returns, with explained timing, reverse-charge, import, adjustment and rounding differences.

Facts that change the answer: tax period, invoices, credit notes, imports, reverse charge, partial recovery, payments and filed amendments.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

No. A ledger category is only a starting signal. Deductibility depends on business purpose, evidence, capital or revenue nature, exempt-income links, statutory restrictions and related-party rules.

Facts that change the answer: recipient, purpose, invoice, benefit, ownership, accounting treatment, tax law and market value.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Use agreements, invoices, calculations, service evidence, loan terms, approvals, confirmations and reconciliations that match actual conduct. A year-end journal alone is weak evidence.

Facts that change the answer: relationship, service or financing facts, benefit, allocation, currency, interest, settlement and transfer-pricing method.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

First preserve both versions and quantify the difference. Determine whether the ledger, return or both are wrong, then use the current correction route and document the remediation.

Facts that change the answer: period, tax type, amount, cause, materiality, evidence, filing status and FTA procedure.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

No. Accounting prepares records and statements; an external audit provides independent assurance under an applicable framework. An accounting provider should not imply audit assurance unless separately authorised and appointed.

Facts that change the answer: entity audit requirement, authority, auditor eligibility, independence, financial statements and engagement terms.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Requirements can arise from company law, a licensing authority, sector regulation, Corporate Tax decisions, financing or investor agreements. They are not identical for every UAE entity.

Facts that change the answer: legal form, revenue, QFZP status, Free Zone rules, regulated activity, lender covenants and financial period.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Management remains responsible for complete information, valid transactions, approvals, safeguarding assets, estimates and acceptance of reports and filings. Outsourcing does not transfer legal accountability.

Facts that change the answer: authority matrix, source documents, bank access, estimates, deadlines, review process and engagement scope.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Prioritise bank reconciliation, payment approval, document retention, entity separation, access control, close calendar, related-party identification and review of unusual entries. Controls should be proportionate but real.

Facts that change the answer: team size, payment access, transaction risk, cash, inventory, systems, owner involvement and regulatory obligations.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.

Secure source data, define opening balances, reconcile banks and key ledgers by period, document exceptions and rebuild tax mappings before producing final reports. Avoid unsupported balancing journals.

Facts that change the answer: backlog length, systems, bank statements, invoices, prior filings, payroll, inventory, related parties and available reviewers.

Application note: Confirm the entity, authority, accounting framework, engagement scope, available records and tax registrations before deciding the required accounting treatment or deliverable.

Evidence file: For the decision file, retain the source documents, calculations, authority correspondence, approvals and accounting entries that support the position. The written explanation and actual conduct should remain consistent.