Financial accounting reports provide information to investors, creditors, and others who commit financial resources to a firm. The Financial Accounting Standards Board in the United States has established a broad set of financial reporting objectives to guide the financial reporting process. These objectives are summarized below.
1. Financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit and similar decisions.
2. Financial reporting should provide information to help in asserting the amounts, timing, and uncertainty of prospective cash receipts from dividends or interest from the proceeds from the sale, redemption, or maturity of securities or loans.
3. Financial reporting should provide information about the economic resources of an enterprise, the claims on those resources (obligations of the enterprise to transfer resources to other entities and owners equity), and the effects of transactions, events and claims on those resources.
4. Financial reporting should provide information about an enterprises financial performance during a period...
5. Financial reporting should provide information about how an enterprise obtains and spends cash, about its borrowing and repayment of borrowing, about its capital transactions, including cash dividends and other distributions of enterprise resources to owners.
I.
II. , . .
1.Financial accounting reports should provide information about investors and creditors.
2. The information about the financial situation is provided by the financial accounting report.
3. Financial accounting reports do not show the expenditures of enterprises.
4. A broad set of financial reporting objectives has been established in the USA.
5. Financial reporting is widely used by all developed countries.
6. Investors and creditors are supplied with useful information.
7. Creditors use financial reports of enterprises to make rational investments.
III. ,
1.Information provided by the financial reporting.
2. Major functions of financial reporting.
3. Objectives of financial reporting.
4. Information for investors and creditors.
5. Objectives of managerial reporting.
6. Obligations of the enterprises.
7. Information about how enterprises obtain and spend cash.
IV. , .
1. purchase common shares of a firm.
A. sellers;
B. borrowers;
C. investors;
2. provide information about capital transactions of a firm.
A. financial reports;
B. managerial reports;
C. statements;
3. A set of financial reporting objectives is established reporting process.
A. to perform;
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B. to guide;
C. to help;
4.To make rational the investors use information provided financial report.
A. dividends;
B. borrowing;
C. investments;
5.Investors and creditors have certain on the resources of a firm.
A. investments;
B. obligations;
C. claims;
6. Enterprises have to transfer resources to owners equity.
A. claims;
B. obligations;
C. transaction;
Enterprises obtain and spend
A. cash;
B. shares;
C. loans;
V. 䳺, .
1. Financial accounting report information to investors.
A. provide;
B. provides;
C. providing;
2. Investors and creditors financial resources to a firm.
A. commit;
B. commits;
C. committing;
3. Enterprises resources to other entities.
A. transferring;
B. transfers;
C. transfer;
4. cash enterprises should provide information about how they spends them.
A. obtained;
B. obtaining;
C. obtain.
5. The users of information in financial reports make rational investments
A. providing;
B. provided;
C. provide;
6. Financial reports help... the amount of perspective cash receipts.
A. to assert;
B. asserting;
C. asserted;
7. Affects of transactions in financial reports.
A. reflect;
B. reflected;
C. are reflected;
VI. , , .
1. Potential investors and creditorsmakes rational investments due to financial
A B C
reporting.
2. Enterprise makestransactions and is obtaining cash annually.
A B C
3. Financial reporting help its users in asserting the amount of perspective
A B C
cash receipts from dividends.
4. Ownersobtains information about enterprise resources.
A B C
5. Enterprise have obligation to repaythe borrowings
AB C
6. Enterprises financial performance are reflected in financial reports.
A B C
7. Creditors asserts the maturity of securities
A B C
Balance sheet
A balance sheet is a statement of financial position that provides information about the economic resources of a firm and the claims on those resources by creditors and owners as of a specific moment in time. It presents a listing of the firms assets, liabilities, and owners equity. In a corporation, owners are called shareholders and the owners equity is referred to as shareholders equity.
Assets are economic resources. An asset is an item that has the ability or potential to provide future services or benefits to a firm. For example, cash can be used to purchase merchandise inventory or equipment. Merchandise inventory can be sold to customers for an amount the firm hopes will be larger than was paid for it. Equipment can be used in transporting the merchandise inventory to customers.
Liabilities are creditors claims on the resources of a firm. For example, a corporation acquired merchandise inventory from its suppliers but has not yet paid for a portion of the purchases. As a result, these creditors have a claim on the assets of the company. Labor services have been provided by employees for which payment has not been made as of a given date. These employees likewise have a claim on the assets of the firm. Creditors claims, or liabilities, result from benefits previously received by a firm, and typically have a specified amount and date at which they become due.
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I. , . .
1.A balance sheet provides information about the money capital of a firm.
2. Liabilites are creditors claims on the assets of the company.
3. Liabilites have a specified amount and date at which they become due.
4. Owners are usually called shareholders.
5. Customers sell merchandize inventory to a firms.
6. Assets are natural resources.
7. Employees obtain salaries and have a claim on the assets of firm.
II. . 3 . .
1.What is a balance sheet?
A.statement;
B. information;
C. position.
2.What is creditors claim?
A. assets;
B. liabilities;
C. benefits.
3.What provides services or benefits to a firm?
A. claims;
B. purchases;
C. assets.
4.What provides information about economic resources and claims at a specific moment.
A. balance sheet;
B. financial report;
C. managerial report.
5.Who is called shareholder?
A. creditor;
B. owner;
C. employee.
6.What has the ability to provide future benefits to a firm?
A. liability;
B. assets;
C. cash.
7.What results from benefits previously received by a firm?
A. services;
B. assets;
D. liabilities.
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1.Cash can be used equipment.
A. to sell;
B. to purchase;
C. to borrow.
2.Merchandise inventory is by a firm.
A. pay;
B. send;
C. acquired
3. usually transport equipment to their customer.
A. suppliers;
B. buyers;
C. creditors.
4. for labour services should be made as of a given date.
A. payment;
B. purchase;
C. amount.
5. consist of property of all kinds.
A. liabilities;
B. inventory merchandise;
C. assets.
6. consist of money owing for loans and goods supplied to the firm.
A. purchases;
B. liabilities;
C. assets.
7. Shareholders equity is often called the
A. liabilities
B. owners equity
C. assets
V. 䳺, .
1. Employees labour services to a firm.
A. have provided;
B. have been provided;
C. has provided
2. Merchandise inventory by a corporation.
A. is acquired;
B. has acquired;
C. is acquiring.
3. Customers buy merchandise inventory.
A. can;
B. must;
C. may
4. Cash is obtained and by an enterprise.
A. spent;
B. spend
C. spended.
5. Firms sell equipment to customers for an amount larger than paid for it.
A. is;
B. was;
C. were.
6. Employees salaries for their labor services.
A. receiving
B. receives
C. receive
7. Potential investors use information on a firms profitability before to purchase its shares.
A. decide
B.decided
C.deciding.
VI. , , .
1. A company have to pay its suppliers for the purchases.
A B C
2. A firm receiving benefits as a result of beneficial transactions.
A B C
3. Payment for labour services must be pay at a given date.
A B C
4. Balance sheets are being drawn up periodically, at least annually, sometimes
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A B
half-yearly, quarterly or monthly.
C
5. Creditors claims results from benefits previously received by a firm.
A B C
6. In a corporation owners equity are called shareholders equity.
A
7. Creditors has claims on the assets of the company.
ASSETS
Shareholders` equity is the owners` claim on the assets of a firm. Unlike creditors, the owners have a residual interest. That is, owners have a claim on all assets in excess of those required to meet creditors` claim. The shareholders` equity generally comprises two parts: contributed capital and retained earnings. Contributed capital reflects the assets invested by shareholders in exchange for an ownership interest. Retained earnings represent the earnings, or profits, realized by a firm since its formation in excess of dividends distributed to shareholders. In other words, retained earnings are earnings reinvested by management for the benefit of the shareholders. Management directs the use of firms assets so that over time more assets are received than are given up in obtaining them. This increase in assets, after any claims by creditors, belongs to the firms owners. Most firms reinvest a large percentage of their earnings for growth and expansion rather than distributing all earnings as dividends.
Liabilities plus shareholders` equity are referred to as total equities or simply equities. Assets are resources of the firm. That is,
Assets = Liabilities + Shareholders` Equity.
Liabilities and Shareholders` Equity are the claims on the resources of the firm. Thus:
Resources = Claims on Resources.
In the balance sheet the resources are viewed from two viewpoints a listing of the assets under the control of the firm and a listing of the parties external to the firm who has a claim on these assets. This equality of total assets and total equities is though to be the source of the name balance sheet, since the total amount of the assets must always balance the total amount of the equities.
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1.Management reinvests earnings for the benefit of the shareholders.
2. Total equities are shareholders equity plus liabilities.
3. The total amount of assets does not always balance the total amount of the equities.
4. Most firms distribute all earnings as dividends.
5. Creditors claims result from benefits previously provided by a firm.
6. A balance sheet is a statement of financial position.
7. The shareholders equity consists of three parts.
III. . a 3 . , .
1. What are earnings?
A. resources;
B. assets;
C. income.
2. What is total equities?
A. retained earnings;
B. liabilities plus shareholders equity;
C. shareholders equity.
3. Who has a residual interest?
A. managers;
B. creditors;
C. owners.
4. How many parts does the shareholders equity comprise?
A. three;
B. four;
C. two.
5.Who directs the use of a firms assets?
A. manager;
B. management;
C. accountant.
6. What capital reflects the assets invested by shareholders in exchange for an ownership interest?
A. contributed capital;
B. retained earnings;
C. residual interest.
7. What is the source of the name balance sheet?
A. equality of total assets and total equities;
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B. equality of shareholders equity and contributed capital;
C. equality of contributed capital and retained earnings.
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1. The assets invested by shareholders are reflected by the .
A. retained earnings;
B. shareholders equity;
C. contributed capital.
2. Unlike the owners, creditors havent .
A. contributed capital;
B. residual interest;
C. creditors claims.
3. Contributed capital and retained earnings are .
A. the shareholders equity;
. all assets;
.the claims on the resources;
4. Most firms use their earning for
A. dividends;
B. expansion;
C. exchange;
5.Management reinvests earnings for the benefit of
A. owners;
B. creditors;
C. managers;
6. Liabilities are.
A. resources;
B. claims;
C. obligations;
7. Balance sheet is .
A. manufacturing report;
B. financial statement;
C. management report;
V. 䳺, .
1. Creditors the resources of firm;
A. claim;
B. claims;
C. claiming;
2. Merchandise inventory sold to customers;
A. am;
B. is;
C. are;
3. Employees claim on the assets of a firm.
A. have;
B. having;
C. has;
4. Liabilities from benefits previously received by a firm
A: resulting;
B: results
C: result;
5. The firm its earrings for growth next month;
A. reinvests;
B. will reinvest
C. reinvested
6. The use of a firms assets by its management.
. have directed
B. is directed
C. is directing
7. A part of increase in assets to the firms owners.
A. belong
B. belonging
C. belongs
IV. , , a .
1. Financial reporting is provided information that is useful to investors.
2. A major function of accounting is provider information useful for make
A B C
decisions.
3. Financial accounting is concerned with the preparation of reporting.
A B C
4. Labour services have provided by employees, who have a claim on the
A B
assets of the firm.
C
5. Liabilities consist of money for goodssupplying to the firm.
A B C
6. The accounting equation is expressed in a financial position statement
A B
calling the Balance Sheet.
C
7. Goods are sometimes sold at the same price at which they are buy.
A C
INCOME STATEMENT
The income statement provides information for assessing a firm financial performance during a period of time. This statement indicates the net income, earnings, or net profit of the company for a period of time.
The income statement presents the results of earnings activity over time and therefore reports flows. In contrasts, the balance sheet presents a statement of the firms assets and equities at a specific point in time and reports stocks.
The terms net income, earnings, and net profit are synonyms used interchangeably in corporate annual reports and through this text. Generating earnings is a primary activity of most business firms, and the income statement
is intended to provide a measure of how successful a firm was in achieving this goal for a given time span. Net income is the difference between revenues and expenses for a period.
Revenues are a measure of the inflows of assets (or reductions in liabilities) from selling goods and providing services to customers.
Expenses are a measure of the outflows of assets (or increases in liabilities) used up in generating revenues. The cost of merchandise sold (an expense) is measured by the acquisition cost of merchandise that was sold to customers. Salaries expense is the amount of cash payments or liability to make future cash payments to employees for services received in helping generate revenues during the period. Depreciation expense is a measure of the services of equipment and buildings used during a year. For each expense there is either a reduction in an asset or an increase in a liability.
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1. The income statement shows the net profit of the company.
2. The balance sheet provides information on the results of earnings activity.
3. Generating profit is a primary activity of most business firms.
4. Net income is the difference between expenses and revenues.
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5. To assess a firms financial performance, the income statement is used.
6. The terms earnings, net profit and net income are not used interchangeably.
7. The inflows of assets are measured by revenues.
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1. What kind of business firms activity is considered to be the most important?
A. selling goods;
B. providing services;
C. generating earnings;
2. For what purpose is the income statement usually prepared?
A. to assess a firms financial performance;
B. to make annual report;
C. to measure assets.
3. What does the income statement show?
A. profit;
B. earnings;
C. flows.
4. That does the balance sheet present?
A. the results of canings activity;
B. a statement of the firms assets and equities;
C. the net income.
5. What does the income statement indicate?
A. expenses;
B. liabilities;
C. net profit.
6. What does the balance sheet report?
A. flows;
B. stocks;
C. expenses.
7. What is a measure of the cut flows of assets?
A. liability;
B. revenue;
C. expense
. , :
1. The income statement helps a firms financial performance.
A. to assess;
B. to provide;
C. to perform.
2. Most business firms generate :
A. earnings;
B. expenses;
C. payments.
3. The reductions in liabilities are measured by :
A. services;
B. revenues;
C. assets.
4. The employees receive for their labor services:
A. wages;
B. salaries;
C. income.
5. The services of equipment and buildings are measured by expense.
A. depreciation;
B. advertising;
C. consumption.
6. The difference between revenues and expenses for a period is
A. gross profit;
B: taxable income;
D. net income.
7. is a legal obligation to pay a definite amount at a definite time.
A. liability;
B. debt;
C. promise.
. 䳺, .
1. Assets and liabilities as current and concurrent:
A. classify;
B. have classified;
C. are classified.
2. Accounts receivable are shown at the amount of cash from customers:
A. to expect;
B. expected;
C. expecting.
3. Assets and liabilities on a cash basis:
A. have valued;
B. value;
C. are valued.
4. Current liabilities are liabilities within a year:
A. to pay;
B. paying;
C. paid.
5. Retained earnings are earnings by a first since its formation.
A. realized;
B. realizing;
C. to realize.
6. capital reflects the assets invested by shareholders:
A. contributed;
B. contributing;
C. contribute.
7. Management the use of a firms assets:
A. direct;
B. directs;
C. directing.
Ӳ. , , .
1. The shareholders equity generally comprisetoo parts.
A B C
2. Liabilities plus shareholders equity are referred to us total equities.
A B C
3. The primary activities of most business firms is generating earnings.
A B C
4. Noncurrent assets are hold and used for several years.
A B C
5. Corporations aquire merchandise inventory from theresuppliers.
A B C
6. Creditors claims result from benefits previous received by a firm.
A B C
7. In the balance sheet the resources are view from two viewpoints.
A B C
BANKING AS A BUSINESS
The quest for profits led to the development of modern bank. If we gap into the history well be able to find the ancestors of banks the medieval goldsmiths. The goldsmiths worked and shared the precious metal. But they also undertook another function. Customers looked to the goldsmith for safe storage of their treasures. In return for the deposit of a valuable, the goldsmith would provide the customers with a warehouse receipt the promise to return the valuables to the customer on demand. They stored the valuable for a fee. At this stage the goldsmiths business was not very profitable. Its sole source of profits would be the small amount charged for safeguarding gold.
After some years of experience, the goldsmiths have noticed something interesting. Although he was committed to repay the gold of the depositors on demand, he didnt actually repay them all at once. Each week some of the depositors made withdrawals but others added to their balances. There was a flow of gold out of the warehouse but there was also an inflow. As a result of it a sizable quantity of gold remained on deposit at all times.
Since the depositors did not try to withdraw their gold simultaneously the goldsmith didnt need to have all the gold on hand. Some could be put to work earning interest.
Sooner or later the goldsmith begins to make loans. In making loans he entered the fractional reserve banking business. That is, he hold gold reserves that were only a fraction of his demand deposit liabilities. He earned interest on the loans he had made. Thus the basis for the development of banks was laid.
I. .
II. 4 . , .
1.
A. money outflow;
B. gold;
C. profits;
D. valuables.
2. Who was an ancestor of a bank?
A. an accountant;
B. a customer;
C. a depositor;
D. a goldsmith.
3. What was an item that the goldsmith had to store?
A. money;
B. precious metal;
C. a deposit;
D. loans.
4. What did the goldsmith provide his customers with?
A. a cheque;
B. a warehouse receipt;
C. interest;
D. earnings.
5. What did the goldsmith begin to do later?
A. to make loans;
B. to control the money supply;
C. to become an instrument for political manipulation of the banks;
D. to get a cheque.
6. What earned interest for the goldsmith?
A. gold;
B. loans;
C. treasure;
D. precious metal.
7. Who decided to make loans to get interest?
A. a medieval goldsmith;
B. an ancestor;
C. a book-keeper;
D. a controller.
III. , , , .
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A. making loans by the goldsmith;
B. the goldsmiths activities at the first stage of a banking business;
C. keeping money by the goldsmith;
D. the customers interest.
2 .
A. the balance of a banking business;
B. the depositors withdrawals;
C. simultaneous withdrawing of the depositors gold;
D. the depositors earn interest.
3 .
A. the fractional-reserve banking business;
B. the development of banks;
C. the goldsmiths loans.
IV. ?
A. borrowing money from the banks;
B. transferring of government deposits;
C. the development of a banking business;
D. money definitions;
E. issuing paper currency.
V. , :
1. The goldsmith kept enough to pay off all depositors who wanted to make withdrawals.
A. Gold;
B. Money;
C. Goods;
D. Services.
2. They (the goldsmith) had to reduce reserves, because each additional dollar lent out meant that additional interest could be earned.
A. a loan;
B. interest;
C. a fraction;
D. an intensive.
3. The goldsmith-bankers were . on a reasonably stable flow of deposits and withdrawals.
A. counts;
B. count;
C. will count;
D. counting.
4. The banks, operating with gold reserves equal to only. Of their deposits did not have enough gold to pay off all their depositors.
A. a fraction;
B. businesses;
C. earnings;
D. demands.
5. Each depositor had a personal interest to be first in line . Back his or her gold.
A. to control;
B. to get;
C. to add;
D. to begin.
Credit system
Credit system is the sphere of financial relations of a society, which represents accumulative mechanism temporary free funds / means of payment and their use, first of all, for the growth / development of production.
Credit relations have made their appearance due to / because / several reasons. Some owners / proprietors / have got a temporary / provisional surplus of monetary means, others, quite reverse, have provisional shortage of additional means.
Credit - is a transfer sum of money at the disposal of /debtor/ borrower on the following terms.
a) credit is given for a definite period of time,
b) with compensation for use,
c) it must be repaid to a creditor.
Payment for using credit is called loan interest. The rate of interest on loans depends, first and foremost, upon supply demand situation on credit funds.
It is of great importance for the economy of a country as it allows / permits to revive a pert of public funds temporary released from turnover. There means, as a rule, are directed to the expansion and growth of production and also are being used for the extension of consumer demand (consumer credit)
Credit can be directed from a creditor / lender / to a borrower. Developed credit system is characterized by availability of credit transactions / business deals made by credit institutions (banks and other establishments, which borrow and lend money). Banks are of primary importance.
There exists a great variety of types of credit, such as: long-termcredit and short-term credit; government / public credit / and private; international lending; commercial credit; bank credit; consumer credit;mortgage credit. Such range of credit still exists because of some reasons: a) who acts as a creditor and a borrower; b) what is the purpose of a credit and what are its terms?
Credit system has acquired the status of international which is accounted for close economic relations and interaction of states.
International credit institutions are as follows:
IMF International Monetary Fond;
IBRD International Bank for Reconstruction and Development
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2. , .
3. .
4. , , .
5. , .
6. .
7. , , ; , , .
8. , .
9. , .
12. SYSTEM OF TAXES/TAXATION
Fiscal system is a branch of societys financial relations which represents redistribution mechanism of national income share through government/state budget.
Why does a society pay taxes? It so because it has the so-called public organizational arrangement / form of management. A state needs money/monetary means/financial resources to execute its functions. Substantial portion of these funds/assets is obtained by a state through taxes.
The more is the public sector in the economy and government grants the most must be public revenues and thus the tax burden is severer.
Taxes are different. 1. Income tax is paid as a part of total revenue by all enterprises, institutions and establishments (legal counsels) and private persons. 2. There are some specific taxes, such as: personal property tax and capital tax/levy (on possession/holding of property or receiving legacy/heritage, under property realization). 3. There still exist taxes on consumption, for example, VAT- value-added tax or excise duty on tobacco and spirits. Such duties are called indirect taxes as they are stipulated by/laid in prices for goods and we pay them purchasing these goods. 4. Surtax on wages is in the form of social payments/contributions to pay pensions and medical insurance benefits. 5. Marginal tax is charged /collected from income increment (growth, increase, gain). Tax under which increase of tax rates is simultaneous to the extension in possibilities to pay is called progressive tax. The taxes under which tax rates are equal or the same for everyone are called proportional/proportionate. The greater part of national production and services is sponsored (backed) at the expense of/(at the cost of) taxes. These funds/assets are less or more equally distributed among citizens in the sphere of education, health service, pastoral care and etc.
All mentioned/outlined above common features characterize fiscal system. Each state both defines and legislatively registers its system of taxation is quite peculiar.
The Ukrainian fiscal system is in the state of formation at present. The latest Decree on taxation/tax assessment has introduced essential alterations/changes into the present system:
1. All enterprises irrespective of the form of property are taxed in compliance with the single system.
2. Common tax rate on profits has been determined/fixed 30%.
3. Some considerable changes have been brought into existing system of tax exemptions/privileges. They are reduced.
4. New one, minimum, non-taxable threshold of 4,6 thousand coupons for individual tax payers was introduced.
5. The system of declaration of citizens revenues is supposed to be extended.
System of taxes will still be developing and changing together with the economy of our country.
I. .
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1. ' , .
2. ( ) , , , , , , .
3. .
4. , .
5. .
6. . , , ( ).
7. .
