Expenses mean outgoing money including salaries and wages, rent, traveling and entertainment expenses.
The final products of accounting are financial statements: Balance Sheet that shows financial position of a business at a definite point of time, and Income Statement (G.B. - Profit and Loss Account) that shows financial position of a business over a definite period of time: month, quarter, year.
The system of bookkeeping is based on the principle of the double entry, which means that each transaction is entered twice, as a credit in one account and as a debit in another account. If we deposit $ 100 US with a bank, for example, the bank enters a debit for the receiver and a credit for the giver. The former represents an asset to the bank, since it is a sum of money at the banks disposal, as well as a liability, since one day it will have to be repaid.
Accounting is done by accountants. Highly qualified accountants (in the USA certified public accountant - CPA, in Great Britain chartered accountant - CA) can perform audit.
Exercise 3. Answer the following questions.
1. What do we call accounting?
2. What is the aim of accounting?
3. What are the two parts of accounting process?
4. How does bookkeeping differ from accounting?
5. Into what categories are all accounts grouped?
6. What do the following groups of financial entries like assets,
liabilities, owners equity, revenues, expenses characterize?
7. What are the final products of accounting?
8. What is the main difference between the balance sheet and the income statement?
9. How is the principle of double entry applied?
10. What do we call people who perform accounting and audit?
Exercise 4. Translate into English.
; ; ; ; ; ; ; ; ; ; .
Exercise 5. Translate into Ukrainian.
Interpreting; to make correct decisions; financial data; entries grouped together; debs of a business; incoming/outgoing money; the final product; financial position of a business; each transaction is entered twice; the former; at the banks disposal.
Exercise 6. Match and learn the pairs of synonyms.
A: obligation, enter, interpret, definite, supplier, gross income
B: particular, explain, provider, post, revenue, debt.
Exercise 7. Match and learn the pairs of opposites.
A: incoming, correct, debit, receiver, assets;
B: credit, liabilities, outgoing, wrong, giver.
Exercise 8. Learn the plural form of the words of Greek and Latin origin. Translate them into Ukrainian:
datum data; analysis analyses;
medium media; basis bases;
index indices; phenomenon phenomena;
Use the correct form of the words given above in the following sentences:
1. This event was widely commented in mass . 2. Employment is one of the most important of economic activity. 3. Our group performed a thorough of the Ukrainian steel market. 4. What financial will you use in preparing income statement? 5. He has been observing these atmosphere for several years. 6. Accounting provides the for making correct decisions.
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Exercise 9. Read and translate the following pairs of words:
account-to account; post- to post; rent- to rent; record- to record;
show- to show.
Use the proper form of the word in the following sentences, translate the sentences.
1. He will you his last article on interpreting statistical data. 2. She all the expenses of the family. 3. How much does he pay for the of this house? 4. This exhibition is a real of the latest computer technology. 5. With what bank will you open your ? 6. I prefer to a flat as I intend to stay here only for several months. 7. Service industry for 65 % of the gross national product in the U.K. 8. Who is in charge of receiving in your office? 9. Which of your bookkeepers financial data into the ledger? 10. There are too many mistakes in this . We cannot publish it.
Exercise 10. On the basis of the text define the following terms:
accounting; bookkeeping; balance sheet; income statement; the principle of double entry.
Exercise 11. Complete the following sentences:
Assets is everything while liabilities is.
Revenues means money while expenses .
Owners equity is .
Exercise 12. Complete the sentences with the proper words from the list below:
interpret; to enter; position; bookkeeping; the double entry; by common characteristics
1. Accounting consists of and accounting itself. 2. In bookkeeping we apply the principle of . 3. Financial entries grouped together are called accounts. 4. How would you these financial transactions? 5. The financial of their business is very stable. 6. Havent you forgotten this transaction twice?
