III. Retell the text. Accountants and balance sheets

І. Study the vocabulary:

balance sheet баланс

to create створювати

loss збиток

profit and loss statement/account підрахунок прибутку та збитку

dividend дивіденди

to reflect відображати

liabilities пасиви

capital капітал

book value балансова вартість активів

petty cash (маленька) каса

fund фонд, капітал

accounts receivable рахунки дебіторів

accounts payable рахунки кредиторів

note вексель

inventory запаси

merchandise товари

fixtures складова частина нерухомості

II. Read and translate the text.

From the Trial Balance, prepared by the bookkeeper, the accountant creates a Profit and Loss Statement and Balance Sheet.

A Profit and Loss Statement or a Profit and Loss Account shows the income or loss of the company for the period. The profit and Loss Statement is made only on the basis of those accounts of the Ledger which affect the profit and loss of the company. The Profit and Loss Statement may contain the following items:

• Sales

• Trading profit

• Depreciation

• Rent received

• Interest paid

• Profit before tax

• Tax

• Profit after tax

• Dividends

• Profit retained

• Earnings per share

The other accounts of the Ledger which reflect the assets, Liabilities and capital of the firm, make up a Balance Sheet. This shows the net worth or book value of the company.

A Balance Sheet made up for Johnson and Co., a specimen company, may appear as follows:

BALANCE SHEET

Johnson and Co.

31 December, 2005

Assets

Cash $5500

Petty cash fund 100

Accounts Receivable 100

Inventory

Merchandise on hand 2080

Furniture and Fixtures 2750

Total Assets $11280

Liabilities

Accounts payable 800

Notes payable 500

Total liabilities

Capital

Johnson Capital at 8000

Beginning

Profit for the period 1980

Total capital 9980

Total Capital and Liabilities $11280

The two sides of the balance sheet that is Total Assets and Total Capital and Liabilities are always to be equal.

Iiі. Write down the Ukrainian equivalents:

Balance depreciation profit retained

Balance sheet assets liabilities

Trading profit profit before tax the net worth

IV. Write down the English equivalents:

Отримана орендна плата _____________________________

Виплачені відсотки _________________________________

Рахунки дебіторів ___________________________________

Рахунки кредиторів _________________________________

Запаси ___________________________________________

Меблі та устаткування ______________________________

Актив _____________________________________________

Балансова вартість активів ___________________________

Пасив _____________________________________________

V. Find the answers in the text:

1. Who prepares Trial Balances?

Profit and Loss Statements?

Balance Sheets?

2. What does a Profit and Loss Statement show?

3. On what basis is it made?

4. What items does it usually have?