2. Answer the questions:

a) Do people shake hands if they see each other regularly in Great Britain?

b) Do they shake hands in the same situation in France and America?

c) Can you put personal questions to people in the USA?

d) When do people begin using first names in America and in Russia?

e) What do you know about smoking in the States?

f) Why is it better to have a credit card in the USA?

g) How should you behave at an American restaurant?

3. Read and translate the text:

PRESENTATION OF ACCOUNTING INFORMATION

The recording and presentation of financial information is the responsibility of the accounting division headed by the finance manager. A firm’s accounting system should be able to provide the following information:

- a record of day-to-day transactions;

- a statement of how well the firm is running over a period of time;

- a summary of the firm’s financial position at a given date;

- a guide to future action and decision-making.

The first three requirements are met by specific parts of the accounting system. The day-to-day transactions are first noted in the original documents, such as the invoices, credit notes and receipts. They are then summarized in day books before being fed into the ledger where their full effect is recorded. The ledger is made up of individual accounts – one for each item under which information is required.

From the ledger, the balances of some accounts are transferred to the trading and profit and loss account, which shows the profit for the year (that is, the second requirement above).

There is no simple document which directly gives the answer to the fourth requirement. This demands an intelligent interpretation of the whole accounting system (particularly of the ratios we considered earlier in this chapter), coupled with a good understanding of such factors as economic trends, possible changes in the law, and statistics generally.

The balance sheet

Managers will be primarily concerned with two accounting documents – the balance sheet and the profit and loss account.

The balance sheet is a summary of the film’s assets, liabilities and capital as at a given date. There are a number of ways in which it can be set out. The conventional way is to list the assets on the right-hand side of the document, and the liabilities and the capital on the left. Bear in mind that assets less the liabilities will always give the capital (that is, the “capital invested” using the definitions above). This means that assets equal liabilities plus capital.

However, this old practice is changing and an increasing number of firms are showing the sides reversed. Companies normally present the data in “statement” form showing liabilities as a deduction from assets, to give the capital.

Profit and loss account

The profit and loss account (usually abbreviated to P&L) shows how the profit (or loss) was made. It covers a period, and this is reflected in the title for document. Notice the different nature of the items listed. They are descriptions of either how the money was earned, or of how the money was spent. The items do not have a continuing material existence of their own. The first part of P&L, showing the “gross” profit, is sometimes called a trading account (or trading section of the P&L).