Английский язык для бухгалтерского дела. English for Accounting. Учебное пособие

IV. Answer the questions on Text A

1.What are the main business documents connected with buying and selling?

2.Why is it necessary to retain a duplicate copy of the invoice?

3.How can one distinguish credit notes from invoices?

4.What does the statement show to the purchaser?

5.Is there any difference between payments made by cheque and those made in cash?

6.Why are credit notes sometimes printed in red?

V. The following documents are used to record transactions:

invoice, duplicate copy of an invoice, credit note, cheque, cheque counterfoil, receipt, copy of a receipt.

Divide them into 2 groups:

1.used by the purchaser/payer;

2.used by seller/receiver of money.

VI. Make up a Russian version of the business documents shown in the Text A.

VII. Find “ing” - forms in the text and state their functions.

GRAMMAR GUIDE

Sequence of Tenses

In English the Tenses of the verb in subordinate clause (придаточное предложение) show whether the action in the clause takes place at the same time with the action of the principal clause (главное предложение), precedes it or follows it. The Tenses in this case are dependent on the Tense of the verb in the principle clause and express simultaneousness (одновременность), priority or relative future.

Simultaneousness - the actions take place at the same time. I see that you know the lesson well.

I saw that he knew the lesson well.

You will see that she knows the lesson well.

Priority - the action in the subordinate clause precedes that in the principle clause.

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She knows that she has made a mistake. She knew that she had made a mistake. She will know that she has made a mistake

Relative future - the action in the subordinate clause follows the action in the principle clause.

I hope you will get there in time .

I hoped she would get there in time.

Note: The tense of the verb in a subordinate clause does not depend on the principal clause:

a)if the time of the action is definitely stated;

b)if a scientific fact is stated.

e. g. He said that he came to live there in 1956.

We were told that the earth revolves round the sun.

Ex. 1. Open the brackets. Use the necessary verb form. Consult the keys below in case of difficulty.

1.He felt that somebody (to watch)him.

2.I thought you (to like) him .

3.She knew she (to be) right.

4.I saw that he (to try) to explain why he had refused to cooperate.

5.I met him at the station where he (to wait) for his train.

Ex. 2. Translate into English.

1.I noticed (что она смотрит на меня)

2.Mother said (что она не знает, что делать)

3.At half past seven I finally realized (что она не придет)

4.The trouble was (что я обещала маме пойти с ней в кино)

5.He promised (что все будет сделано)

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Read Text B for the information that will help you to answer the questions preceding the text. Do the tasks given after the text.

1.What kind of information do financial statements provide?

2.What is known as trend analysis?

3.Where do large companies provide data for it?

4.What key items do their annual reports contain?

5.How could a company give a superficial appearance of growth to keep up inflation in the late 1970s?

6.What was done by the securities and Exchange Commission to correct for the distortion in trend analysis?

7.What does ratio analysis reveal?

Text B

СALCULATING TRENDS AND RATIOS

Besides revealing a good deal in themselves, finansial statements provide information that can be analyzed for further clues to the present health and future prospects of a bussiness. Information in financial statements is most often analyzed in terms and of ratios.

Trend analysis

The process of comparing financial data from year to year in order to see how they have changed is known as trend analysis. It points up shifts in the nature of the business over time and may also be used to compare the company with others in its industry or with the economy as a whole. Most large companies provide data for trend analysis in their annual reports. Their balance sheets and income statements typically show three to five years of data (making comparative statement analysis possible); changes in other key itemssuch as revenues, income, earnings per share, and dividends per share - are usually shown in tables and graphs.

In analyzing trends, it is important to ask whether the results have been distorted by changes in the value of the dollar. During the late 1970s, when the inflation rate was in double digits, every company in the United States could automatically increase its sales revenue by at least 10 percent annually without achieving any real improvement in its basic business. By simply raising prices to keep up inflation, a company could give at least a superficial appearance of growth. When inflation slowed in the 1980s ,

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many companies′ sales growth slowed as well - not because their business was bad, but because the built-in inflation kicker had diminished.

To correct for this potential distortion, in 1979 the Securities and Exchange Commission began to require the largest public companies to supplement their financial statements with footnotes showing what their historical cost would look like when adjusted for inflation. Now that inflation has abated, the accounting profession has put this sort of inflation - adjusted accounting on the back burner. Accountants may return to it, howewer, if inflation starts to rise again.

Ratio analysis

In ratio analysis, two elements from the same year’s financial figures are compared. For example, sales might be compared to assets or to income. The result of such a comparison is stated as a percentage or a ratio, which can be compared to the firm’s past ratios or to those of competitors.

Like trend analysis, ratio analysis reveals how the firm is performing relative to similar companies in its industry, but it focuses on certain key areas of current performance instead of on comparisons of perfomance over time. Every industry tends to have its own «normal» ratios, which act as a yardstick for individual firms. The average statistics for various industries, grouped by company size, are available in published sources.

Notes: 1. trend analysis - анализ тенденции развития

2.ratio analysis - анализ относительных показателей с использованием финансовых коэффициентов

3.to distort - искажать

4.digit - цифра, однозначное число

5.footnotes - примечания, сноски

6.yardstick - мерило, критерий

7.to abate - ослаблять, уменьшать

I.Find the equivalents:

1.inflation rate

2.sales revenue

3.to keep up inflation

4.to give a superficial appearance of growth

5.inflation-adjusted accounting

a.доход с продаж

b.инфляционный процент с поправкой на инфляцию

c.производить внешнее впечатление

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d. поддерживать инфляцию e. уровень инфляции

II.Match the terms (1-4) with the definitions (a-d).

1.Trend analysis

2.Ratio analysis

3.Inflation

4.Dividents

a.fixed sum of money paid out of profit as a percentage of the value of the share.

b.a rise in the general level of prices caused by an excess of demand over supply of money.

c.comparison of a company’s financial data from year to year to see how they have changed.

d.comparison of two elements from the same year’s financial results, stated as a percentage or a ratio.

III.Make up a summary of Text B.

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Translate Text C into Russian in 45 minutes in writing. Use a

dictionary. Answer the question: What is the main objective in drafting the bank reconciliation statement?

Text C

BANK RECONCILIATION STATEMENTS

If you have a current account with a bank, you may have received a statement showing a balance in the bank considerably different to what you expected it to be. Your delight or dismay (depending on the nature of the difference) at the amount shown will probably have disappeared once you sat down and worked out the reasons for the difference. If you write up a cash book yourself in order to keep a check on your spending then accounting for the difference should not be too difficult. In a big business where there have been a large number of entries to record money received and paid it may take a little longer. The principles are the same however detailed the account. Once mastered you should have no problem

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explaining or ‘reconciling ‘(the technical term) the differences between your record and that of the bank.

In reconciling the bank balance in the cash book with the balance in the bank statement, it is possible that you will uncover errors made by either yourself or the bank. This is the main object in drafting a bank reconciliation statement. Correcting such errors when they are discovered is essential.

The sooner errors are discovered, the sooner they can be corrected. This is why bank reconciliation is so important. There are three main steps:

1.Compare the cash book with the bank statement, noting any differences. It is useful to tick each entry in the cash book that is also in the statement and each entry in the statement that is also in the cash book. The entries not ticked will help to explain why the balances are different.

2.The next step is to bring the cash book up to date by entering any items which are not yet included but which are in the statement.

3.The final step is to draft a brief statement to reconcile the differences which remain.

Notes: 1. reconcilition - согласование, выверка счетов

2.to keep a check - держать под контролем

3.to tick - отмечать “галочкой”

4.to draft - составлять (план, проект, отчёт)

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UNIT VIII

Text for Study: Profit (Text A) Grammar Guide: Conditional Sentences

Supplementary Reading: What does the term “Cash Flow” mean?

(Text B);

A Company’s Income Statement and The Statement (Text C).

PRE - TEXT TASKS

I. Practise the pronunciation of the following words and word combinations from Text A.

1.incur [In'kE:] - принимать на себя (расходы), понести (убытки)

2.expenditure [Ik'spendICq] - затраты, расход

3.revenue expenditure ['revInju:] - текущие расходы

4.withdrawal [wID'drO:ql] - изъятие вклада, расход

5.requirement [rI'kwaIqmqnt] - требование

6.measure ['meZq] - мера, измерять

7.calculation [kxlkjV'leIS(q)n] - расчет, вычисления

8.acquire [q'kwaIq] - покупать, приобретать

9.immediately [I'mi:dIqtlI] - немедленно

10.it is likely - вероятно

11.make smth clear прояснить - что-либо

12.less - минус (в статьях о балансе)

II. Look through Text A and find the English equivalents to the following Russian words. Mind that their meanings are international:

проблема, интервалы, абсолютно, натура (природа), актуальный (действительный), корректировать, частный, банк, рента, финальный, негативный, практика.

III. Define what part of speech the following words belong to, translate them:

vital, importance, expences, tax, negative, annual, clear, assets, purchase, directly, transaction, slightly, customers, section, usually, assume, often, extra.

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IV. Find the equivalents

1.expenses incurred

2.at six - monthly interval

3.for one’s private use

4.carriage outwards

5.carriage inwards

6.to cause confusion

a.для личного пользования

b.расходы по отгрузке

c.расходы по завозу

d.c интервалом в полгода

e.вызывать путаницу

f.понесенные затраты

Profit is something of vital importance to all businesses.

The profit made by a business is the difference between the total income or revenue earned and the total expenses incurred during a particular period of time.

The actual period of time chosen is not a major problem. The owner may decide to see how much profit he has made in the last six months, three months, week, day or in any period that he chooses. However, in order to meet the requirments of the Inland Revenue, which assesses the tax that he has to pay on his profits, it is necessary for him to provide information on an annual basis. In fact most small businesses measure their profits at yearly or, at most, six - monthly invervals.

The calculation itself is not especially difficult - though the above definition does fail to make one thing absolutelly clear. If earnings are less than expenses, profit is negative. In practice the term ‘loss’ is more frequently used.

The main problem is not, then, one of the time period chosen nor is it the actual calculation. It lies, rather, in the need to answer the questions: what counts as expenses incurred? And what counts as income or revenue

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earned? To answer the first question correctly it is necessary to understand the distinction between capital and revenue expenditure.

Capital and revenue expenditure

Capital expenditure is expenditure on acquiring fixed assets. These are those assets which are bought to last the business a long time and which help to make profits over that period.

Revenue expenditure is the spending which relates to benefits which do not last for longer than one year. Expenditure on all items except the purchase of fixed assets can therefore be regarded as revenue expenditure. Since expenditure of this nature is direcly related to the earning of revenue it is quite correct that it should be deducted from revenue when calculating profit.

Drawings

Another transaction which occurs frequently and which must not be allowed to affect the calculation of profit is the withdrawal of any of the assets from the business by the owner for his private use. Such a withdrawal is known as ‘drawings’. The assets most usually affected are cash or bank.

The entries to record such a withdrawal are: credit the asset account and debit the capital account. The credit entry in the asset account has the effect of reducing the value of that asset while the debit entry in the capital account reduces the owner’s investment in the business by the value of the asset withdrawn.

When an owner makes fairly frequent withdrawals from the business for his private use, it is likely that an extra account will be introduced. This will be called the drawings account and it will be debited instead of the capital account. At the end of the financial year the total debit balance in this account can be transferred into the capital account.

Accounting for profit

Now we are going to break down the concept of profit into two parts: gross profit and net profit.

Gross profit is the difference between the revenue earned from sales

Net profit is the total revenue received from business operations less the total revenue expenditure incurred.

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