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Файл:Английский язык для бухгалтеров. Учебное пособие
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The double-entry system has an account (meaning details of transactions in that item) for every asset, every liability and for capital. The ac-
count is the basic storage of all financial information. Similar transactions
are recorded and stored in the one account, e.g. the premises account (for
transactions in premises), fixtures and fittings account (for transactions in
fixtures and fittings), stock account, bank account, cash account, capital
account, etc.
Each account should be shown on a separate page. The double-entry
system divides each page into two halves. The left-hand side is called the
debit side, while the right-hand side is called the credit side. The terms “debit” (abbreviated Dr., from the Latin “debere”) and “credit” (abbreviated
Cr., from the Latin “credere”) are simply the accountant’s words for “left”
and “right” (not for “increase” or “decrease”).
Double-entry rules for accounts are:
Assets = Liabilities and Capital
To increase
each item Debit Credit Credit
To decrease
each item Credit Debit Debit
The double-entry rules for liabilities and capital are the same, but they
are exactly the opposite as those for assets. This is because assets are on the
opposite side of the equation and therefore follow opposite rules.
Looking at the accounts the rule will appear as:
Any asset account Any Liability account Capital account
Increases Decreases Decreases Increases Decreases Increases
+ – – + – +
For example, 1. The proprietor starts the firm with £1,000 in cash on
1 August 19-6.
Effect Action
a) Increases the asset of cash in the firm Debit the cash account
b) Increases the capital Credit the capital account
These are entered:
Cash
19-6 £
Aug 1 1,000
Capital
19-6 £
Aug 1 1,000
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2. A motor van is bought for £275 cash on 2 August 19-6.
Effect Action
a) Decreases the asset of cash Credit the cash account
b) Increases the asset of motor van Debit the motor van account
Cash
19-6 £
Aug 2 Motor Van 275
Motor Van
19-6 £
Aug 2 Cash 275
3. Fixtures bought on credit from Shop Fitters £ 115 on 3 August 19-6.
Effect Action
a) Increase in the asset of fixtures Debit the cash account
b) Increase in the liability of the firm Credit Shop Fitters account
to Shop Fitters
Fixtures
19-6 £
Aug 2 Shop Fitters 115
Shop Fitters
19-6 £
Aug 3 Fixtures 115
The most important principle of double-entry book-keeping:
Every transaction involves a debit entry in one account and a cor-
responding credit entry in another account.
After any number of transactions the total value of the debit balances
should still equal the total value of the credit balances. Checking that the
debit balances do in fact equal the credit balances is done by making a list
of all balances. This is known as a trial balance.
E
The trial balance is not part of the double entry process but is a useful
means of summarizing the balances on all of a firm’s accounts and of ensuring that the double entry process has properly worked. It does so by simple
listing all debit and credit balances in all accounts and summing each list.
Since ‘for every debit there must be a credit’, it follows that the sum of all
debit balances must equal the sum of all credit balances. If the two totals do
not agree, an error must have been made somewhere. It usually takes the
following form.
52
B Swift
Trial balance as on 31 December 2006
Debit Credit
Bank £1,244
Capital 4,800
Loans 2,000
Vehicles 1,800
Equipment 2,200
Materials 1,364
Rent 150
Insurance 360
Stationary 70
Sales 2,753
Delivery charges 16
Office equipment 416
Drawings 100
Wages 240
Travel costs 25
Debtors 1,568
£ 9,553 9,553
READING FOR SPECIFIC INFORMATION
1. Scan the text and write the letter of the section where you can
find the following information. Do it as quickly as possible:
___ means of summarising the balances
___ circulating assets
___ the meanings of the words ‘debit’ and ‘credit’
___ the definitions of capital and liabilities
___ a financial position statement
___ the most important principles of double-entry book-keeping
___ double-entry rules for accounts
___ fixed assets
___ current liabilities
___ two perspectives on resources
___ accounting equation
___ long-term liabilities
___ the main book for recording transaction
___ the reason for disagreement of credit and debit total
53
READING FOR DETAILS AND LANGUAGE STUDY:
1. Asset
a) A resource controlled by the ente
r
prise as a result of
SECTIONS A AND B
1. Check you understand the detailed questions below and answer
them.
1. What is the whole of financial accounting based on?
2. How can the accounting equation be expressed?
3. Why will the two sides of the equation have the same totals?
4. What do assets consist of?
5. What are the two kinds of assets?
6. What do liabilities consist of?
7. What kinds of liabilities are there?
8. What is capital?
9. Why is the balance sheet sometimes called the statement of finan-
cial position?
2. Match a line in A with a line in B to define the terms:
A B
2. Fixed
Assets
3. Current
Assets
4. Liability
5. Current
Liabilities
6. Long-term
Liabilities
7. Capital
8. Financial
statements
9. Balance
sheet
54
past events and from which future economic benefits are
expected to flow to the enterprise.
b) A present obligation of the enterprise arising from
events, the settlement of which is expected to result in an
outflow from the enterprise of resources embodying economic benefits.
c) Assets owned by an enterprise for long term use in its
activities rather than for resale.
d) Liabilities which are expected to be repaid within the
short term, which is normally regarded as being within
twelve months of the date of the accounts.
e) Assets which are held by an enterprise for the short
term and are expected to be converted into cash within
that term, normally regarded as being within twelve
months of the date of the accounts. They are sometimes
referred to as circulating assets.
f) A statement of an enterprise’s assets, liabilities and
equity at a particular date.
g) Owner’s equity or net worth.
h) Liabilities which are not expected to be repaid during
the current year.
i) A term used to describe things which are attached to
premises, and articles of furniture etc. Which did not form
part of the original building.
10. Goodwill
j) The value of the commercial advantages that an ente
r-
11. Fixtures
and Fittings
prise enjoys because of its prior existence. It reflects such
things as the enterprise’s particular expertises and trade
reputation.
k) The means by which accountants communicate the
financial condition and activities of a business to those
who have an interest in the business.
3. Complete the following statement with the words given below.
A
Once, 1) _______ as a good method of determining whether or not a
company was making profits and whether or not it owed any taxes.
2) ______ could keep their own records and make business decisions based
on the information found there. Nowadays, a more sophisticated 3) ______
is needed. The design, maintenance, and interpretation of the information
4) _______ is referred so as accounting. Accountants use the information in
accounts to construct 5) _______ .
a) in recorded accounts; b) system of accounting; c) small business
owners; d) financial statements; e) bookkeeping served
B
Any transaction causes at least 1) _______ changes within the balance
sheet. As a result of these changes the total value of the 2) __________ will
still equal the value of 3) ___________ of 4) ___________ .
a) two; b) finance; c) sources; d) assets
4. Find the words or phrases which mean the same as a-h and use
them in the sentences below:
a) the amount you get when you add several numbers or things together;
b) someone who owns a business;
c) a legal agreement in which you borrow money from a bank in order to buy a house;
d) to prepare and write something such as a document or plan;
e) the buildings and land that a business or organization uses;
f) the total amount of money and goods that a company owns that
shows how much it is worth; the total amount of something that is available
for people to use;
g) the action or process of buying or selling something;
h) using or taking a long time to do.
1. The sale of goods is the most common form of commercial _____ .
2. The charity is hoping to move to new ___________ next year.
3. Her score was higher than the combined _______ of her closest
opponents.
55
4. Do you have a __________ on your house?
средства, собственный
5. Recording all transactions can be a very ____________ job.
6. Guidelines have been ________ for dealing with emergencies.
7. I’ve written a complaint to the ____________ of a hotel.
8. Much of the city's housing ______ is of very poor quality.
5. What prepositions are used with the following verbs in the
text? Give the whole sentence as an example:
1) to be based _______
2) to supply something ______ someone/something
3) to deal _______
4) to enter _____
5) to consist ______ something
6) to look ______ something
7) to derive ____
8) to pay _____ cheque
9) to purchase ______ credit
6. Match the words which are very close in their meaning.
1) liabilities
2) to hold true
3) proprietor
4) enough
5) total
6) to possess
7) permanent
8) value
9) loan
10) to repay
a) to be true or to remain true
b) indebtedness
c) to have
d) sufficient
e) to pay back
f) amount
g) borrowed money
h) worth
i) constant, durable
j) owner
7. Find English equivalents of the following Russian word combi-
nations:
1) бухгалтерская сбалансированность
2) собственные
капитал
3) стоимость имущества за вычетом обя-
зательств, чистый капитал
4) оборотные средства
5) основные средства
6) краткосрочные обязательства
7) долгосрочные обязательства
8) балансовый отчет
56
a) balance sheet
b) net worth
c) fixed assets
d) current liabilities
e) accounting equation
f) circulating assets
g) long-term liabilities
h) owner’s equity
8. Multiple-choice questions:
1. Which of the following statement is incorrect?
a) Assets – Capital = Liabilities
b) Liabilities + Capital = Assets
c) Liabilities + Assets = Capital
d) Assets – Liabilities = Capital
2. Which of the following is not an asset?
a) Buildings
b) Cash balance
c) Debtors
d) Loan from K. Harris
3. Which of the following is a liability?
a) Machinery
b) Creditors for goods
c) Motor Vehicles
d) Cash at Bank
4. Which of the following is incorrect?
Assets Liabilities Capital
£ £ £
a) 7,850 1,250 6,600
b) 8,200 2,800 5,400
c) 9,550 1,150 8,200
d) 6,540 1,120 5,420
6) Given the following, what is the amount of Capital?
Assets: Premises £20,000, Stock £8,500, Cash £100.
Liabilities: Creditors £3,000, Loan from A. Adams £4,000
a) £21,100
b) £21,600
c) £32,400
d) None of the above
57
9. The word “balance” has different meanings in different con-
texts. As a noun it can denote:
a) ability to stay upright;
b) correct relationship;
c) the amount of money you have in your bank account;
d) the majority of information, opinions, or facts;
e) the amount of something that remains after part has been used;
f) mental or emotional calm.
Read the sentences and define the meanings of the noun “balance”
in them.
1. She quickly recovered her balance after the outburst.
2. The balance of public opinion was against the proposal.
3. You pay a deposit now and the balance in 12 months.
4. You can use the balance of the time to finish the assignment.
5. She grabbed at him to keep her balance.
6. The current balance in your account is pound1,182.
7. It can be hard to find the right balance between advising your chil-
dren and controlling them.
10. As a verb it can denote:
a) to be steady in a position where it is possible to fall;
b) to create or preserve a good or correct balance between different
features or aspects;
c) to reduce the effect, strength, or amount of something, and as a result make it better;
d) to do calculations to check or show that you have not spent more
money than you have received.
Read the sentences and define the meanings of the verb“balance”
in them:
1. We have to balance the needs and tastes of all our customers.
2. Jean went out, the tray balancing in one hand.
3. There is a need to balance the demands of the workplace with
those of family life.
4. Development has to be balanced against environmental concerns.
5. The dark colours are balanced by the brightness of the walls.
6. Don't worry – it'll all balance out in the end.
7. The accounts don't balance.
8. Accountants have to balance the budget. (ликвидировать дефи-
цит бюджета)
9. We must balance income with expenditure.
10. I hope that the figures for income and costs balance out.
58
11. The following phrases are used with the word “balance”.
Read, translate and remember them.
strike a balance = achieve a good balance
We want the classes to be both enjoyable and useful – we're trying to
strike the right balance.
redress the balance = return to a good balance
The subject has received too little attention, but Prof. Brown's new
book will help to redress the balance.
shift the balance
The balance has shifted in favour of the president.
be/hang in the balance = if something is in the balance, you do
not know whether it will succeed or fail
Jack's career is hanging in the balance while they consider what to do.
off balance = not steady or upright, for example because more
weight is on one side
That wheel is off balance.
on balance = after considering all the relevant facts
On balance, I think we made the right decision.
ACTIVITIES
1. To make sure you understand the accounting equation complete the table below by filling in the missing figure for each of the four
separate businesses.
Business Capital Liabilities Assets
a)
b)
c)
d)
£
10,000
12,000
£
5,000
16,000
60,000
£
30,000
37,000
50,000
2. Moors Ltd. is a motor vehicle distributor operating from premises in Canterbury which has the following assets and liabilities. Identity which of them are current assets, which are fixed assets, which are
current and which are long term liabilities.
a) a van used for the transport of spare parts and making deliveries to
customers;
b) electronic engine testing equipment;
c) spare parts held in its service department stores;
d) petrol and diesel oil;
e) amounts due from credit customers;
59
f) amounts due to suppliers;
g) a mortgage on its premises;
h) spanners, screwdrivers and socket sets.
3. The information that follows refers to the business of Peter Bright
on 31 January 1990: freehold property (полная земельная собственность)
£40,000, debts due to suppliers £2,350, stock £6,800, cash £180, bank overdraft (превышение кредита) £1,000, debts due from customers £1,900,
furniture and fittings £3,000, delivery vehicle £2,000, mortgage on property
(10 years) £5,000, loan from ABC Finance Limited (5years) £3,000.
Draft a balance sheet for Peter Bright on the date given. To complete the balance sheet, you will need to calculate one piece of information which has been left out. Refer to the book-keeping equation for help.
READING FOR DETAILS AND LANGUAGE STUDY:
SECTIONS C, D AND E
1. Check that you understand the detailed questions below and
answer them.
1. What is the ledger?
2. What accounts does the ledger contain?
3. How many sides is each page in the ledger divided into?
4. What term is used to describe the left-hand side of the page?
5. What term is used to describe the right-hand side?
6. What columns are used on the debit and credit sides?
7. What is double entry book-keeping?
8. What does the double entry book-keeping show?
9. What is an account?
10. What kinds of accounts do you know?
11. What do the words ‘debit’ and ‘credit’ mean?
12. What is the most important principle of double entry book-
keeping?
13. What is a trial balance?
2. Scan the text and find English equivalents of the following
Russian words and word combinations:
1) главная книга, гроссбух
2) том, книга
3) с отрывными листами
4) счет в главной бухгалтерской книге
5) номер страницы, колонцифра
6) система двойной записи
7) приспособления и принадлежности
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