3.Answer the questions. Start you answer with one of the phrases: It is clear from the text…, As far as I understand…, The author says…:

1. What is an asset?

2. What is a liability?

3. What is a capital?

4. What do asset accounts include?

5. What do liabilities include?

6. What are the terms used to designate ‘capital’?

7. What are accounts maintained for?

8. What is the difference between a ledger and a journal?

4. Fill in the blanks with the missing words from the text:

1. Accounting involves _________ of transactions.

2. _________ are things of value used by the business.

3. ________ are existing debts and obligations.

4. __________ is a book in which transactions are recorded.

5. _________ is a list of detailed accounts.

6. The process of entering data into a ledger is called __________ .

5.Say whether the following is true or false. Use the phrases: It is not quite so, That’s it.

1. Anything of value that a business owns is known as a liability.

2. A separate account is kept for each asset.

3. Entries from all the journals are transferred to the ledger.

4. Journals have only one column.

5. We enter increases and decreases in the accounts in a ledger.

UNIT 5

1.Memorize the following words and word combinations:

double-entry accounting system - двойной учет, подвійна бухгалтерія,

бухгалтерський облік за методом

подвійного запису

to evolve - развиваться, розвиватися

to enable - давать возможность, надавати можливість

clear of debts - свободный от долгов, вільний від заборгованості

ownership - собственность, власність

investment - капиталовложение, інвестиція

accruing - нарастающий, наростаючий

error - погрешность, ошибка, помилка

equation - уравнение, рівняння

to balance - балансировать, балансувати

tangible - осязаемый, матеріальні активи

intangible - неосязаемый, нематеріальні активи

equity - доля в акционерном капитале предприятия, частка

в капіталі підприємства, активи

goodwill - репутація, репутація

debit - дебет, дебет

credit - кредит, кредит

to affect - влиять, впливати

total amount - общее количество, загальна кількість

2. Read and translate the text: double-entry accounting system

The double-entry accounting system — in which for every ‘ debet dare’ there is a ‘debet habere’ – has evolved to the point where it is very much like the present day system. Debet dare and debet habere are Latin terms meaning ‘should give’ and ‘should have’ respectively.

The double-entry system of bookkeeping enables a business to know at any time the value of each item that is owned, how much of this value is owed to creditors and how much belongs to the business clear of debt. It also indicates the portion of this debt-free ownership that is the result of the original investment in the company and the portion accruing from profits. One advantage of the double-entry system is that its information is so nearly complete that it can be used as the basis for making business decisions. Another advantage is that errors are readily detected since the system is based on two equations that must always balance. The term asset means anything of value that is owned. Assets may be tangible, as are furniture and property, or intangible, as are stocks and goodwill. Assets belong to their owner, regardless of who possesses them and regardless of whether they were purchased with borrowed money. All of company’s assets are either owed to someone else or are owned clear of debt.

Liability is the amount that a business owes to another firm, to an individual, or to the government. The amount that is not owed to anyone else but is owned free of debts is called the owner’s equity in the firm. Since everything that is owned is either owed or is free of debt, assets equal liabilities plus equity. This is called the accounting equation.

Each of the assets and the liabilities and the equity is shown on a company’s books and is called an account. An account has two sides: the left side (debit) and the right side (credit). One is the increase side and the other is the decrease side.

Every transaction affects two or more accounts, which will result in a debit and a credit of the same total amount. The same amount is always debited to one account and credited to another account. Thus, when the balances remaining in each of the accounts are added together, total debits will equal total credits.