Text 2. Bookkeeping as Part of Accounting Cycle Active vocabulary

Bookkeeping	Бухгалтерия; бухгалтерский учет
Double-entry bookkeeping	Система бухгалтерского учета с двойной за­писью
Bookkeeper	Бухгалтер, счетовод
Accurate	Точный, правиль­ный; тщательный
Accurately	Точно, правильно; тщательно; безошибочно
Receipts	Денежные поступ­ления, выручка; приход; доходы
Data	Данные
Datum	Данная величина
Record	Запись; регистрация; учетные документы; документа­ция; записывать; реги­стрировать
Record-keeping	Ведение учета; учет
Preliminary	Предваритель­ный
Financial statements	Финансовая документация
Monthly statement	Ежемесячный бюллетень
Journal	Бухгалтерский жур­нал, регистр; ведомость
General journal	Главный журнал учета
Ledger	Бухгалтерская книга, бухгалтерский регистр, гроссбух
General ledger	Общая бухгалтер­ская книга
Balance the ledgers	Сбалансиро­вать бухгалтерские книги
Posting	Разноска по счетам, перенос в бухгалтерскую книгу: проводка
Post	Делать проводку; разносить сче­та; заносить в бухгалтерскую книгу
Ledger posting	Запись в главную бухгалтерскую книгу
To post the journal into the ledger	Переносить журнальные записи в главную книгу
Draw up a balance	Подводить, составлять баланс
Trial balance	Пробный, предварительный бухгалтерский баланс
To bring accounts to a balance	Составлять сводный баланс
Favourable balance	Активный баланс; положительный баланс
Unfavourable balance	Пассивный баланс; отрицательный баланс
Cash balance	Кассовая наличность
Balance of an account	Остаток счета
Balances with foreign banks	Остатки на счетах в заграничных банках
Balance in hand	Денежная наличность; наличность кассы
Balance of payments	Платежный баланс
Balance of payment deficit	Дефицит платежного баланса
Debit account	Запись в левой части счета, показывающая задолженность организации
Debit of an account	Дебет счета; списание средств со счета
Debit balance	Дебетовое сальдо; дебетовый баланс, положительное сальдо
Credit account	Запись в левой части счета, показывающая приход актива
Credit balance	Кредитовое сальдо; кредитовый баланс, отрицательное сальдо
List	Список; составлять список
Accuracy	Точность, правильность; тщательность
Error	Ошибка, погрешность

For management of any company to be efficient, extensive and accurate information concerning receipts and payments, assets and liabilities, depre­ciation of assets and other data about company status are required. Such information being obtained mainly from different records, additional funds and time should be invested in bookkeeping and accounting system.

In general, accounting and bookkeeping mean identifying, measuring, recording economic information about any business, bookkeeping being con­sidered the preliminary stage and part of the larger field of accounting.

The task of a bookkeeper is to ensure the record-keeping of ac­counting and therefore to provide the data to which accounting principles are applied in the preparation of financial statements. Bookkeeping provides the basic accounting data by systematical recording such day-to-day financial information as income from the sale of products or services, expenses of busi­ness operations such as the cost of the goods sold and overhead expenses (накладные расходы) such as a rent, wages, salaries.

Accounting principles determine which financial events and transactions should be recorded in the bookkeeper's books. The analysis and interpretation of these records is the primary function of accounting. The various financial statements produced by accountants then provide managers with the basis for future financial planning and control, and provide other interested parties (in­vestors, the government) with useful information about the company.

Modern accounting system is considered to be a seven-step cycle. The first three steps fall under the bookkeeping function, such as: 1) the systemat­ic recording of financial transactions; 2) the transferring of the amounts from various journals to general ledger (also called "posting step"); 3) the drawing up of the trial balance.

Record keeping of companies is based on a double-entry system, due to which each transaction is recorded on the basis of its dual impact on the company's financial position. To make a complete bookkeeping record of every transaction in a journal, one should consider interrelated aspects of every transaction, and entries must be made in different accounts to keep the ins (receipts) and outs (payments) balanced.

A typical account is known to have two sides: the items on the left side are called debits, while the items on the right side are credits.

Thus, double-entry bookkeeping doesn't mean that the same transaction is entered twice, it means that the same amount of money is always debited to one account and credited to another account, each record having its own effect on the whole financial structure of the company. Certain accounts are increased with debits and decreased with credits, while other accounts are increased with credits and decreased with debits.

In the second step in the accounting cycle, the amounts from the various journals are usually monthly transferred to the company's general ledger — a procedure called posting. Posting data to the ledgers is followed by listing the balances of all the accounts and calculating whether the sum of all the debit balances agrees with the sum of all the credit balances. This procedure known as the drawing up of a trial balance and those that follow it usually take place at the end of the fiscal year. By making a trial balance, the record-keeping accuracy can be checked. The trial balance having been successfully prepared, the bookkeeping portion of the accounting cycle is completed.

The double-entry system of bookkeeping enables every company to deter­mine at any time the value of each item that is owned, how much of this value belongs to creditors, the total profit and how much belongs to the business clear of debt. Thus, one advantage of the double-entry system is that its infor­mation is complete enough to be used as the basis for making business deci­sions. Another advantage is that errors are readily detected, since the system is based on equations that must always be in balance.

Questions to the text:

1. What kind of information is of great importance for proper company management?

2. What role does bookkeeping play in the accounting cycle?

3. What kind of data is collected by a bookkeeper?

4. What is the difference between bookkeeping and accounting?

5. Who is interested in obtaining accurate accounting information?

6. What is the modern concept of accounting system?

7. What tasks should a bookkeeper solve at the first three steps of the accounting cycle?

8. What does double-entry bookkeeping mean?

9. What data are recorded in the company’s general ledger?

10. When is the bookkeeping cycle considered to be completed?

11. What are the advantages of the double-entry system?

Exercise II. Составьте предложения из двух подходящих по смыслу частей.

The preparation of a trial balance includes A special book known as a journal is used Double-entry bookkeeping is a system of recording accounts where The posting procedure consists of In bookkeeping a sum of money paid or owed by a business One should know that crediting means Unlike crediting the debiting procedure means Bookkeeping as part of the accounting cycle deals with A bookkeeper is sure to be fully responsible for The sum of money gained by a business

recording in an account a sum of money paid out or still owed. regular transferring entries from the journal to the appropriate accounts in the ledger. for recording all primary information about any business transaction. the accurate performance of the first three steps in the accounting cycle. Is recorded on the right-hand side of a list of accounts. recording all money received by and paid out of a company in special books or computer files. the checking of accounts by comparing the total credits with the total debts. is shown on the left-hand side of a list of accounts. each sale or purchase is shown as having an effect on both the debit and the credit columns of an account. recording the payment of a sum of money into an account.

Exercise III. Образуйте герундий от глаголов, стоящих в скобках. Переведите предложения на русский язык.

1. (To keep) records accurately is very important both for a company and tax authorities.

2. After (to post) the data the bookkeeper began (to calculate) debit and credit balances.

3. Double-entry bookkeeping speeds up (to check) accounts by (to show) whether they are in balance.

4. The bookkeeper remembered (to record) the data concerning the transaction on the computer.

5. The company’s manager insists on (to keep) detail recording of daily sales by all salesmen (продавец).

6. In (to decide) how much labour to employ, the firm looks for the highest possible profit.

7. The new inexperienced bookkeeper was suspected of (not to detect) the error while checking the company’s debits and credits.

8. The accountant is interested in the trial balance (be drawn up) by the bookkeeper as soon as possible.

Exercise IV. Переведите на русский язык следующие предложения, содержащие инфинитивные конструкции.

1. In making investment decision a financial manager is sure to use a wide variety of information provided by all departments of the company.

2. For the equipment to be replaced by the new one, the accountant should calculate both physical and moral depreciation.

3. In financing business activities a company is likely to rely to a great extent on short-term financing.

4. The manager expects the circulating capital to be transferred from money into goods within the current month.

5. These methods have been found to be useful in improving labour efficiency on a farm.

6. They seem to rum their business successfully due to the proper system of accounting.

7. At the beginning of the 20^th century people though agriculture to depend only upon nature.

8. Taxes that government levy on individual’s incomes company profits, the sale of goods are argues to be used for public needs.

9. The bankers believe the amount of money to be obtained from selling the company’s tangible asserts to be sufficient to settle its debts.

Exercise V. Замените выделенные русские слова в скобках их английскими эквивалентами.

The international balance of payments for a country (известен) as a statement of financial transactions that (имели место) between residents of one country and the rest of the world over a period of one year. By (используя) the word “resident” economists (подразумевают) the citizens and their government.

The statement (показывает) both payments of all kinds (сделанные) by a country and its receipts from all other countries. In (подготавливая) a balance of payments one (следует рассмотреть) two main accounts: the current account and the capital account (счёт движения капитала)ю The former (регистрирует) the balance trade in goods and services plus net profits of income (заработанных) from assets owned in other currencies. International transactions in financial assets, that is, net purchases and sales of assets are listed in the capital account. The latter (состоит из) long-term and short-term investments.

Thus, the balance sheet of payments (включает) information (касающуюся) the net inflow of money to the country due to transactions (совершенных) by individuals, firms and the government under (существующих) market conditions, monetary inflows being recorded as credits. In contrast, monetary outflow (регистрируются) as debits. The balance of payments (является) either in surplus or in deficit when there is either a net inflow of money or outflow of money.

This statement (содержит) detailed data of the transactions that individuals (желают совершить) in (импорте, экспорте, покупках или продажах) foreign assets. It (показывает) the amount of transactions that government wish to make in the form of foreign aid (transfer payments to foreigners), military spending (maintaining military bases abroad), etc.

Используя текст, закончите следующие предложения:

1. After having made transactions with other countries, it is necessary to record …

2. Economists think of using the word “resident” for …

3. The balance of payments can’t be completed without preparing two main accounts …

4. on recording inflows and outflows one can prepare…

5. The purchase and the sale of physical assets and financial assets having beel listed, one can draw up …

Exercise VI. Переведите следующие предложения, обращая внимание на пройденные грамматические конструкции.

1. It is necessary to take into account that depreciation means the cost during the period of using a capital good but not purchase price of the good.

2. While bookkeepers and accountants are interested in describing the actual receipts and payments of a company, the economists are known to study the role of costs and profits for allocating resources to particular activities.

3. To obtain accurate information about financial transaction both small companies and large corporations hire bookkeepers to record and keep the data.

4. One should do preliminary inquiries (наведение справок) before depositing a large sum of money with a new commercial bank.

5. Proper business decisions made by the manager depend mainly on the financial statements the accountant regularly prepares for him.

6. The posting of the data into the ledger to be done by a bookkeeper is known as the third step in the accounting cycle.

7. Until the bookkeeper calculates the sum of all debits and credits, the trial balance is unlikely to be prepared properly.

8. Everybody believes the double-entry system to be of great value in business activity and has several advantages.

9. If a large portion of the firm’s business concerns cash transactions, a separate cash journal can be used instead of the general journal for all those transactions affecting the cash account (кассовый счёт).

10. Since the financial statements are prepared for the use of management rather than for the bookkeeping department, they contain nether debit nor credit columns.

Exercise VII. Прочитайте текст, разделите его на абзацы и озаглавьте каждый абзац. Ответьте на вопросы, следующие за текстом.