6. Objectives of financial reporting

Financial accounting reports provide information to investors, creditors, and others who commit financial resources to a firm. The Financial Accounting Standards Board in the United States has established a broad set of financial reporting objectives to guide the financial reporting process. These objectives are summarized below.

1. Financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit and similar decisions.

2. Financial reporting should provide information to help in asserting the amounts, timing, and uncertainty of prospective cash receipts from dividends or interest from the proceeds from the sale, redemption, or maturity of securities or loans.

3. Financial reporting should provide information about the economic resources of an enterprise, the claims on those resources ( obligations of the enterprise to transfer resources to other entities and owners’ equity ), and the effects of transactions, events and claims on those resources.

4. Financial reporting should provide information about an enterprise’s financial performance during a period ...

5. Financial reporting should provide information about how an enterprise obtains and spends cash, about its borrowing and repayment of borrowing, about its capital transactions, including cash dividends and other distributions of enterprise resources to owners.

I . Прочитайте та перекладіть текст

II. Визначте, які з поданих тверджень відповідають змістові тексту. Запишіть номери цих речень.

1.Financial accounting reports should provide information about investors and creditors.

2. The information about the financial situation is provided by the financial accounting report.

3. Financial accounting reports do not show the expenditures of enterprises.

4. A broad set of financial reporting objectives has been established in the USA.

5. Financial reporting is widely used by all developed countries.

6. Investors and creditors are supplied with useful information.

7. Creditors use financial reports of enterprises to make rational investments.

III. З поданих варіантів тем виберіть ту, яка є головною у тексті

1.Information provided by the financial reporting.

2. Major functions of financial reporting.

3. Objectives of financial reporting.

4. Information for investors and creditors.

5. Objectives of managerial reporting.

6. Obligations of the enterprises.

7. Information about how enterprises obtain and spend cash.

IV. Визначте слова, які відповідають змісту наступних речень.

1. … purchase common shares of a firm.

1. sellers;

2. borrowers;

3. investors;

2. … provide information about capital transactions of a firm.

1. financial reports;

2. managerial reports;

3. statements;

3. A set of financial reporting objectives is established … reporting process.

1. to perform;

2. to guide;

3. to help;

4.To make rational … the investors use information provided financial report.

1. dividends;

2. borrowing;

3. investments;

5.Investors and creditors have certain …on the resources of a firm.

1. investments;

2. obligations;

3. claims;

6. Enterprises have … to transfer resources to owners’ equity.

1. claims;

2. obligations;

3. transaction;

Enterprises obtain and spend …

1. cash;

2. shares;

3. loans;

V. Виберіть і напишіть замість крапок форму дієслова, яка б відповідала нормам граматики англійської мови.

1. Financial accounting report … information to investors.

1. provide;

2. provides;

3. providing;

2. Investors and creditors … financial resources to a firm.

1. commit;

2. commits;

3. committing;

3. Enterprises … resources to other entities.

1. transferring;

2. transfers;

3. transfer;

4. … cash enterprises should provide information about how they spends them.

1. obtained;

2. obtaining;

3. obtain.

5. The users of information … in financial reports make rational investments

A . providing ;

B . provided ;

C . provide ;

6 . Financial reports help . . . the amount of perspective cash receipts .

A. to assert ;

B . asserting ;

C . asserted ;

7. Affects of transactions … in financial reports .

A . reflect ;

B . reflected ;

C . are reflected ;

VI . З підкреслених слів або словосполучень виберить те , яке треба змінити, щоб речення відповідало граматичним нормам англійської мови.

1. Potential investors and creditors makes rational investments due to financial

A B C

reporting.

2. Enterprise makes transactions and is obtaining cash annually.

A B C

3. Financial reporting help its users in asserting the amount of perspective

A B C

cash receipts from dividends.

4. Owners obtains information about enterprise resources .

A B C

5. Enterprise have obligation to repay the borrowings

A B C

6. Enterprise’s financial performance are reflected in financial reports .

A B C

7. Creditors asserts the maturity of securities

A B C

7. Balance sheet

A balance sheet is a statement of financial position that provides information about the economic resources of a firm and the claims on those resources by creditors and owners as of a specific moment in time. It presents a listing of the firm’s assets, liabilities, and owners’ equity. In a corporation, owners are called shareholders and the owners’ equity is referred to as shareholders’ equity.

Assets are economic resources. An asset is an item that has the ability or potential to provide future services or benefits to a firm. For example, cash can be used to purchase merchandise inventory or equipment. Merchandise inventory can be sold to customers for an amount the firm hopes will be larger than was paid for it. Equipment can be used in transporting the merchandise inventory to customers.

Liabilities are creditors’ claims on the resources of a firm. For example, a corporation acquired merchandise inventory from its suppliers but has not yet paid for a portion of the purchases. As a result, these creditors have a claim on the assets of the company . Labor services have been provided by employees for which payment has not been made as of a given date. These employees likewise have a claim on the assets of the firm. Creditors’ claims, or liabilities, result from benefits previously received by a firm, and typically have a specified amount and date at which they become due.

I . Прочитайте та перекладіть текст

IІ. Визначте, які з поданих тверджень відповідають змістові тексту. Запишіть номери цих речень.

1.A balance sheet provides information about the money capital of a firm.

2. Liabilites are creditors’ claims on the assets of the company.

3. Liabilites have a specified amount and date at which they become due.

4. Owners are usually called shareholders.

5. Customers sell merchandize inventory to a firms.

6. Assets are natural resources.

7. Employees obtain salaries and have a claim on the assets of firm.

IIІ. Прочитайте наступні питання. До кожного питання пропонуються 3 варіанти відповідей. Запишіть номер та літеру вірного варіанту.

1.What is a balance sheet?

A .statement;

B. information;

C. position.

2.What is creditors’ claim?

1. assets;

2. liabilities;

3. benefits.

3.What provides services or benefits to a firm?

1. claims;

2. purchases;

3. assets.

4.What provides information about economic resources and claims at a specific moment.

1. balance sheet;

2. financial report;

3. managerial report.

5.Who is called shareholder?

1. creditor;

2. owner;

3. employee.

6.What has the ability to provide future benefits to a firm?

1. liability;

2. assets;

3. cash.

7.What results from benefits previously received by a firm?

A. services;

B. assets;

4. liabilities.

IY.Визначте слова, які відповідають змісту наступних речень:

1.Cash can be used … equipment.

1. to sell;

2. to purchase;

3. to borrow.

2.Merchandise inventory is … by a firm.

1. pay;

2. send;

3. acquired

3. … usually transport equipment to their customer.

A. suppliers;

B. buyers;

C. creditors.

4. … for labour services should be made as of a given date.

1. payment;

2. purchase;

3. amount.

5. … consist of property of all kinds.

1. liabilities;

2. inventory merchandise;

3. assets.

6. … consist of money owing for loans and goods supplied to the firm.

1. purchases;

2. liabilities;

3. assets.

7. Shareholders’ equity is often called the …

A. liabilities

B. owners’ equity

C. assets

V. Виберіть і напишіть замість крапок форму дієслова, яка б відповідала граматичним нормам англійської мови.

1. Employees … labour services to a firm.

1. have provided;

2. have been provided;

3. has provided

2. Merchandise inventory … by a corporation.

1. is acquired;

2. has acquired;

3. is acquiring.

3. Customers … buy merchandise inventory.

1. can;

2. must;

3. may

4. Cash is obtained and … by an enterprise.

1. spent;

2. spend

3. spended.

5. Firms sell equipment to customers for an amount larger than … paid for it.

1. is;

2. was;

3. were.

6. Employees … salaries for their labor services.

A. receiving

B. receives

C. receive

7. Potential investors use information on a firm’s profitability before … to purchase its shares.

A. decide

B.decided

C.deciding.

VI.З підкреслених слів або словосполучень виберіть те, яке треба замінити, щоб речення відповідало граматичним нормам англійської мови.

1. A company have to pay its suppliers for the purchases.

A B C

2. A firm receiving benefits as a result of beneficial transactions.

A B C

3. Payment for labour services must be pay at a given date.

A B C

4. Balance sheets are being drawn up periodically, at least annually, sometimes

A B

half-yearly, quarterly or monthly.

C

5. Creditors claims results from benefits previously received by a firm.

A B C

6. In a corporation owners’ equity are called shareholders’ equity.

A В С

7. Creditors has claims on the assets of the company.

А В С