Unit 3. Balance Sheet.

Text 1. Read and translate.

The balance sheet is a document that shows the totals of money received and money paid out by a company and the difference between them. The balance sheet includes two parts: assets; liabilities and share capital. Both parts should always be balanced.

The item Current Assets includes cash, marketable securities, accounts receivable and stock-in-trade. Thus these assets appear to be working assets, i.e. they circulate as follows:

Realised Finished Goods ACCOUNTS RECEIVABLE

Accounts receivable CASH

CASH ACCOUNTS PAYABLE

Current assets are the assets which a company can convert quickly into cash, usually stocks and accounts receivable falling due within one year.

Cash includes bills, petty cash fund and money on deposit.

Marketable securities are a short-term investment of surplus or temporary free assets. Normally this assets are located into commercial securities or federal bonds. The balance sheet shows their nominal cost, their market value is given in brackets.

Accounts receivable are amounts owed to a business by suppliers of goods and services. Usually customers are allowed a 30, 60 or 90 days period of time within which they are to effect a payment.

Stock-in-trade includes raw materials to be used for production and semi-finished good.

Capital assets include property, premises, plant and machinery, and equipment. They are not meant for sale but for the goods production, storage and transportation. This category comprises land, buildings, machinery, equipment, furniture and vehicles. Capital assets loose their value with age and use. The real cost of capital assets may gradually loose their value as a result of obsolescence of machinery.

Prepayments and deferred charges include, for instance, insurance against fire prepayment or lease prepayments etc.

Liabilities are money owned by a company, a debt.

Current liabilities are the debts that are payable on demand or within one year.

Long-term liabilities are liabilities which should be paid within a period of time which is not less than one year.

1. Письменно ответьте на вопросы к тексту.

1. What is a balance sheet?

2. What are two parts of the balance sheet?

3. What does the item “cash” consists of?

4. What does the item “current assets” consists of?

5. What are marketable securities?

6. What are liabilities?

7. Within what period of time must current liabilities be paid out?

8. Within what period of time must long-term liabilities be paid out?

2. Прочитайте и напишите парами слова и выражения, имеющие одинаковые значения.

prepayments	a) current capital
capital assets	b) receivables
circulating capital	c) payment in advance
accounts receivable	d) land, building

Unit 4. Money.

Text 1. Read and translate.

The work which people undertake provides them with money. People buy essential commodities with money. All values in the economic system are measured in terms of money. Our goods and services are sold for money, and that money is in its turn exchanged for other goods and services. Coins are adequate for small transactions, while paper notes are used for general business. Originally, a valuable metal (gold, silver or copper) served as a constant store of value.

Valuable metal has generally been replaced by pa­per notes. These notes are issued by government and authorized banks, and are known as legal tender Other arrangements such as cheques and money orders are not legal tender. They perform the function of substitute money and are known as 'instruments of credit’. Credit is offered only when creditors believe that they have a good chance of obtaining legal tender when they present such instruments at a bank or other authorized institu­tions. If a man's assets are known to be considerable, then his credit will be good. If his assets are in doubt, then it may be difficult for him to obtain large sums of credit or even to pay for goods with a cheque.

The value of money is basically as economists put it, its 'purchasing power'. This purchasing power is dependent on sup­ply and demand. The demand of money is reckonable as the quantity needed to effect business transactions. The demand for money is related to the rapidity with which the business is done. The supply of money is the actual amount in notes and coins available for business purposes. If too much money is available, its value decreases. This condition is known as 'inflation'.