- •V (verb) – глагол phr (phrase) – фраза
- •I. Text the nature of business
- •Input → transformation → output
- •I. Business n – uncountable
- •II. Business (businesses) n – countable
- •III. Business n – singular
- •Vocabulary
- •II. Comprehension exercises
- •III. Vocabulary practice exercises
- •IV. Brush up your grammar
- •All Tenses Compared Все времена в сравнении
- •V. Speech practice exercises
- •Vocabulary notes
- •I. Text the economic foundations of business
- •Image of a global village.”
- •Economic Systems
- •Economic Forces Affecting Business
- •Vocabulary
- •II. Comprehension exersices
- •3. Check your progress:
- •III. Vocabulary practice exercises
- •IV. Brush up your grammar
- •Passive Voice Страдательный залог
- •V. Speech practice exercises
- •The Pope and the Price of Fish
- •Vocabulary notes
- •I. Text economic entity assumption
- •Sole Proprietorships
- •Partnerships
- •Corporations
- •Vocabulary
- •II. Comprehension exercises
- •3. Review Questions
- •III. Vocabulary practice exercises
- •5. Make and Do
- •IV. Brush up your grammar
- •The Present Perfect Continuous Tense
- •Contractions
- •V. Speech practice exercises
- •Vocabulary notes
- •Vocabulary notes
- •Vocabulary notes
- •I. Text accounting
- •А. The Nature of Accounting
- •В. Accounting and Bookkeeping
- •С. Accounting Professionals
- •Vocabulary
- •II. Comprehension exercises
- •2. Review questions
- •III. Vocabulary practice exercises
- •The Accounting Cycle
- •IV. Brush up your grammar
- •The Infinitive
- •Функции инфинитива
- •V. Speech practice exercises
- •I. Text financial statements
- •А. Balance Sheet
- •Vocabulary
- •В. Income Statement
- •Vocabulary
- •С. Statement of Cash Flows
- •Vocabulary
- •II. Comprehension exercises
- •III. Vocabulary practice exercises
- •IV. Brush up your grammar
- •The Modals and their Equivalents
- •V. Speech practice exercises
- •Vocabulary notes
- •I. Text managing financial resources
- •A. Financing the Enterprise
- •B. The Responsibilities of Financial Managers
- •Vocabulary
- •II. Comprehension exercises
- •3. Review Questions.
- •III. Vocabulary practice exercises
- •3. Borrowing and Lending
- •IV. Brush up your grammar
- •Conditional Sentences
- •V. Speech practice exercises
- •Characteristics and Functions of Money
- •Vocabulary notes
- •Vocabulary notes
- •I text banking institutions
- •Modern Banking Institutions
- •Commercial Banks
- •Vocabulary
- •II. Comprehension exercises
- •2. Review Questions
- •III. Vocabulary practice exercises
- •Banking in the Digital Age
- •IV. Brush up your grammar
- •The Sequence of Tenses Reported Speech
- •С правилом согласования времён direct speech reported speech
- •I / we à he (she) / they tomorrow à the next day
- •V. Speech practice exercises
- •Vocabulary notes
- •Библиографический список
- •Оглавление
- •6 80021, Г. Хабаровск, ул. Серышева, 47.
I. Text financial statements
“Many view accounting as a primary business
language. It is of little use, however, unless
you know how to “speak” it.”
- Geoffrey A. Hirt, Professor of Finance
DePaul University
The end results of the accounting process are a series of financial statements. The balance sheet, the income statement, and the statement of cash flows are the best-known examples of financial statements. Financial statements are tools for analyzing a business. Together these statements provide information about an organization’s financial strength.
А. Balance Sheet
The balance sheet, also known as the statement of financial position, shows the financial situation of the company on a particular date, generally the last day of its financial year. This statement lists the company’s assets, liabilities, and shareholders’ funds (owners’ equity).
An asset is something owned by a company that will be used to generate income. Assets can consist of cash, things you can convert into cash like investments, and equipment you need to make products or provide services. Most often, the asset section of the balance sheet is divided into current assets and fixed assets. Current assets include cash and other items (marketable securities, accounts receivable and inventory) that will or can become cash within the course of a calendar year. Accounts receivable refers to money owed the company by its clients or customers who have promised to pay for the products at a later date. Marketable securities are short-term investments in securities that can be converted to cash quickly. Inventory includes finished goods ready for sale, or goods in the process of being finished. Fixed assets, also called long-term assets are long-term investments in land, buildings, machinery, equipment, furniture, and other property used in running the business. Items classified as fixed also include intangible assets, such as corporate “goodwill’, or reputation, as well as patents, trademarks, and copyrights, these assets often being the most important factor for obtaining future incomes. Fixed assets have a useful life of more than one year.
Assets are listed in descending order by liquidity, or the ease with which they can be converted into cash. Thus current assets are listed before fixed assets.
Liabilities come after assets because they represent claims against the company’s assets or what the business owes to its creditors such as banks and suppliers. The liabilities section of the balance sheet is often divided into current liabilities and long-term liabilities. Current liabilities are obligations which must de repaid within one year. These include accounts payable, notes payable, and accrued expenses. Accounts payable represent amounts owed to suppliers for goods and services purchased with credit. Accrued expenses represent all unpaid financial obligations (such as wages earned by employees but not yet paid and taxes owed to the government) Long-term liabilities have longer repayment terms.
If liabilities are subtracted from assets (assets – liabilities) the amount remaining is the owners’ share of a business. This is known as owners’ equity, in other words the investment of the owners in the business. The owners’ equity includes share capital (money received from the issue of shares) and the company’s reserves, including the year’s retained earnings (the portion of shareholders’ equity that is not distributed to its owners in the form of dividends).
The interdependence of these three components (assets, liabilities, and owners’ equity) constitutes the fundamental accounting equation as follows: assets equal liabilities plus owners’ equity.
ASSETS = LIABILITIES + OWNERS’ EQUITY
The accounting equation applies to all economic entities regardless of size, nature of business, or form of business ownership. The accounting equation must always remain in balance; in other words, one side must equal the other. To keep the accounting equation in balance, companies use a double-entry bookkeeping system that records every transaction affecting assets, liabilities, or owners’ equity. For example, if a company borrowed $10,000 from a bank, $10,000 would be added to assets (cash) on the left side of the accounting equation and $10,000 would also be added to liabilities (bank loans) on the right side. Thus two entries are required for every transaction and in this way the accounting equation is always kept in balance.
Thus the balance sheet is a snapshot of a company’s financial position on a particular date, like December 31, 2010. In effect it freezes all business actions and provides a baseline from which companies may measure change. This statement is called a balance sheet because it includes all elements in the accounting equation and shows the balance between assets on one side of the equation and liabilities and owners’ equity on the other side. In other words, like the accounting equation, a change on one side of the balance sheet means changes elsewhere. Some companies prepare a balance sheet more often than once a year, perhaps at the end of each month or quarter. By reading a company’s balance sheet you should be able to determine the size of the company, the major assets owned, any asset changes that occurred in recent periods, how the company’s assets are financed, and major changes that have occurred in the company’s debt and equity in recent periods.