UNIT - Unibuc

UNIT 7
BUSINESS
SECTION A: ACCOUNTING AND FINANCE
TASK SHEET 1: Match up the terms on the left with the definitions on the right. |1 |bookkeeping |A |calculating an individual's or a |
| | | |company's liability for tax |
|2 |accounting |B |writing down the details of transactions |
| | | |(debits and credits) |
|3 |managerial |C |keeping financial records, recording |
| |accounting | |income and expenditure, valuing assets |
| | | |and liabilities |
|4 |cost accounting |D |preparing budgets and other financial |
| | | |reports necessary for management |
|5 |tax accounting |E |inspection and evaluation of accounts by |
| | | |a second set of |
| | | |accountants |
|6 |auditing |F |using all available accounting procedures|
| | | |and tricks to disguise the true |
| | | |financial position of a company |
|7 |"creative |G |working out the unit cost of products, |
| |accounting" | |including materials, labour and all other|
| | | |expenses | TASK SHEET 2: Match up these words with the definitions below:
1. a company's owners
2. all the money received by a company during a given period
3. all the money that a company will have to pay to someone else in the
future, including taxes, debts, interest and mortgage payments
4. the amount of business done by a company over a year
5. anything owned by a business (buildings, machines, so on) that can be
used to produce goods or pay liabilities
6. the reduction in value of a fixed asset during the years it is in use
7. sums of money owed by customers for goods or services purchased on
credit
8. sums of money owed by suppliers for purchases made on credit
9. raw materials, work in progress and finished products stored ready for
sale
10. various expenses of operating a business that cannot be charged to any
one product, process and department
TASK SHEET 3: ACCOUNTING AND FINANCIAL STATEMENTS
Insert the words in the box above in the gaps of the following text: In accounting it is always assumed that a business is a "going
concern" that it will continue indefinitely into the future, which means
that the current market value of its fixed assets is irrelevant, as they
are not for sale. Consequently, the most common accounting system is
historical cost accounting, which records (1) .................. at their
original purchase price, minus accumulated depreciation charges. In times
of inflation, this understates the value of appreciating assets such as
land, but overstates profits as it does not record the replacement cost of
plant or (2)............... The value of a business's assets under
historical cost accounting - purchase price minus (3).....................
- is known as its net book value.
Company law specifies that (4) .................. must be given
certain financial information. Companies generally include three financial
statements in their annual reports.
The profit and loss account (GB) or income statement (US) shows (5)
.................. and expenditure. It usually gives figures for total
sales or (6) ....................., and costs and
(7).......................... The first figure should obviously be higher
than the second, namely there should be a profit. Part of the profit goes
to the government in taxation, part is usually distributed to shareholders
as a dividend and part is retained by the company, for it to be able to
cope with possible future threats.
The balance sheet shows a company's financial situation on a
particular date, generally the last day of the financial year. It lists the
company's assets, its (8) .................. and shareholders' funds. A
business's assets include (9) ............... and it is assumed that these
will be paid. Liabilities include (10) ..............., as these will have
to be paid. Negative items on financial statements, such as creditors,
taxation and dividends paid are usually enclosed in brackets.
In accordance with the principle of double-entry bookkeeping (that
all transactions are entered as a credit in one account and as a debit in
another), the basic accounting equation is:
Assets = Liabilities + Owners' Equity
This can be rewritten as:
Assets - Liabilities = Owners' Equity or Net Assets
This includes share capital (money received from the issue of shares),
share premium (GB) or paid-in surplus (US) (any money realized by selling
shares at above their nominal value) and the company's reserves (including
the year's retained profits). Shareholders' equity or net assets are
generally less that a company's market capitalization (the total value of
its shares at any given moment, meaning the number of shares times their
market price), because net assets do not record items such as good will.
The third financial statement has various names, including the source
and application of funds statement and the statement of changes in
financial position. This shows the flow of cash in and out of the business
between balance sheet dates. Sources of funds include trading profits,
depreciation provisions, sales of assets, borrowing and the issuing of
shares. Application of funds includes purchases of fixed or financial
assets, payment of dividends, repayment of loans and trading losses. TASK SHEET 4: Match the definitions with the correct money word: |1. a fixed amount which is paid, usually monthly, to |salary |
|workers of higher rank | |
|2. an amount of money which you lend to someone |fare |
|3. a sum of money which is owed to someone |taxes |
|4. paid while travelling, especially on public transport,|loan |
|buses, trains, etc. | |
|5. paid to the government for services that the state |debt |
|provides | |
|6. paid as a punishment for breaking the law |cash |
|7. money paid by a company or the state on your |fee |
|retirement | |
|8. money paid by the state, usually to students |limon |
|9. money paid for professional services, e.g. to a |duty |
|doctor | |
|10. money which is in the form of coins and notes, not |interest |
|cheques | |
|11. an amount of money you receive, usually weekly, in |grant |
|return for labour or service | |
|12. money paid by divorced father to his former wife to |pension |
|upkeep his children | |
|13. tax on imported articles paid to the customs |fine |
|14. paid at a restaurant after eating |bill |
|15. extra percentage paid on a loan |wage |
TASK SHEET 5: Give the name for the following definitions: |a) money paid to authors or inventors according to the |an a-------- |
|sales of their work | |
|b) a sum of money used to make more money from something |a m------- |
|that will increase in value | |
|c) the money which a building society or bank lends to |a s---- |
|someone to buy a house | |
|d) the money that a person pays to an insurance company |r-------- |
|to protect against loss or damage | |
|e) money, usually from a relative, to live on |a p------ |
|f) an amount of money, related to the value of goods |an o-------- |
|sold, which is paid to a salesman for his services | |
|g) part- payment of money which you make to stop the |m---------- |
|seller from selling his goods to others | |
|h) part of the value of a company that you may buy |a l----- |
|i) money paid by divorced or separated people to support |an I---------|
|the former husband or wife | |
|j) the amount of money that goes to a shareholder |a d------- |
|k) money received from someone in his or her will |a d------ |
|l) the amount of money borrowed from a bank, greater than| c--------- |
|that which is in your account | |
|m) an additional payment which is a reward to those who |a b---- |
|work for a company for their extra work | |
TASK SHEET 6: Choose the correct answer and fill in the blanks: 1. The.....of the pound has fallen recently.
a. expense b. price c. value d. worth 2. The accounts show a .....of $ 500 this month.
a. decrease b. deficit c. deterioration d.
devaluation 3. The bank will require three signatures when you open an account.
a. natural b. sample c. specimen d.
trial 4. I'm afraid that the bank will refuse my application for an extended
....... .
a. balance b. compensation c. estimate d.
overdraft 5. At this bank you can get 17%.....on your own savings.
a. interes