Accounting and financial statements © Consider the aifferent types of accounting and financial statements (© Discuss a company’s financial results Lead-in + Whats accounting? What skills do you think accountants need? + Doyou think you have these skills? (What are: your assets and liabilities?) «+ Ifyou have not yet chosen a career, could itbe accountancy? Vocabulary -petnaps we could a way 0 rdotine oft” + Which basic accounting words are defined below? ee "all the money received irom business activities during given period Aassets Biincorne transactions 2 ee ney that a business spends on goods or services during a given Period Adebis Bexpenditure liabilities 4 cfnancial operating plan showing expected income and expenditure account Budget C financial statement 4s aything owned by a business ~ cash, buildings, mactines,equpment ee Aasset Bincome Crevenue 5 ca the money that a company will have to pay to someone ese nthe futures including debts, taxes and interest payments A debits Bexpenditure liabilities 6 anentry in an account, recording @ payment macle Acredit Bdebt debit 7 anentry in an account, recording a payment received Acredit Bdebit income adjective describing something without a material existence, ‘which you can’t touch Acurrent B intangible C tangible «9 adjective describing aliabilty which has been incurred but not yet invoiced to the company accrued Badeterred C receivable 10 delayed or postponed until a later time A deferred B payable C retained 2 How well do you know the different types of accounting and the diferent em anes of the accounting (or accountancy) profession? Match the terms ‘with the definitions in the box below. accounting auditing bookkeeping _cost accounting acotive eecounting’ managerial or management accounting ‘6% accounting + calelatingallthe expenses involved in producing something, including materi labour, and all other expenses ‘Acoounting and financial statements Unit 1@ 952 calculating how much an individual or a company will have to pay to the local and national governments (and trying to reduce this to a minimum) 3 inspecting and reporting on accounts and financial records 4 preparing financial statements showing income and expenditure, assets and liabilities 5 providing information that will allow a business to make decisions, plan future operations and develop business strategies 6 using all available accounting procedures and tricks to disguise the true financtal position of a company 7 writing down the details of transactions (debits and credits) * Which of these areas of accounting do you find the most interest 3 Match up the names of the financial statements with the definitions below. - ——__ 1 Balance sheet (or 2 Cash flow statement |3 income statement (or Statement of financial Statement of income, Profit position) and loss statement, or Profit and loss account) A asstatement giving details of money coming into and leaving the business, divided into day-to-day operations, investing and financing B astatement showing the difference between the revenues and expenses of a period € astatement showing the value ofa business's assets, its lablties, and its capital or shareholders’ equity (money the business has that belongs to its owners) ‘4 Make common word combinations with the verbs and nouns below. calculate assets ] expenditure income liabilities records | taxes transactions Reading 1: Google Inc. Balance sheet Look at the balance sheet opposite, and answer these questions, 1 Which lines on the balance sheet do the defritions 4 tthe 2008 balance sheet date, which s greater, below it refer to? (Two have been done as the amount of capital the shareholders have paid examples.) into the company, or the amount of profit that has 2 Which two figures have to be the same (to balance), not been spent? by definition? 5 At the 2008 balance sheet date, which total is 3 How much money had the company already paid in higher the money Google currently owes, or the advance for goods and services, on the date of the money that tis owed? 2008 balance sheet? 96 Unit 19 Accounting end financial statements j69421 ASSES To 286.1) _ 2579" Current Assets ae 20,7818 7269.18 y/o ipmen Total Grass S284 4059.26 Good Net (10) 488985 —— em vesnengs ~~ Otfier Long Term: ———— ter Curent Liabiies Tar ‘entities, Tota Current ar value of the stock © expenses such as wages, ate ofthe balance sheet 5 6 7 mon & brofts that havenot been Alstributed to shareholders & tangible assets such as offices, machines, etc 10 the ifference between the urct tangible assets 17 the total amount fase price of acquired companies, and their net of money owed that the company wil have to pay out Finance _