586

17.fixed assets

18.accounts receivable

19.inventories (n)

20.property (n)

21.equipment (n)

22.permanent (adj)

23.furniture and fixtures

24.to run a business

25.with the exception

26.to depreciate (v) depreciation (n)

27.lease (n)

28.mortgage (n)

29.expenses (n)

30.revenue (n)

31.to exceed (v)

32.to subtract (v)

33.net income

34.the «bottom line»

35.cash flow

36.to acquire (v)

37.accrual basis

38.cash basis

39.scrutiny

оборотные активы / средства

основные средства дебиторская задолженность, счета к получе-

нию запасы, резервы

имущество, собственность оборудование постоянный

мебель и принадлежности (статья в счетах)

руководить делом, предприятием за исключением обесценивать, падать в цене износ, снижение стоимости

аренда, арендованное имущество ипотека, закладная расходы выручка превышать вычитать чистая прибыль

чистая прибыль после налогообложения поток денежных средств, денежные поступ-

ления

приобретать на базе накопления

на базе кассовых операций исследование, рассмотрение

READING COMPREHENSION

1. Find English equivalents for the following Russian phrases from the text.

Финансовое положение фирмы; по крайней мере, раз в год; использовать финансовый год; элементы бухгалтерского тождества; ожидаемая будущая выгода; собственный капитал; дебиторская задолженность, с целью увеличения благосостояния; срок полезного использования более одного года; постоянные вложения; за исключением земли; выплачивать в течение года, за данный период времени, избежать начисления налогов, подробное рассмотрение; показать ликвидность компании.

2.Look through the above text again and complete the sentences as in the text.

1)The major financial statements are ….

2)The balance sheet sets out ….

3)Assets on a balance sheet are usually divided into ….

4)There are two types of claim against ….

5)Liabilities must have arisen from ….

6)When a balance sheet is prepared, fixed assets are ….

7)The income statement shows how much ….

8)Companies mainly prefer ….

9)Cash is required to ….

10)The statement of cash flows summarizes ….

3.Use the information in the text to answer the following questions.

1)What is the purpose of the balance sheet?

2)How often do companies prepare balance sheets?

3)What are the main items of the balance sheet?

4)What do fixed assets include?

5)Why are fixed assets depreciated?

6)What fixed asset is never depreciated?

7)What do intangible assets include?

8)What do current assets include?

9)What are the two main groups of liabilities?

10)What does the profit and loss account show?

11)Why do companies prefer recording revenue on a cash basis?

12)What are the main objectives of the cash flow statement?

4.Decide whether the following statements are true (T) or false (F). Comment your an-

swers.

1)The two sides or halves of a balance sheet always have the same total. ____

2)The balance sheet gives information on how much money the company has received from sales of shares. ____

3)The assets total is always the same as the liabilities total. ____

4)The balance sheet tells you how much money the company owes. ____

5)The revenue of the company in the past year is shown on the balance sheet. ___

5. Choose one of the financial statements, explain in a few sentences the nature and purpose of it. Give your opinion on how it can be helpful in identifying financial problems of a business. Use the following phrases.

•I would like to comment on …;

•The next issue I would like to focus on is …;

•Furthermore, …;

•To illustrate this point, let me consider …;

•There is something I’d like to point out …

•Generally speaking, …;

•Let me give an example …;

•I’d like to conclude by stating that ….

VOCABULARY PRACTICE

1.Match the opposites.

1)	ability	a)	intangible
2)	divide	b)	loss
3)	useful	c)	be short of
4)	inflow	d)	discontinuous
5)	profit	e)	useless
6)	exceed	f)	disbursements
7)	tangible	g)	disability
8)	permanent	h)	unite
9)	receipts	i)	income
10)	expenses	j)	outflow

2.Match the synonyms.

1) wage	a) quantity
2) price	b) tangible
3) amount	c) possess
4) depreciation	d) brand
5) own	e) be obliged
6) invisible	f) value
7) material	g) intangible
8) trademark	h) salary
9) obligation	i) obsolescence
10) owe	j) liability

3.Match the verbs from (A) with the nouns from (B).

	A	B
	to allocate	an entry
	to incur	a balance sheet
	to publish
	to draw up	books
	to make	financial position
	to keep
	to report upon	a transaction
	to enter	a statement
		costs
		funds

4.Sort the following into current, fixed and intangible assets.

	premises	cash in bank	debtors
	goodwill	human capital	investments
	locomotives	patents	construction in progress
	stock	land	trademark
	bank deposits	software	sub-grade
	Current assets	Fixed assets	Intangible assets
	1)	1)	1)
	2)	2)	2)
	3)	3)	3)
	4)	4)	4)
	5)	5)	5)

5.Fill in the missing words in the sentences below and translate them into Russian.

administrative expenses cost of sales distribution dividend extraordinary ordinary retained turnover

1)As First Scotrail Limited is a railway company, all their contracts on passenger railway services are known as ________________ activities.

2)Recently, a private transportation company paid First Scotrail Limited a large amount of money to use the company’s premises for the period of three months. This was recorded in the Profit and Loss Account as _______________income.

3)Income which the company makes in its normal activities is known as __________________.

4)At the end of the year, some of the profits may be shared out among the shareholders who will receive a ________________.

5)The costs of getting the goods to the customers are shown as ______________ costs in the Profit and Loss Account.

6)Materials which are used up in manufacturing and workers’ wages are recorded as

_______________.

7)The secretary’s salary and expenses incurred in the office are shown as ______________.

8)The company may decide to keep some of the profits at the end of the year and the amount is shown as _______________ profits.

6.Make word combinations using a word from each box. Then use the word combinations to complete the sentences below.

distribute		liabilities
grant		money
owe		profits
pay		earnings
retain		credit

1)We ______________ a lot of our ____________ because we don't ____________ any of our

_____________ to the shareholders.

2)Most businesses have customers who _____________, because they _____________ them 30 or 60 days’ ______________.

3)We have a lot of ______________ that we’ll have to _____________ later this year.

7.Match the two parts of the sentences and translate them.

1)A company's value on the stock exchange is nearly always

2)Brand names, trade marks, patents, customers, and qualified staff

3)Cash, money owed by customers, and inventory

4)Companies record inventory at the cost of buying or making the items,

5)Companies write off bad debts, and make provisions

6)Land, buildings, factories and equipment

a)are current assets.

b)are examples of intangible assets.

c)are examples of tangible, fixed assets.

d)by deducting the amount from profits.

e)higher than the value of its net assets.

f)or the current market price, whichever is lower.

8.Read the definitions and give the appropriate terms.

1)____________ are companies that provide other companies with materials, components, etc.

2)____________ are profits that the company has not distributed to shareholders.

3)____________ are things a company owns and uses in its business.

4)____________ consist of everything a company owes.

5)____________ consists of money belonging to a company's owners.

9.Study the diagram and complete the text.

R evenue	D ividends

C om pany		Profit	T ax

R etained earnings

E xpenses

All the money coming into a company during a given period is 1)___________. 2)___________

minus the cost of sales and operating 3)_____________, such as rent and salaries, is known as 4)___________ or net income. The part of its profit that a company pays to its shareholders is a 5)____________. Companies pay a proportion of their profits to the government as 6)___________, to finance government spending. They also 7)___________, or keep, some of their earnings for future use.

10. Study the Balance Sheet of a British Transportation Company. Using the additional information complete the company’s balance sheet.

First Scotrail Limited Balance Sheet at 31 March 2007

	2007	2006
	£ m	£ m
Fixed assets		26.0
Current assets
stocks		3.3
debtors		51.2
cash at bank and in hand	42.5	39.7
	123.4	94.2
Current liabilities
loans and overdrafts		30.9
creditors		(86.8)
Net current assets	(10.6)	7.4
Total assets less current liabilities	31.23	33.5
Liabilities falling due after one year	(11.0)	(3.6)
Capital and reserves		21.4

1)The amount the company owed their suppliers increased to £134m in 2007.

2)The value of spare parts and consumables decreased slightly by £300,000 to stand at

£3m.

3)Investment in the business increased sharply to £16m.

4)The value of the company’s property, plant and equipment, leased assets and assets under construction rose by £15.9m to stand at £41.9m.

5)The company’s short-term borrowing from the bank amounted to £1.8m in 2006.

6)The amount customers owed the company increased to £78m.

Add up the totals. Does it balance?

11. Study the Consolidated Balance Sheet of Open Joint Stock Company «Russian Railways».

Consolidated Balance Sheet Year Ended 31 December 2006 (all amounts are in millions of Russian Rubles)

	31 De-	200
	cember	5
	2006	(Restated)
ASSETS
Non-current assets
Property, plant and equipment	1,421,0	1,24
	73	8,367
Intangible assets	5,638	4,62
		4
Investments	1.410	1,19
		8

Deferred tax asset	13,297	41,8
		30
Other non-current assets	7,641	1,29
		4
Total non-current assets	1,452,0	1,30
	22	0,285
Current assets
Inventories	54,632	45,4
		70
Prepayments and other current assets	52,801	68,3
		88
Income tax receivable	4,959	463
Receivables	21,070	15,5
		82
Cash and cash equivalents	17,423	12,2
		00
Total current assets	150,88	142,
	5	103
Total assets	1,602,9	1,44
	07	2,388
EQUITY AND LIABILITIES
Equity
Share capital	1,535,7	1,53
	00	5,700
Revaluation reserve	172,05	172,
	1	051
Accumulated deficit	(611,3	(70
	92)	1,241)
Net profit for the year attributable to equity holders of the	139,76	90,7
parent	6	89
	1,236,1	1,09
	25	7,299
Minority interest in subsidiaries	213	208
Total equity	1,236,3	1,09
	38	7,507
Non-current liabilities
Deferred tax liabilities	121	-
Long-term borrowings	48,425	50,7
		39
Finance lease obligations, net of current portion	40,821	24,1
		70
Employee benefit obligations	70,269	67,9
		90
Other long-term debt	2,853	13,3
		11
Total non-current liabilities	162,48	156,
	9	210
Current liabilities
Payables	95,289	75,0

		04
Finance lease obligations, current portion	9,575	5,55
		7
Income tax payable	76	1,54
		5
Taxes and similar charges payable	24,443	26,0
		04
Short-term borrowings	17,187	18,0
		92
Accrued and other liabilities	57,510	62,4
		69
Total current liabilities	204,08	188,
	0	671
Total equity and liabilities	1,602,9	1,44
	07	2,388

(a)Match these explanations to items on the balance sheet and present the results for the year 2006

1)Amount JSC «Russian Railways» owe the bank;

2)Total investments of the company;

3)Fixed assets of JSC «Russian Railways»;

4)Amount of share capital of JSC «Russian Railways»;

5)Amount they owe their suppliers;

6)Amount their customers owe them;

7)Current assets minus (-) current liabilities;

8)Non-current assets plus (+) net current assets.

(b)Complete these sentences about JSC «Russian Railways» consolidated balance sheet. Use a preposition to / from / by / at

1)The amount they owed their creditors increased … 75,004m rubles … 96,289m rubles.

2)The dividend decreased … £28m.

3)Share capital and reserves remained steady… 1,707,751m rubles.

4)Taxation decreased… 24,443m rubles.

5)The amount their debtors owed them rose… 15,582m rubles… 21,070m rubles.

12. Read the following text and fill each gap with a suitable word from the box.

turnover debtors profit and loss account income

balance revenues creditors liabilities

The 1)_____________(GB) or income statement (US) shows 2)______________ and expenditure. It usually gives the figures for total sales or 3)_______________, and costs and 4)______________. The first figure should obviously be higher than the second, i. e. there should be a profit. Part of the profit goes to the government in taxation, apart is usually distributed to shareholders as a dividend, and part is retained by the company.

The 5)______________ 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 6)_____________, and shareholders’ funds. A business’s assets include 7)_______________ as it is assumed that these will be paid. Liabilities include 8)__________________, as these will have to be paid. Negative items on

financial statements, such as creditors, taxation, and dividends paid, are usually enclosed in brackets.

13. Find the accounting terms corresponding to the following meanings and give their Russian equivalents.

1)An amount of money that is owed but probably won't be paid;

2)The accounting value of a company (assets minus liabilities);

3)A legal right to produce and sell a newly invented product for a certain period of time;

4)The historical cost of an asset minus depreciation charges;

5)The amount a company pays for another one, in excess of the net value of its assets;

6)A legally protected word, phrase, symbol or design used to identify a product;

7)To accept that a debt will not be paid;

8)To deduct money from profits because of debts that will not be paid;

9)Products that are not complete or ready for sale;

10)The amount of money owed by customers who have bought goods but not yet paid for them.

14. Match the items with the entries in a Profit and Loss Account.

		Profit and Loss Account
			£000’s
		£	£
	(	Turnover
__	a)		00
	(	Cost of sales
__	b)		50
		Gross profit
			50
	(	Distribution costs
__	c)	0
	(	Administrative expenses
__	d)	5	05
			45
		Other operating income
			5
			00
	(	Income from shares in related companies
__	e)	5
		Income from other fixed asset investment
		0
		Other interest receivable
		0	5
			45
	(	Interest payable
__	f)		8
		Profit on ordinary activities before taxation
			27
		Tax on profit on ordinary activities
			09
	(	Profit on ordinary activities after taxation
__	g)		18
		Extraordinary income
		8
	(	Tax on ordinary profit
__	h)
			2
		Profit for the financial year
			30
		Retained profits from last year
			0
			70
		Transfer to general reserve
		0
	(	Proposed ordinary dividend
__	i)	30	90
	(	Retained profits carried to next year
__	j)		0