New words:

1. Financial statement – финансовый отчет, синоптический (сводный) анализ доходности (предприятия), баланс.

2. Income statement – отчет о прибылях и убытках, отчет о результатах хозяйственной деятельности.

3. Balance sheet – баланс, балансовый отчет.

4. Operating statement – отчет о прибылях и убытках.

5. To deduct – вычитать, удерживать.

6. To report – докладывать, отчитываться.

7. To confirm – подтверждать, утверждать, санкционировать.

8. Financial condition – финансовое условие.

9. Financial position – финансовое положение.

10. To indicate – указывать, показывать, свидетельствовать, обозначать.

11. Guideline – руководящая линия, ориентир, руководство.

12. Placement – вложение, размещение.

13. Spacing – расстояние, расположение, расстановка.

14. Indention – абзац, отступ.

15. Heading – заголовок (таблицы, графы).

16. Single – отдельный, единый, общий.

17. Rule – правило, постановление, предписание, норма.

18. Line – линия, граница, предел.

19. To add – складывать, прибавлять, присоединять, приписывать.

20. Sign – знак, обозначение.

21. At the top – вверху.

22. Beneath – внизу.

23. Practice – практика, деятельность, обычай, метод.

24. Miscellaneous – разный (о статье в балансе).

25. Acceptable – приемлемый.

26. Alphabetical order – алфавитный порядок.

27. Liquid – ликвидный, быстрореализуемый.

28. Liquidity – ликвидность.

29. Ease – снятие ограничений, ослабление, легкость, свобода.

30. To convert – конвертировать, перестраивать.

31. Verify – контролировать, проверять, удостоверять, подтверждать.

Three financial statements commonly prepared by a business are the Income Statement, Statement of Owner’s Equity and the Balance Sheet. The transaction information gathered and summarised in the accounting equation may be used to prepare these financial statements.

The Income Statement, sometimes called the Profit and Loss Statement or Operating Statement, reports the profitability of business operations for a specific period of time.

The Statement of Owner’s Equity reports beginning capital plus net income less withdrawals to compute ending capital.

The Balance Sheet reports assets, liabilities, and owner’s equity on a specific date. It is called a balance sheet because it confirms that the accounting equation is in balance. It is also called a Statement of Financial Position or Statement of Financial Condition.

The purpose of the income statement, statement of owner’s equity, and balance sheet can be summarized as follows:

Statement                                            Purpose

Income Statement                                            Reports net income or loss

Statement of Owner’s Equity                         Shows changes in owner’s capital account

Balance Sheet                                                   Verifies balance of accounting equation

Guidelines for preparing financial statements

1. Financial statements follow a standard form with careful attention to placement, spacing and indentions.

2. All statements have a heading with the name of the company, name of the statement and accounting period or date.

3. Single rules (lines) indicate that the numbers above the line have been added or subtracted. Double rules (double lines) indicate a total.

4. Dollar or Ruble signs are used at the top of the columns, for totals, and beneath rulings.

5. On the income statement, a common practice is to list expenses from the highest to lowest amount, with miscellaneous expenses listed last. It is equally acceptable to list expenses in alphabetical order by expense account name.

6. On the balance sheet, assets are listed from the most liquid to the least liquid. Liquidity measures the ease with which the asset will be converted to cash. Liabilities are listed from most current to least current.

Tasks.

3. Define each of the financial statement.

4. Answer the following questions:

a. What financial statements do you know?

b. What does the Operating statement report?

c. What is the purpose of the Statement of the owner’s equity?

d. What does Balance sheet verify?

e. What does liquidity measure?

3. Find in the text the English equivalents to the following words:

начальный капитал, чистый убыток, подтверждать, рентабельность, прибыль, отчет, вычитать, указывать.