ACCOUNTING AND FINANCIAL STATEMENTS
Accountancy and related professions
accountants
Accounts Department, Accounting Department
bookkeeping - bookkeeperaccounting - accountantauditing - auditor
MK, p.95
Vital questions for any business
How much do we make? Do we have losses?
How much do we own? How much do we owe to others?
Where do we find cash if necessary? What do we use cash for?
Which financial statements answer the previous questions?
The Balance Sheet
The Profit and Loss Account -P&L(The Income Statement)
The Cashflow Statement
profit, net profit, loss, revenues, sales, cash flow, gross profit
1. ………………… profit which remains after all costs and taxes have been taken away
2. …………………amount of money coming into and going out of a company
3. …………………spending more money than it is received4. …………………total number of products that a company
sells over a period of time5. …………………money re ceived from selling goods and
services6. …………………money gained by selling something after
taking away costs7. …………………profit before taking away costs and taxes
Opposites? Debit Appreciation Debtor Profit Fixed assets/liabilities Long-term Tangible Accounts payable
Opposites Debit Appreciation Debtor Profit Fixed assets/liabilities Assets Long-term Tangible Accounts payable
Credit Depreciation Creditor Loss Current assets/liab. Liabilities Short-term Intangible Accounts receivable
Cashflow Statement (operations, investments, financing):
Inflows or Outflows?
Dividends paid Sales of property,
plant and equipment Income taxes paid Proceeds from issuing
shares Purchases of
property, plant and equipment
Receipts from the sale of goods and services
Repayment of debt
Financial statements (RB p.33-35)
Profit & Loss Account (P&L, IS):What does it show? What does revenue
include? What do expenditures include? What happens with profits?
Balance Sheet: 3 main pieces of information? Adjectives?Cashflow Statement:Where does cash come from and go to?
Financial statementsWhere can the following information be
found?1. How much does a company owe? What
does it own?2. What are its sales and related costs and
expenditure?3. What are company profits generally used
for?4. Where does cash come from? What is it
spent on?5. What does equity include?
Accountants may have a specific focus… (MK, pp.95/96)
• Management/managerial accounting• Tax accounting• Cost accounting
• Historical cost accounting• Replacement cost accounting
• ‘Creative’ accounting (!)
Listening, p.98 (MK)
Problem in valuation? Profit? Example? What is taken into
consideration?
Translate the following (RB, pp.33-35):
1. Dobit nakon oporezivanja2. Zalihe3. Dugotrajna imovina4. Dobit od redovnog poslovanja5. Ukupne kratkoročne obveze6. Zadržana dobit7. Materijalna imovina8. Prekoračenje računa9. Sumnjiva i sporna potraživanja10. Troškovi redovnog poslovanja11. Nematerijalna imovina12. Potraživanja13. Amortizacija14. Obračunato, a neplaćeno (adj.)
Assignment: Google’s annual report
http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm
SEC? What firm audited Google’s annual
report? Which financial statements are
included? Find the words covered in class.
Major risk factors? (Key words only)
Report writing
• Write a report on trends in Google’s assets in the period between 2007 and 2011. Use the information published on the Securities and Exchange Commission pages (see the slide before) and in the coursebook MacKenzie, I. (2010). English for Business Studies. Cambridge University Press)
.
Check your work
Layout: obligatory sections, graphic organization (e.g. Findings), name/date
Referencing the sources (Procedure) General features of each section:
content, clarity, concision, accuracy Language: phrases, voc., sp/gr
A few more terms used in accounting (MK, p.97): goodwill, share premium, common stock, pre-paid expenses, proceeds Source: Investopedia
1. costs such as rent, interest or insurance premium that are paid in advance
2. an intangible asset such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology
3. cash realized from a sale or received as a loan, after all commissions, expenses, fees, and taxes are deducted
4. the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share
5. a security that represents ownership in a corporation and gives rights to a company's assets only after creditors and preferred shareholders have been paid in full
Find the accounting terms that have the same meaning (AE & BE)
AGM Balance SheetAccounts Receivable
P&L AccountCommon Stock
CreditorsStatement of Financial Position
Additional Paid-In CapitalIncome Statement
Net Income Profit AMS (ASM)
Ordinary SharesDebtors
Share Premium Accounts Payable
How many accounting terms can you identify in the next slide?
Source: MacKenzie, I. (1995) Financial English. LTP