accounting and financial statements. accountancy and related professions accountants accounts...

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