Business transactions and financial statements.

Special terms:

Transaction: A business dealing with a creditor, a customer, or others with whom an organization carries on business.

Negotiable Instrument: A device used in place of cash in a transaction. Checks and money orders are both familiar kinds of negotiable instruments. So are notes, which are written promises to pay a specific amount of money within a specified time.

Sales Invoice: business paper showing the description, quantity, and the unit total price of goods sold to a customer.

Assets: The resources owned by the business. Current asses include cash, as well as other instruments that normally can be concerted into cash or sold. Fixed assets are tangible assets, such salads, buildings, and machinery. Intangible assets include franchises, patents, copyrights, and goodwill. Other assets include investments, sachets stocks, and estate.

Liabilities: Are the opposite of assets; that is, they are what the organization owes. Obligations that must be paid within the current fiscal period are current liabilities, while those which are not due during the current fiscal period are long-term liabilities.

Owners Equity: The value of the owners share of a business. It can be expressed as what the business owes the owners, or the owners plain against the net assets or their rights in them.

Investments: Assets that the owners put into (invest in) the business.

Disinvestments: Withdrawal of assets from the business by the owners.

Ownership: There are three basic types of ownership. An individual proprietorship is an unincorporated business owned by one person. A partnership is unincorporated business owned by two or more persons. A corporation is owned by one or more persons. The corporation is a distinct legal entity that is separate from its owners. It is the major form of organization for largescale enterprises.

Accounting Period: The time covered by a summary of operating data, generally one year. The accounting period known as the fiscal year may be the some as the calendar year, that is, from January 1 to December 31. Or it may end on the last day of the natural business year-the twelve-month period that ands with the least active point in the annual operating cycle. A third possibility is to use some other selected twelve-month period. The fiscal year of the United States government, for example, begins on July 1 and ends on June 30 of the following year.

Depreciation: The gradual decline in value of a fixed asset, such as real estate (but not land) or machinery.

Vocabulary Practice:

1. What is a transaction?

2. What is a negotiable instrument? Give some examples.

3. What is a sales invoice?

4. What are assets? What are some of the different kinds of assets that a business may have?

5. What are liabilities? What are some of the difference between current and long-term liabilities?

6. What is the owners’ equity in a business?

7. What are investments?

8. What does disinvestments mean?

9. What are the three basic types of ownership in business?

10. What is the accounting period?

11. What are three possibilities for defining the beginning and the end of a fiscal year?

12. What does depreciation mean?

Ex. I. Read and translate the following text:

Date: 2014-12-29; view: 924