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ACCOUNTINGAND FINANCIAL

STATEMENTS

MK UNIT 19

RB, p. 32-36

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INTRODUCTION

BOOKKEEPERS

ACCOUNTANTS

AUDITORS

enter data record transactions

keep books/ledgers

analyse financial records decide how to present

financial records

calculate profits, losses

review & evaluateaccounts

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FINANCIALREPORTING

financial transactions

(income & expenditure,

debtors & creditors)

decision-making

managers, government,shareholders, banks,investors

ANNUAL REPORT

Chairmans statement

Directors report

Auditors reportThree financialstatements

1.Profit & loss account2.Balance sheet

3.Cash flow statement

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BASIC TERMS

ASSETS(own) LIABILITIES(owe)

CREDITORS(accounts payable, i.e. not paid at

the time of purchase but expected to be paid out)DEBTORS(accounts receivable, i.e. expected to

be received in the near future)

INCOME(receive payments)

EXPENDITURE(make payments)

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BASIC TERMS

SALES REVENUE (TURNOVER) (moneyreceived from sales in a particular period)

COSTS OF SALES(deducted from salesrevenue)

GROSS PROFIT SELLING, GENERAL AND ADMINISTRATIVE

EXPENSES(deducted from gross profit)

NET PROFIT (NET INCOME, BOTTOM LINE)

MK, p. 95, VOC 1-4, RB, p.32

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THREE FINANCIAL STATEMENTS

PROFIT & LOSS ACCOUNT

profitability

BALANCE SHEETfinancial position of a firm at a particulartime

CASH FLOW STATEMENTliquidity

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THREE FINANCIAL STATEMENTS

PROFIT & LOSS ACCOUNT

revenue/turnover v. costs & expenses

BALANCE SHEETassets/liabilities/owners equity

CASH FLOW STATEMENT

sources of funds/applications of funds(cash inflow/cash outflow)

RB, p. 33, 34, 35

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P&L BALANCE SHEET

SORT OUT:

current liabilities, revenue, equity, long-termliabilities, profit after tax, expenses, fixed assets,profit before tax, current assets, retained profit

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P&L BALANCE SHEET

revenue

expenses

profit before tax

profit after tax

retained profit

fixed assets

current assets

current liabilities

long-term liabilities

equity

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TRANSLATE IN CROATIAN

PROFIT & LOSS ACCOUNT

Sales revenue

Cost of sales

Gross profit

Selling, general and administrative expenses

Earnings before interest, tax, depreciation and amortization

Depreciation and amortization

Earnings before interest and tax

Interest expenses

Income tax

Net profit

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FIXED ASSETS CURRENT ASSETS

buildings

vehiclescash

stock

machinerydebtors

WHATS WRONG HERE?

KEY: CASH, MACHINERY

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short-term debt

creditorsaccrued expenses

dividends payable

long-term debt

deferred income

taxes

WHATS THE HEADING?

CURRENTLIABILITIES

LONG-TERMLIABILITIES

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SORT OUT:

accounts payable, accrued expenses, dividends,stock, accounts receivable, land and buildings,

investments, cash and equivalents, deferred taxes,long-term debt

ASSETS LIABILITIES

Source: MacKenzie, Professional English In Use,CUP

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ASSETS LIABILITIES

land and buildings

accounts receivable

cash and equivalents

stock

investments

accounts payable

accrued expenses

deferred taxes

dividends

long-term debt

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COMPLETE

Tangible a.. have a phy.. existence, you can

tou.. them. Over a period of time they lose their

value or dep..te.

Intangible assets include br names, pat.,

and tra.. mar . Amtion refers to spreading

an intangible asset's cost over that asset's useful

life.

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COMPLETE

Tangible assets have a physical existence, you

can touch them. Over a period of time they lose

their value or depreciate.

Intangible assets include brand names, patents,

and trade marks. Amortization refers to

spreading an intangible asset's cost over that

asset's useful life.

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WHATS MISSING?

SOURCES OFFUNDS

APPLICATIONS OFFUNDS

I OF SHARES T PROFITS B FUNDS S OF ASSETS

P OF FIXED ANDFINANCIAL ASSETS

R EXPENSES I PAYMENTS T PAYMENT OF D

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COLLOCATIONS - DICTATION

COSTS

Smanjiti:Poveati:

Obraunati:

Platiti/podmiriti:

Procijenjeni:

Neoekivani:

Rastui:

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COLLOCATIONS - DICTATION

COSTS

Smanjiti: bring down, cut, lower, reducePoveati: increase

Obraunati: calculate, work out, figure out

Platiti/podmiriti: meet, pay

Procijenjeni: estimated

Neoekivani: unforeseen, unexpected

Rastui: escalating, rising, increasing

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COLLOCATIONS - DICTATION

PROFITS

Zaraditi/donijeti:Ugroziti:

Reinvestirati:

Zadrati:

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COLLOCATIONS - DICTATION

PROFITS

Zaraditi/donijeti: bring in, earn, generate,make

Ugroziti:jeopardize, put at risk

Reinvestirati: plough-back, reinvestZadrati: retain

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COLLOCATIONS - DICTATION

THE FIGURES

Objaviti:

Provjeriti:

Falsificirati:

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COLLOCATIONS - DICTATION

THE FIGURES

Objaviti: announce, issue, releaseProvjeriti: check, examine, go over, go

through

Falsificirati: cook, manipulate, falsify,massage

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COLLOCATIONS - DICTATION

FIGURE

Tona:Priblina:

Sumnjiva:

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COLLOCATIONS - DICTATION

FIGURE

Tona: accurate, exact, precise

Priblina: approximate, ballpark, rough, round

Sumnjiva: deceptive, misleading , dubious

HW: Make sentences with the collocations

above.