ACCOUNTING AND FINANCIAL STATEMENTS

MK UNIT 19 RB, p. 32-36

INTRODUCTION
enter data record transactions keep books/ledgers analyse financial records decide how to present financial records calculate profits, losses review & evaluate accounts

BOOKKEEPERS
ACCOUNTANTS AUDITORS

FINANCIAL REPORTING

ANNUAL REPORT

financial transactions (income & expenditure, debtors & creditors)

decision-making managers, government, shareholders, banks, investors

Chairmans statement Directors report Auditors report Three financial statements 1.Profit & loss account 2.Balance sheet 3.Cash flow statement

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)

BASIC TERMS
SALES REVENUE (TURNOVER) (money received from sales in a particular period) COSTS OF SALES (deducted from sales revenue) 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

THREE FINANCIAL STATEMENTS

PROFIT & LOSS ACCOUNT profitability BALANCE SHEET financial position of a firm at a particular time CASH FLOW STATEMENT liquidity

THREE FINANCIAL STATEMENTS

PROFIT & LOSS ACCOUNT revenue/turnover v. costs & expenses BALANCE SHEET assets/liabilities/owners equity CASH FLOW STATEMENT sources of funds/applications of funds (cash inflow/cash outflow) RB, p. 33, 34, 35

SORT OUT: current liabilities, revenue, equity, long-term liabilities, profit after tax, expenses, fixed assets, profit before tax, current assets, retained profit

P&L

BALANCE SHEET

P&L revenue expenses profit before tax profit after tax retained profit

BALANCE SHEET fixed assets current assets current liabilities long-term liabilities equity

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

WHATS WRONG HERE? FIXED ASSETS buildings vehicles cash CURRENT ASSETS stock machinery debtors

KEY: CASH, MACHINERY

WHATS THE HEADING?

CURRENT LIABILITIES short-term debt creditors accrued expenses dividends payable

LONG-TERM LIABILITIES long-term debt deferred income taxes

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

ASSETS

LIABILITIES

land and buildings accounts receivable cash and equivalents stock investments

accounts payable accrued expenses deferred taxes dividends long-term debt

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.

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.

WHATS MISSING? SOURCES OF FUNDS

I OF SHARES T PROFITS B FUNDS S OF ASSETS

APPLICATIONS OF FUNDS
P OF FIXED AND FINANCIAL ASSETS R EXPENSES I PAYMENTS T PAYMENT OF D

COLLOCATIONS - DICTATION

COSTS

Smanjiti: Poveati: Obraunati: Platiti/podmiriti: Procijenjeni: Neoekivani: Rastui:

COLLOCATIONS - DICTATION

COSTS Smanjiti: bring down, cut, lower, reduce Poveati: increase Obraunati: calculate, work out, figure out Platiti/podmiriti: meet, pay

Procijenjeni: estimated Neoekivani: unforeseen, unexpected Rastui: escalating, rising, increasing

COLLOCATIONS - DICTATION

PROFITS

Zaraditi/donijeti: Ugroziti: Reinvestirati: Zadrati:

COLLOCATIONS - DICTATION

PROFITS Zaraditi/donijeti: bring in, earn, generate, make Ugroziti: jeopardize, put at risk Reinvestirati: plough-back, reinvest Zadrati: retain

COLLOCATIONS - DICTATION

THE FIGURES Objaviti: Provjeriti: Falsificirati:

COLLOCATIONS - DICTATION

THE FIGURES Objaviti: announce, issue, release Provjeriti: check, examine, go over, go through Falsificirati: cook, manipulate, falsify, massage

COLLOCATIONS - DICTATION

FIGURE

Tona: Priblina: Sumnjiva:

COLLOCATIONS - DICTATION

FIGURE Tona: accurate, exact, precise Priblina: approximate, ballpark, rough, round Sumnjiva: deceptive, misleading , dubious

HW: Make sentences with the collocations above.