Scribd Logo
Upload

Welcome to Scribd!

  • SACHtieng Anh Ke Toan Kiem Toanwww - Thuvien247

    Uploaded by

    calvin406
    2K views77 pages
    Accounting is the recording. Classifying. Surnmanzmg. And interpreting of those business activities that can be expressed in monetary terms. A person who specializes in this field is an accountant. The bookkeeper's job is to keep an accurate record of financial data.

    Original Description:

    Original Title

    SACHtieng Anh Ke Toan Kiem Toanwww.thuvien247

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Accounting is the recording. Classifying. Surnmanzmg. And interpreting of those business activities that can be expressed in monetary terms. A person who specializes in this field is an accountant. The bookkeeper's job is to keep an accurate record of financial data.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    2K views77 pages

    SACHtieng Anh Ke Toan Kiem Toanwww - Thuvien247

    Uploaded by

    calvin406
    Accounting is the recording. Classifying. Surnmanzmg. And interpreting of those business activities that can be expressed in monetary terms. A person who specializes in this field is an accountant. The bookkeeper's job is to keep an accurate record of financial data.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 77
    la cudn sach song nga kém bai lip © cha gidi. Cée ban muin trau 461 thu quat nghigp vu Ke Tosn, Kiém Tosn. Cée ban dang ditge dio tyo trd thinh nhan vie ngit va ti wii | elooros tony Sst ssa! 16 000 4 TENE pf nod ¢ wate ToAs ‘The Language Of Accounting In English Dudes dat gate NHA XUAT BAN THONG KE Contents ‘Muc luc Trang * Unit 1: THE FIELD OF ACCOUNTING 7 Linh oye KE tod * Unit): BOOKEEPING % Hach zodn + Unit 3: BUSINESS TRANSACTIONS AND FINANCIAL STATEMENTS a Giao dich kink doank va bdo cdo tai chiah * Unit 4: BUDGETING 65 Dy thio ngan sdch * Unit $: COST ACCOUNTING 85 Ké todn gia thank * Unit 6: TAX ACCOUNTING 102 Ké todn vé Thué * Unit 7: AUDITING 14 Kiém todn * Unit 8: A CAREER IN ACCOUNTING ui Nghé Ké'todn * 8 phn bai dp tung dng cho 8 Unit * Bai dich sang tigng Viet ton bd cde bai doc (reading) eho 8 Unit, * C6 phn chi giditikhs bing Ting Anh cho mdi bat * C6 phan chai gi wr kbs dug mdi trang. UNIT one: THE FIELD OF ACCOUNTING Special Terms Accounting: The recording, elessfving, summarizing, and inter ppreting of chose business activities that can be exprested in monetary terns. The term accounting also refers to the principles that underlie this process. Accountancy is sometimes used as an alteriate expression, especially forthe practice of accounting. A person who specializes in this eld is an accountant Bookkeeping: The systematic recording cf Bnaacial information. The bookkerper does age design oF set up a record-keeping system, nor does he or she interpeet Snancial transactions, as does| the ‘accountant. The bookkeepers job is to keep an accurate record of, financial data, Financial records are frequently geferted to as the books of accoun Certified Public Accountant: Ordinarily abbrev.ated and referred to asa CPA. A CPA is an scecuntant who has passed a senes of exzrninations and received a cortfcate or license, entitling kim or her to tender an opinion, qualied or unqualife'. as to the fair presentation of the data in the statements, in the United States, the examinations ate held on a starewide basis. The British equivalent of a CPA is a chartered accountant Fiscal: Another term for financial; in uther wards, this ter matters of money ‘Cash Flow: The actual receipt and expenditure of cash by an organization, Organization Chart: A graphic layout that illustrates the rank and/or deparmental ard functional operations in a company oF organi aocountoney (ke teen rronetory on: én te lost (0): BRE oo: reccre (9). gh cnep iferpre! (Won dlen, pRan en book ke@pNT (n: AhN WEN KB ten CCherered Accountant (n): chuyen vin Ke tad de op (@ ANA rugT9 dung CPA CG MI) ns Management: The planning and direction ofthe policy and operations of an organization. The term refers both to the principles that spply to management and to the people who carry cut the fuetions of management. Auuit: 4 review ofan organization's Goancial records by an account: ant. persoa who performs an audit is an auditor Asset: Anything of value or use to an organization, This inchudes cash receivables, securities, property, and intangibles, such as good. will. Goodwill isthe extra value (such ass company's reputation and other intangibles) of a business not relcted :n ts Eeanetal statements, It is usually determined at the time of sale and purchase of a business. The word asset is Iequently wed in the plu Governmental ard Institutional Accounting: specialized branch of accounting that deals wth government agencies or nonproft organizations. Legal as well as Sindrcial matters are often involved. Cost Accounting: A branch of accounting that deals with th analysis of certain accounting valves. It is usally associated with the determination of the actual unit valve of an item manufactured by a company. Manageriol Accounting: A branch of accounting that deals with Bscal reports which are particularly useful to management in estab lishing operating policies for an organization. Controller/Comptrolier: The chief financial officer of an organiza tion. The two words are pronounced in the same way Vocabulary Practice 1 What does the term accounting refer to? What other term is used as an alternate? What is « person called who specializes in the fel? ‘What does bookkeeping refer to? 5. What are the differences between the duties of a bookkeeper and thowe of am accountant? pres ge con oguyen tde secuitles (chang non ner agenat coc) muds qUiM Wy nkanghble (wt ng thé et ettinied (os huge MO. 18 eh Indy use sac) Saxo som gbodwil: 918M Rung hit 4, What is cenifad public accountant? What abbreviation is commonly used? What isthe Britsh equivalent? What does the word siscal refs¢ to? 6, What is cash flow? What the purpose of an organisation chart? 8. What does the tenm management mean? 8. What isan audi’ Who pearms it? 10, What are the assets of a organization? What is goodwil? 11, What areas dees a governmental and institutional occountant dea with? What kind of matters may be involved? 12, What dies cost accountanting deal with? 13. What dees managerial accountanting deal with? 14. What is a controller or comple? How is each word pronounced? The Field of Accounting Accounting frequently offers the qualied person ap opportunity to move ahead quickly in today’s business world. Indeed, many of the Ineads of large corporations throughout the world have advanced to their postions from the accounting department. In industry, manage- ‘ment, government, and business, accountants generally start near the top rather than near the bottom of the organization chart. Manage ‘ment relies on the expert knowledge and experience of accountants (0 cope with the increasingly complet problems of taxes and cash flow Accounting isa baste and vital clement in every modern business It records the past growth of decline of the business. Careful apalysis of these results and trends may suggest the ways in which the business ites pubic occauntant (CPA): chuysnvién 6 todn dc lop. 8 aby ‘chang 159m dich vd 61a Kiem sot ven Oe bo. rmenagerent (n): Bon quén Irena: inn hut cam fow chu chuyéa Wanmet cope Ww) :duong ana Soykang eth am abc, Working wth caleuatr nas ow in the future. Expansion or reorganization should not be Jane without the proper analysis of rhe accounting information oducts and the campaigns to advertise snd sell them should tbe launched without the fefp of accounting expertise Seounting is one of the fastest-growing Selds in the modern Inusaness world. Every new stove, school, restaurant, or filing station— iuived. any new enterpnse of any kind—increases the demand for vwcountants, Consequently, the demand for competent accountants is ceverally much greater than the supply. Government officials often lave 4 legal background; similarly, the men and Women in manage ment often have a background in accounting. They re usally tanutiar with the methodology of finance and the fundamentals of aval dad Business administration sel accounting procedures were simple in comparison with 1045. The simple bookkeeping procedures of a hundred vray gh have been replaced in many cases by the data-processing supnter, The control of the scat affairs of an organization must be fe as possible in order to be effective In the past, a Bookkeeper kept the books of accounts for an ation: the present-day accountant’s job developed from the skkerper's job. Today. a sharp distinction is made between the “latnels unchaaged work performed by a bookkeeper and the more phasic ates daties of the accountant. The bookkeeper simply enters fats on financial record books; the agcountant must understand the ords so that he or she can analyze and interpeet ws, To explain the difference briely, the acesuntant looping system and interprets the data init, whereas the Inokheeper peaterms the routine work of recording Agures in the Ww books. Because interpretation of che figures is such an important part of the accountant’s funetion, accounting has often been described as ‘The field of accounting is divided into three broad divisions public, private, and governmental. A certified public accountant. oF CPA. as the term is usually abbreviated. mst pass a series of etaminations, after which he ot she receives a certificate, In the United States, the certfcation examinations are prepared and amine stered by the American Institute of Certified Public Accountant ‘The various states or other major governmental jurisdictions set aaduitiona! qualifications for residence, experience, and so on. The British equivalent of a CPA i called 4 chartered aecountant. CPAs can ofer their services to the public on an individual ‘consultant bass for which they receive a fe. la this respect anil many others. they are similar to doctors or lawyers. Like them, CPAS may be seltemploved or partners ina Rem oF they may be emploved ban accounting firm. Some CPAs perform work for corporations or femment offices and receive a aalary like other members of management. Nevertheless, they are still considered to be account ants. Tis not necessary to have a certificate in onder to practice ing. Junior emplovees in large firms, for example, are often scquiring sulfcient experience to take the examiations, Public accounting consists largely of auditing and tax services. An audit is a review of the financial records of an orsanization. ft is unvally performed at fed intervals of dime—peshaps quarterly. wally. or anmeully. And as the tax laws have erown it creasingly complex, not only corporations but also individuals have had to utilize the services cf accountants in preparing thelr tax forms and caleulating their tax lability. Business eaterpses. soverment agencies, and nonproft organizations all e either regularly or on a parttime bai, Many accountants work in goverament offices or for nonprofit organirations. These two areas are cftew jpined together under the tern zovernmenta] and institutional accounting, The two ate similar Seeause of legal restrictions in the way in which they receive and spend funds. Therefore, legal background is sometunes necessary for this type of accounting practice, Al branches of governmeat employ accountants, In the United States this includes federal, tate, and local governments. In addition, government-owned corporations in the United States and i many As rinschd gE raNG iutsceton (ny: pam wi quyén han sequite ) gan aus Lrae (ie eung emareseg satempoved Aen Hy ni GRID Wn PAB consulta (A)ANE ch/MEN, cow u ploy public aecountants ACPA asda books for + small busines ether countries have accountans on thir tas, ll of thee acco Sts lite tho in private inde, work on a sary basis Thy tnd to becme speciale in limited dads ke tansporaton or Plc Mites NonproSt organizations are of course in business for some purpose other than mating money. They include calf oranie: Ui lke ymphony orhetas or opera seit, carb orpantza tim mlgous guups er coportcowned reach organten Athough they are limited inthe manner which the can rae a spe hee fend, they sualybenelt fom special provisions inthe Tw Prva accountants ako called executive or administrative sont, hand the Baan record of busines Like thre who wa for he goverment or nonproteonpuations thoy are lared Cite thin ald few. The who work for manuictunog concer 1 called Industral iecountants Some lange orporations ‘np hundred of employees in their accountng oes Toe chick accounting ofcer of company i the contol, or compl, athe ot she B temetines called. Controle re respon ude maintaining the records of the company’s operations On the Nash data that have ben recorded, they measure the company’s syimptiiny ac twos San nhge gice hung ewan fo anh ati nine vhs) nants kwh doar tend (66 krynh nung Pete tag fe he manner: rang chang me pious ennai publi utltynganh phye wi cong céng R performance; they interpret the results of the operations; and they plan and recommend future action. This position is very close to the op of management. Indeed, a controller is often just astep away from, being the executive officer of a corporation. ‘One of the specialties within the private accounting feld is cost accounting, which Is chiedy concerned with determining the unit cost of the products the company manufactures and sells. For example, ita company manufactures radios, the unit cost of the product equals the cost of making each individual radio. The unit cost must include not oly the price of the materials in the product, but also other expenses, including labor and overhead. Without unit costs, manufacturing finns could not accurately determine the price they must sell their produets for in order to bring an adequate return on investment. ‘Many private organizations alto hire salaried accountants to perform audits. These people are sometimes chlled intemal auditor. ‘They are in charge of the protection of the firm's assets—the things of value owned by the company, including cash, securities, property, and ‘even goodwill. The internal auditor sees that current transactions are recorded promptly and completely. He or she’ alto identifies inefi- cient procedures of detects fraudulent transactions. He or she is unually called upon to propose solutions for these problems Managerial accountants are other specialists within the broad area of private accounting. In particular, they work with the kinds of nancial reports necessary to management for the efficient operation of the company, including budgets and cash flow projections. ‘A small business may retain the services of a CPA to perform all cor some of these functions. A medium-sized business may employ a staff accountant who does all of them. As companies grow, their accounting staffs become increasingly specialized. As we have noted, the big corporations eploy hundreds of people in their headquarters and branch offices for the purpose of fal administration. Many of the people who move ahead most rapidly in private organizations are CRAS. The simple fact of having passed the certifying examination gives them an advantage over those who haven't. “Teaching accountants have formal training and some practical ‘experience in the Beld. They often prefer to teach the subject, however, because of the security of a salaried position. They may work in a university or commercial school. Some teaching accountants also offer seminars in accounting procedures to different organiza- tions. chit (ochehd yu ‘emhead (n:ch ph aon 7 Unt coat 96 Thanh dom frouctders (ac) : gan on materal n):nguyén wet iby budget“): ngan sich | 138 An stcoumiog teacher conducting 4 as Many people have chosen accounting as a profession becaite of its many” advantages Many jobs ae usualy avalable, peimatly because the eduction and taining for accounting case has ot Kept pace with the demand fr acountng services; Once onthe ob private er governmental acauntants have security, snd they a0 (buully ren the chance to. move upward in the company ‘metres, a8 we have tated tothe top. Salaries for propie with Secours raining are usally good, even on the lower level and for hse who a tothe op of pofesin, they are corespondingy igh Corticd pubic accturtans av enjoy profesional status sar To th ef dotorso lawyers Ukely candi for succes ia the Beld typleally have an stent in busines they inst be able #0 eadestand the conditions tat indiate busines faces or fale. Atother prereysite i Thematical abify.Onee they have completed their eduction ‘mmr many patty ae open te them mw CPA cin begin a private practice of form a partnership seth other accountants Theo he goes into private or governmental conte ot she can specialize none ofthe branches within the sl shay costa toe accousting tll another posbility 4 ester fo) ngh8 ner corespondngly (edvs tueng xing (0) thes. rinp go incleate (v) bidu tN -biul scanty in) yo She prerequiste (rcigu ton quyat Hypcaly Gh teu bu. dig nih pementipin) eng chung phén “4 teaching career, although prac practical experience is usually pre red, Salaried positions with business or goverument offer strong secunty, since accounting Work isnot usually subject to either short term changes or long-term trends in the business ovele, Sciared, accountants are not as Ukely to be affected by lavoils or seasonal changes in the work load as are industrial or clerical workers Discussion 1, What does accounting frequently offer the qualiBed person? 2, Explain how accounting is a basic and vital element in moder business. 3. Why is accounting one of the fastest-growing Belds in the modern business world? 4. What are men and women in management usually familiar swith? How do modem accounting procedures compare with those used a odzed years ago? 6. Flow did the accountant’ jobs develop? How has it changed over the years? 7. Hlow does the job of a bookkeeper differ fram that of an accountant? 8. Why has accounting been deserbed as an art? 9. Whit are the three broad divisions in the ld of accounting? 10. What does CPA stand for? What do you think is the sig of the word certified? 11, In what cespect is a CPA similar to a doctor or a lawyer? Clefcal od: thube van pong precede (nth Rac signiizance ay cuen tong ——_festest- growing phat tea aman rth respect (nian tong lay off toh gin rhan e8ng) 15 2 21 What does public accounting largely consist of? Why do busi- nestes as well as individual citizens often need the services of 2 public accountant? In what way are governmental and institutional accounting similar? What kind of background is sometimes necessary for this ind of work? What government branches employ accountants? Do these accountants work on a fee or salary basis? What government ‘fice in your country or area employ accountants? What is a nonptoft organization? What 2re some specific examples? Flow are nonprofit organizations limited? What are private accountants also called? How are they similar to sgoveramental or institutional accountants? By what title isthe chief accounting officer of a company often called? What is he or she responsible for? Hlow does cost accounting differ from other areas of accounting? Why is it an important branch of the feld? What are internal auditors concemed with? ‘What is the name for an accountar’t who works particularly with the kinds of reports that are necessary to management? What reports do these include? How does the size of a company determine the kinds of accounting services it employs? Do CPAs have any advantages when they work in private accounting? What kind of background do teaching accountants probably have? Where might they be employed? cttzen cn) cong cin onprott shied Paaicusy (adv) ge blet acon (nnn nghigm. in tte Informal auctor: rn toon Wen determine: Sc nh, pho Peleg resporatoe (ag): cry teach nif 16 24, What are some of the advantages of accounting as a feld of employment? 25. What qualifications are necessary for success in the field of accounting? 26. What paths are open to someone who has completed an educa tion in accounting? 27, Why do salaried accounting jobs olfer security? Review A. Fill in the spaces in the following sentences with the appropriate word or phrase L The sets_up a complete system for recording and analyzing the financial afairs of an organiza- tion, whereas the —_ centers figures for fina cial transactions in the company’s records (CPA is an abbreviation for eons Tn England, the tecm for CPA 3. Another term for financial is 4. A CPA Is considered a professional nowadays, like a 5, A graphic layout that shows the rank and order of positions in a company is its 6. establishes policies and directs the oper: tions of an organization, A review of the financial records of an organization by an ‘accountant is called an ‘geehe (aq): 48 hoa ‘onaiyze(v): phan tch ronk (nda ve bge otfak (meng vide. sy VW D. ‘organization is not in business to make a _— accountants specialize in determning the pce for each item that is manufzctured of sold by a Business to. ___ are things of value that are owoed by a company. LL. The chief accounting officer called the 12 Pavate and goverment accountants usually work on a basis, whereas public accountants usally work on a basis. 13, ___aceountants specialize in the preparation fof reports, such as budgets or cash-flow projections, that are particularly necessary for the management of a company. List some specific jobs that involve bookkeeping skills. What are those skis? Whar duties are involved in such jobs? What are some of the qualif\eations, both technical and personal, that you believe 24 accountant must have in order to achieve success in us or her feld? How do these relate to the duties that are involved in accounting? ‘What do you consider to be the advantages and disadvantages of a career in accounting? ppocueto () chayin man hes v8 svelve (di hné! ph ee eo relate 99: co quanne. Kenquan projection (nk: sy get hogch dé én 18 BAI 1: Linh vuc Ké toan Ké ton thudng tao co hoi thang tién nhanh chéng cho nhiing ngudi c6é nang luc trong thé gidi kink doanh ngay nay. Thuc vay, cdc vi tr Linh dao cua nhiéu cing ty l6n trén thé gidi da dugc tién et ty bd phan ké todn. Trong cong nghiép, quan tri, chinh phi va kinh doanh, nhin chung, ké toan vien bit dau sur nghiép 6 vi tri gan véi cap cao nhat hon la cp thap nhat trong so dé 16 chuic, Ban Quan iri tin tudng vao céc chuyén gia ké toan c6 kign thuic va kinh nghiém dé duang diu véi cae vain dé ngay cang phic tap vé thué va chu chuyén tién mat Ké toan la yéu 16 co ban sng con ca moi doanh nghiép hign dai. N6 ghi lai sy phat trién va suy thodi cba doanh nghiép. Vie phan tich mot céch can than cac két qa va chiéu hudng c6 thé sé gai ¥ duoc gidi phap phat trign trong tuong lai. Su md rng hoa tai t6 chiic sé khéng thé dugc hoach dinh néu khong c6 phan tich dang din vé thong tin ké todn, va san phaim mdi va chién dich quang céo va ban hang sé khdng thé bat dau néu khong c6 su hd trg cia cac chuyén gia ké to’ K@ toa 1a mdt trong nhiing lanh vic phat trién nhanh hat trong thé gidi kinh doanh hin dai. Qué that, mdi Cua hang, Truéng hoc, Nha hang, hodc Tram dé xang - bat ky doanh nghiép mdi thudc moi lanh wyc ~ déu lim tang nhu cdu tyén dung ké toan vién. Hé qua la, nhu cau vé cin bé ké todn c6 nang luc nhin chung lén han nhiéu so véi cung. Cac thanh vién trong chinh phi thudng cé mot nén ting vé luat php; tuong ty nhu vay, céc qui Ong, qué ba trong Ban quan tri thuting c6 nén tang kién thac vé ké toan, Thuting thi ho kha thing thude cac 19 phuong phap Iy luan vé zai chinh va nhéing nén tang cia tai chinh va quan tri kinh doanh Cac qu tint thi tuc ké ton truée day don gidn han 0 vdi cdc huang php hién dai. Trong.nhigu ttng hap, ungehtoan _axeetniten #35 wares ety aid tat a8n ob end son mone (§) RANG NGS 26 it: An amount entered on the righthand side of an account Liability, capital, and income accounts are increased by crediting, tbat & by entering amounts in the right-hand columa, Credit is sully abbreviated CR Journal A book in which transactions are recorded. In double-entry -keoping, both sides of the transictiontoth the debrt and the credit sde—are entered in the journal. “Two type of journal page Ledger: A listing of detailed accounts, such as a record comprising the ‘accounts receivable of each customer. The general ledger isthe book used to lst all the accounts of an organization. Entries from all the journals are transfereed to the ledger at regular intervals, ‘usually monthly. This process is called posting. The ledger then serves as a summary of all the fscal activity for that period. ‘To Foot: To add or total the amounts in a columa. ‘Trial Balance: When all the transactions for a certaun period have bbeen posted and footed, the debits should equal the credits. The test to see if this isso is called a trial balance. Vocabulary Practice 1. What is a Hability? What ate some examples of liabilities? 2 What does capital mean? What other terms are often used instead Jounal in) Shachtadn chitét interval eshedng thet gon. doh Ky Nabconce in)idémiacdns pest) vox6 66 generalledger (r)s6 cal téngnge rect igh €8, va036 bén eb feat wcOng ing due ng slaremary (ny Ban tom rt 3, What is an account? Give an example of an account. What abbreviation is commonly used for account? 4. What is double-entry bookkeeping? How does it differ from singleentry bookkeeping? 5, What isa debit? What kind of accounts are increased by debiting? What abbreviation is commonly used for a debit? 6. What is a credit? What kind of accounts are increased by crediting? How is it commonly abbreviated? 7. What is 4 joumal? In double-entry bookkeeping, what is entered in the journal? 8. What is a ledger? What isthe relationship of a journal to a ledger? ‘What does posting mean? 9, What does to foot mean? 10, What is a trial balonce? Bookkeeping Bookkeeping is an esvential accounting tool. A small business or ‘company may employ only ane bookkeeper, who zecords all of the financial data by hand; large organizations may employ many bock- eepers, who use electronic and mechanical equipment for a large part of their work. Each organization has its own bookkeeping fequirements, but all systems operate on the same basic principles, ‘The bookkeepers themselves must be accurate, good in math, and meticulous that is, they must be very careful to record each detail in its proper place. ‘About 3,000 8, the Sumerians, the Egyptians, and other peoples of the Middle East developed the fist known business records. The results of tax collections, farming harvests, and the transactions of merchants were recorded by means of written numbers. The Romans, too, were prolife keepers of records. Indeed, Roman numerals were wed in many parts of Europe until the fifteenth century aD. The Seuble entry :hach toon Kp profe(ed: sn sinh nid, mde 35 BC. betore chs: mde cong nguyen accurate (W): chin xt AD: Ano Demin :sauesna nguyen —meticuous (ad): Hii. qua eee 28 Bookkeeper a work i a large ofce stimulus for modern bookkeeping came with the introduction of Arabic or HinduArabie, numerals and the decimal system in the twelfth century 29. Most people today use Arabic numerals ‘The two basic systems of bookkeeping ate double-entry and single-entry. The double-entry method was perfected by the merchants of Venice during the fifteenth century and is still used today. The basic principle of double-eatry bookkeeping is that every transaction bas a twofold effect. In other words, a value is received and a value is yielded or parted with. Both effects, which are equal in amount, must be entered completely in the bookkeeping records ‘An account is a record of the Snancial transactions that concern ‘@e item or a group of similar items. The account includes categories of nancial data for each area of interest during a specific period: the value at the beginning of a period, changes in value during the same period, and the value at the end of a period. The broad areas of interest can be labeled assets, abilities, and net worth. Income and ‘expense accounts are totaled at regular intervals, and the resulting profit or loss is posted to a capital account. mun ) 10¢ dung ch tric Yield (9 so et hwo 0 do. ko et werth gid nye arabic (n) end 8 A ROE ceategery (n):naNg og 29 Anything of value that a business or organization owns is ‘commonly known at an asset. Asset accounts include cash, which is the money on hand or jn the bank; furniture and fixtures; accounts receivable, the claims against customers that oWwe money; stock of imentar; office supplies; and many others that show what the organization owns, Debts owed to creditors are known as liabilities. If money is owed to.an organization or person for things or services purchased on credit this liability is called an account payable, Other liabilities include wages or salaries that are owed to employees, or taxes that have ot vet been paid. Te value af the business to the owner or owners is known a5 capital. Other terms used to designate capital are proprietorship, owner’ equity (usually abbreviated OE), ownership, or net wort, A separate account is kept for each asset, liability, and capital iter so that information can be recorded for each of them. Accounts are also maintained for income and for expenses, and like assets, abilities, or capital, these accounts are also entered in the fedge which is'a detailed listing of all the accounts of an organization, Entries from all the journals are tanuferced to the ledger at regular intervals, This process-called posting—is usually done monthly Journals, or books of original entry, are designed to record information about different transactions, including sales, purchases, cash ceceipts, cash disbursements, and many others, Journals have two for more columns to record increases or decreases in the accounts alfected by the transaction, and they often have space for a date and fan explanation of the transaction, All transactions affect at least fo accounts, Each transaction smust be analyzed to determine which accounts are affected, and Whether they should be increased or decreased. An entry made on the leftchand side or column of an account is called a debit, while an entry made on the righthand side or column is a credit. Debit, usually abbeeviated DR, at one time meant value received, or literally he ‘owes. Credit, usually abbreviated CR, meant valve parted with, or literally he trast. Tn modern bookkeeping, debit vefers only to the leithand aide of an account, whereas eredit refers to the right-hand ‘ile Some bookkeepers use a far right-hand column to Keep an up-to- ulate balance of the account ning eeursement (sev tu ite inh ropretonnp :quyén # hau talsén ounmnhg imquyénse hou Cty ——_“avantory (mang Hon Hho fate in) vot 28 cesignate (y):ani® 30 CASH AC (Gash Bank I Sues Ta rere rom the basic accounting formula, that Is, assets = licbiitles + owners’ equitv or capital), certain guidelines have evolved through rneral agreement and custom, Asset accounts are increased by debiting, that is, on ce let side, and they are decreased by crediting, that is, on the sight side. The opposite is true for liability and proprietorship accounts, which are increased on the credit side and decreased on the debit Side Ares = Liabilities Owners" Equity But ajCe Liability a/C Proprietorship A/C DRY cR ee pe] cH Income and expense accounts represent changes in equity. Income Iiereases proprietorship, while expenses decrease proprietorship. Income accounts are increased on the credit side and decreased on the debit side, while expense accounts are increased on the debit side and. decreased on the credit side, Expense A/C ORTCR. decrease (Vp gid at eB.muengain formule (mieang ME eveive tre Speeste (ns abu ae ngrich aL Since every transaction affects at least two accounts, atleast two ‘entries must be made in the journal. When Motgan’s Appliance Store, for example. sells a refrigerator for $260, the bookkeeper debits the cash account jastet) and credits the sales account (Income) by $269. On the day that Mr, Morgan pays his monthly rent of $500, the bookkeeper debits the rent account (expense) and credits the cash account (aset) by $500. Regularly and at xed intervals, usually monthly, vhe bookkeeper posts all the entries from each journal to the appropriate account in the general ledger. The bookkeeper then foots, ot totals, the colurins of each account; that i, he or she adds the amounts of the debits and credits and records the balance of each account. Since devits are ways recorded in amounts equal to credits, the debits and credits Should always equal each other. The test that determines whether the toval of debits equals the total of credits is called a tral balance, Ifthe accounts are not balanced, some error fus been made which the ookkeeper must nd and correct. The financial statements of a company, lke those that wil be discussed in the ext unit, belp management to evaluate and direct the operations of an organiza tion “The second basic system of bookkeeping, as_mentioned previously, is called the single-entry method. This method refers to ny system that does not iaclude the complete results of every transaction, The moat common type of single-entry bookkeeping involves recorts of cash, accounts receivable, and accounts payable. Many bookkeeping systems include journals and records for specif types of transactions. Special purchase books, for example, include invoice and voucher eegiters, Incoices are itemized state ments of merchandie sold to 2 customer; they list the quantity and the charges. Vouchers are bills received for merchandise or services One important, widely used journal isthe cash dicbursement register ‘whieh records the details of all checks written: to whom, when. how ‘much, and for what purpose, Another popular journal is the cash receipts journal, in which all payments received are recorded. ‘Bookkeepers are aso responsible for maintaining the records of a ‘soaypity including, of court, the computation of taxes that are to be ‘deducted and withheld, and the completion of government forms that lite tequited for tax and other employment purposes. In a small Company, the bookkeeper may also function as a cashier, as an assistant to the manager, oF in any number of clerical jobs. Larger siemice (ugh indnn tng Hod deduct (ys ensue Soushers(q) bn iah bigs nhan waned @: ot tialbaianee :c6n 8 td Ma Cleneat huge Ay Wy. aN BONG ‘compatotion fs en ten regstor (rye 28ei? 32 Firms have stalls of bookkeepers ranging from as few is two or three to several hundred. They often ase special forms and high-speed ‘computing and tabulating machines, but basic bookkeeping rules ave ‘the same, Regardless of the size of the operation, the bookkeeper is 3 key person in the organization's svitem of Rrancial information. Discussion 1. How do bookkeeping procedures in 4 large organization differ stom those sn a small one? ave the bale prnciges the mame oF different? ee A What are some of the basic requirements for a bookkeeper? 3. When were the first known business records kept? By whon ‘What kind of records were kept? 4. How did modern bookkeeping begin? 5. What are the two basic methode of bookkeeping? 6, When was the double-entry method introduced? By whom? What Is ts basic prinetple? 7. What is an aecount? What are the three categories of fuancial data listed in an account? 15, What broad arcas of interest is bookkeeping concerned with? 8. What isthe difference between ast asset and a liability? Give an example of each. 10, What i the term wed forthe value of a busines to its owners? ‘What other terms refer to the same concept? LL, What is a ledger? What kinds of accounts are entered in it? 12, What is posting? toulate (x8 thanh bang. cot ledger (ny 38 cA Dbookieerer ys ngs gtts6 soc 33 13, What inforenation i recorded in journals? 1H, On which side of an account are debits entered? On which side are credits entered? What do these terms mean literally? How are they commonly abbreviated? 15. For what purpose do some bookkeepers use a far right-hand columa if thete ledgers? 16, What isthe basic accounting formula? 17. How are asset and expease accounts decreased? How ase they ‘increased? (8. How are tability, capital, and income accounts decreased? How are they increased? 19, Desenbe the entries to be made by a bookkeeper for a furniture store when (a) a couch is sold for $300, and (b) when the janitor is paid his weekly salary of $175, 20. What is the process by which entries are made in the ledger? 21, What Is the purpose of footing, or totaling, the columns of an account? 22, What does it mean ifthe debits and credits in a ledger are not balanced? What js not included in single-entry bookkeeping? What type of record is commonly kept by means of the single-entry method? 24, What are some of the specific types of transictions that are frequently recorded by bookkeepers? 25, What are some of the other records that a bookkeeper often leeeps? 8 8. Why is a bookkeeper a key person in an organization? yung. vang lamer (i nguat een. ae 08g 34 Review A Match the phrase onthe let with the tatement onthe righ 2 Liablty — Something of vatue to an organization 2 Creat — The base record Ia ddobecntey bookeeping 2: Journal — Sumer ety. 4. Post The lef-hand Colum . of ap account 5: Footing — The wight hand cola af an socount 6 Account — The teat balance of the accounts 7. Aset ——~ A book of orginal cntries 8. Trial bilance The books hae tts all of the accounts. —— That which is owed by an organization, 9. Proprietorship, 10. Debit To transfer entries fom the journal to the 11. Ledger —— Totaling of adding colurans, 3 What type of account—asset, liability, capital, ‘expense~do you think each under? ‘of the following items should be listed 1. Office supplies in stock 2. Accrued taxes 3 Typewnter cena ‘# Instalment payments received 5. Cash in bank krstolment: phd fémBibn—acerue (¥): nh eh Ky ot stock ind ediandn rental Nba thud Joutnal (9:38 ki ton chat egy ven £8 phd ang 1 35 ‘oppropsato (od): hich nap . Check the appropriate bos—debit or credit—to show what the bookkeeper should do if he or she wants to: 1. Increase the payroll (expense) account 2. Increase the notes payable (liabilities) account 9, Increase the proprietorship account 4, Tnerese the invtony (asset) account 5. Tacense the sales incom) account 8 Decrease the owner’ equity account 7. Decrease the furniture and fixtures (asset) account. 8, Decrease the telephone (expense) account. 9, Decrease the sales (income) aecount, 10. Decrease the mortgage (lability) account. co RR. cR Describe in your own words the qualifications that a good bookkeeper should have. Do you think the kookkeeper is an important part of an organiza: tion? What kind of satisfaction would a person receive by working as a bookkeeper? sofetoction (9 tila ¥,1Ooky mertgage (ni: scbmeo Inventory (ry: nang tin kno BAI2: Hach toan Hach ton 1a mot cong cu ke todn cin thiét, Mot doanh nghiép nhé hoac mot cOng ty C6 thé chi thue 1 ké ton vién gud ghi chép may méc cdc dif kién Iai chinh bang tay. cae ts chtic In c6 thé thué nhiéu ké toan vid. nhiing nguii sit lung, thiét bi co khi va dign td trong phn lon eang viec cua ho. Méi 13 chuic c6 yeu céu hach toan ridng nbung tat cé he théing hoat dong giéng nhau vé cac nguyén tic co ban. Chinh cac ké toan vien phai chinh xac, gidi toan hoc va Wi mi: nghia la ho phai rat cin than dé ghi chép ting chi tiét vao ding vi tri cia n6. Khoang 3000 nam trude Cong nguyén, ngudi Sumerians, gual Ai Cap, va cc dan toc khac 6 Trung Dong da phat trién Ong vide lan dau tién dude biét dén ta ghi chép kinh doanh. Nhitng ket ia thuong budn dugc ghi chép bang cac con sO. Ngutti ta Ma ing la nhung chuyén gia liu gité sé sich. Thee ea, nhin sO La Ma da duge sti dung trén nhiéu ving lanh thd Chau Au cho dén (an thé ky 15 sau Cong Nguyen, Dong luc cho phuiang phaip hach wan bien dai audit hign khi chit s6 A-Rap hoac A- Rap-Hindu, nhung chit so va he thong thap phan trong the ky 20 sau Cong Nguyén bat du dugc git thiéu. Ngay nay, hiu hét moi ngudi su dung hé thong cha so A-Rap. Hai hé thor but toan don. Phuong phap hach ton but todn kép dugc hoan thign bdi céc thuang nhan d Venice vao thé ky 15 va vin duge sti dung cho dén ngay hom nay. Nguyén tc co ban cia hach toan kép [8 mdi giao dich cé anh hudng kép. Néi cach khac, thu thué, thu hoach mia mang va céc giao dich can ban vé hach todn [a bat fon kép va a mot gia tri duoc ghi tang va mOt gid tri ghi gidm hay khdu tr di, Ca hai tac dong (tang hoac gidm) c6 gid tri bang nhau phai dluge ghi chép day du trong s6 sach hach toan. Tai khodn (TK) la mét hd so ghi cc giao dich tai chinh vé mot hake mot nhém cac khodn muc gidng nhau. Tai khodn bao gém ca¢ loai di ligu tai chinh cia mdi khoan myc dugc theo dai trong mot giai doan nhat dinh : gia tri dau ky, gid tri thay déi trong ky va gid tri vao cudi ky. Cac khodn muc téng quat thang duoc quan tam c6 thé 1a tai san 6, tai san ng, va gid tri rong/vén chi sd hit. Cac tai khodn thu nbap va chi phi dugc téng hop theo dinh ky, va theo dé két qua hoat dong kinh doanhilai, 18) dugc hach togn vao tai khodn von. Bat ky gié tei mao thudc 86 hu cua doanh nghiép hay t6 chiic dugc goi la tai sn ¢6. Cac tai Khoan theo doi tai sain cé bao gém TK tién mat, 1a tién mat c6 sin hodc tién gi ngan hang: trang tri néi that va vat dung cé' dink; cc khoan phai thu, la cc khodn phai thu tir khach hang con ng; TK hang tén kho; van phong pham va nhiéu tai khoan khac thé hign cdc gi tri thude sd hau ca t6 chic. ‘Cac khoan ng phai trd cho chi ng dude biét nu la Tai sin No. Néu tien cn ng ciia 16 chic hay ¢4 nhan do mua chiu hang héa hay dich wy, céc tai sin ng nay disc gor Ia (a7 khodn phai trd, Cac khoan phai tra khac bao gém tién thudng hoac yang phdi tra cho nhan vién, hoac céc khoan thué chua nép. Gia tri ca doanh nghiép déi vai mot hay nhigu chi so hau dude goi la vén. Cac thuat ngi khéc thudng duoc st dung, dé m6 ti von gém sé hu chi doanh nghiép, vén cé phan {tude dude viet tat 1a OE - Owner's equity), quyén 38 hau Cty, hay gid tri tai san rong. Mot tai khodn ridng duge mé theo doi cho méi khoan muc Tai San C6, Tai Sin Ng va Vén 4é thang tin c6 thé duoc luu vao hé sa cho mi khodin muc dé. Cac tai khodn cing duge md theo dai cho thu nhap va chi phi, va cing giéng nh Tai sin C6, Tai sin No, hay Von, nhiing tai khodn nay cing duoc dua vao s6 Cai - ligt ké danh sch chi tiet tat c4 tai khoan cia mot t6 chile. Cae bat toan ti tat ca 6 nhat ky ching w dug chuyén vao sé Cai theo dinh ky. Qui trinh, nhu vay goi la hach toan dude thyc hign theo dinh ky hang thang $6 nhat ky chiing 1, hay sé séch ghi chép dt toan géc, duac thigt ké dé ghi chép théng tin vé cac giao dich bao gi ban hang, mua hang, phicu thu tién, phiéu chi tién, va nhiéu khoan muc khac. Cac sé nhat ky chiing ti c6 hai hoac nhiéu cot dé ghi chép s6 tang hay gidm trén céc tai khodn chiu anh hudng béi giao dich, va ching thudng cé khodng tring danh ghi ngay va dién gidi v8 giao dich. Tat cd cc giao dich anh hudng dén it nhat 2 tai khodn Méi giao dich phai dugc phan tich dé xée dinh nhiing tai khoan nao lién quan dén giao dich, va ligu chung dugc ghi ting hay gidm. Mot bit toan dude ghi vao bén trai tai khodn hoac Ot trai ctla mot tai khodn duge goi {8 but toan Nog, trong khi bat todn dude ghi vao bén phai hay cét phai goi la but ton C6. But toan Na, thudng dugc viét tt 18 DR, theo nghia cé la gid tri thu vao, hoac nghia den la anh dy ng. But toin Cé, thudng duge viet tat la CR, c6 nghia la gid tr dy di cho muc dich khac, hogc theo nghia den la anh dy tin thac. Tong phuong phap hach todn hign dai, phan No 4m chi dang dé chi bén trai cila tai khodn, trong khi phdn C6 dang dé chi phan ben phai tai khoan. Mot 36 ké todn vién sth dung them cot ngoai cing bén tay phai dé lu gitt s du tai Khodn duge cép nha - Tai khoan Tién Mat hae | Cr a (Cones [itn pti aan ae [C5277 [anh sti (oassse tt eor.06 | Thank ota ut nha son Some arn [tes [To00.0 Tien ban Rang e120 | Tu cng thic ké todn co bin, dé 1a, Tai sin C6 = Tai sin Ng + Von cé phan cc van ban hing dan dugc phat trién hoan thign thong qua cac théng lé va tip quin chung. Cac tai khodin thé hién Tai sin Cé duge tang lén khi ghi No, 1a ghi vao bén trai va gidm xuding khi ghi C6, vao bén phai TK. Qua trinh tron 1A ngugc lai déi véi cde TK thé hign Tai sin ng va Tai sin vén cd phan so hau cua doanh nghiép. Tiisin Gs, = Tsing + Vine phi TKTaisin CO —TKTAlsin Ng + TK Von shay dan nghit Céc tai khoan thu nh§p va chi phi biéu thi cho su thay déi vén 10 c6. Thu ahap Lam king vén 36 hak, trong khi chi phi lam gidm von 9 hau. Cac ti khodn thu nhap duge ghi ting vaio ben C6 va ghi gidin vao bén Ng; con cac tai khoan chi phi duge tang, ben ng va gidm 6 bén C6. Tk Chi phi Tk Thu ship. DRI CR ORICR, Do méi giao dich Anh hudng dé it nhat hai tai kho.in, it hat hai but todn phai duge ap trong sé nhat ky chung w: Ching han, khi Cia hang trang thiét bi Morgan ban 1 td lah gid 260 USD, ké todn vien ghi No vie tai khodn tién mat (TK Tai san C6) va ghi Cé vao tai khoan thu ban hang ithu nhap? so tién 260 USD. Vao mot ngay kia éng Morgan tra tién thué nha hang thang la 500 USD, ké todn vién ghi Na tai khoan chi phi thué nha (chi phi) va ghi C6 tai khodn tién mat (TK Tai san CO) 500 USD. Theo dinh ky, thudng 1a hang thang, ké ton vién nhap tat ca cae 36 lieu ty mdi sé nhat ky chting ti vao tai khodn thich hop tong sé Cai. KE ton vién cong dén xudng hay téng Cong, theo cAc cot cba méi fai Khon; co nghia la Ké toan vien cong céc 86 du Ng hay du Cé va két sé du cia mei tai khodn, Do cac khodn ghi No ludn bing vdi ca khosin ghi Cd; cac két sé du Ng va du C6 phai ludn bang nhau. Viec kiém tra dé xc dinh ting s6 No c6 bing téng $6 Cé hay khong dugc goi la kid tra can 56. Néu cc tai khodin khOng can, ké todn vien da mic phai mét vai 161 khi hach toan va do vay pha tim ra va digu chinh sai s6, Cac béo cao tai chinh ca mot Cty tung ty nhu nhiing béo céo duge ban tuan trong bai ké tiép gidp Bar quan tsi danh gid va dinh huéng su diéu hanh cua mot té chute H@ thding hach ton can ban th 2 nhu da dé cap d phan tric duge goi La phuong phép hach todn dun. He thing nay tham chiéu dén bat ky he théng ndo Khong bao ham day chi moi ket qué cia mdi giao dich, Kiéu hach toan dan phd bién hat gom ghi chép vé tién mat, cde khodn phdi thu va cic khoan phai tra. Nhiéu he thding ké' ton bao gém 36 nhat ky ching ta va hé su ghi chép cho nhiing giao dich cu thé. Chang han, cac sé sach mua hang chi tiét bao gém hoa don va bién lai. Cac hoa don la cde chiing ti ghi céc khoan muc hang hos da ban cho mot khach hang; ligt ké s6 huang va gid. Bién /ai Ia céc bién nhan vé hang hoa hay dich vu. Mot s6 nhat ky ching tt quan wong duge st dung rong rai fa s6 chi tién mat, 1a sé ghi chi tiét ve tat cd ede WY chi phi (Séc da duoc ky phat nhu: cho nguai thu hudng nao, khi nao, bao nhiéu va cho muc dich gl, Mét sé nhat ky chiing ti thuding duige sti dung khac la sO thu tién mat, trong dé ghi chép tt cd cic khodn tién thu duge KE toan vin ciing cé trach nhiém trong vige bao quan sé sich cia mot Cty, bao gém, di nhién, viéc tinh phan thué duoc kha tre va git lai, va hoan thanh cac bao bidu theo miu quy dinh cia nha nudc dé ké khai thué va lao dong. Trong 1 Cty rnhé, ké ton vien 6 thé kiém chiic nang thd quy, tro ly Giam doc va thy ky van phdng, $6 hiong cac ke toan vien trong céc cong ty 1én dao dong ty 2 hoac 3 dén vai tram nguti. Ho thudng c6 cac mau biéu riéng va sti dung may xi ly di Higu va bing béo cao va c6 tic do cao, nhung cic nguyén tac ké todn ca ban la gidng nhau, Ké todn vien ki ngudi chu chét trong hé thdng théng tin tai chinh cia mot t6 chic bat KE tim cB hoat long ctia 16 chic d6. 42 UNIT three : BUSINESS TRANSACTIONS AND FINANCIAL STATEMENTS. Special Terms Transaction: A business dealing with a creditor, a customer, or others with whom an organization cares on business. Negotiable Instrument: A device used in place of cash in a transac- tion. 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 2 specified time. Sales Invoice: A business paper showing the deseription, quantity, and the nit and total price of goods sold #0 a customer. Assets: The resources owned by the business. Current assets include ‘ash, as well as other instruments that normally can be converted into cash or sold. Fixed assets are tangible assets, such as land, ‘buildings, and machinery. Intangible assets include franchises, patents, copyrights, and goodwill. Other assets include invest: ‘ments, such as stocks, bonds, and real estate. Liabilities: Liabilities are the apposite of assets; that is, they are what the organization awes, Obligations that mast be paid within the ‘current fscal period axe current liabilities, while those which are ot due during the ewext fiscal period are long-term Wabili ties ‘Owners’ Equity: The value of the owners’ share of a business. Tt can ‘be exptessed as what the business owes the owners, or the owners’ claim against the net assets or their rights in ther. egotabie:c6 mné chuyén ann Kn insument in) €8ng@ ey Intangible sexéng thé thay ‘eblgaton (rb. nghla wy franchises sade quyén tom cn sy yeuséen ccopytigt bn quyén money oer len en te 43° Investments: Asets that the owners put into lavest in) the bust Disinvestment: Withisawal of asets f Owneip Trea thee base wes of neni, nid Propretorship is an unincorporated busines owned by one pesion A. pirtnehip is an Unincorporated business ovmed by two or more persons. 0 corporation is owned by one oF more persons. The corporat on i. dsin fegal entity that is separate From its owners. It isthe mayor form of organization for lrge- seal enterprises Accounting Perid: The tine covered by a summary of operating “kta, generally one year. The accounting period known as the cal yonr may be the same as the calendar vear, that's, ftom January 1 to December St. Orit mav end on the last day of the natural business year-the twelve-month period that ends with the least active point in the annaal operating evele. A third possbiity & to dee some other selected twelve-month period ‘The fecal year of the United States government, for example begins on fly Land ends on June 20 vf the following ver. Depreciation: The gradual decline in value of fixed asst, such as real estate (but not land) or machinery. the business by the Vocabulary Practice 1. What is a tansaction? | 2, What is a negotiable inetrument? Give some examples. 3. What i a sales novice? 1. What are assets? What are some of the different kinds of assets that a business may have? 5. What are Mabilties? What isthe difference between current and rn Wabaites? 15 What isthe owners” equity in 2 business? shes swede) art ha, ua docine (nse monsuy ten Loi ep: ceisan eng ——extete(n) bat dang sé nee bat fecal 2a): tube v8 1 may ee fey) Me a ta mechrery 4a What ate investments? 8. What does deinecsoment mean? 9. What ae the three basic types of ownership in busines? 10. What isthe accounting period? LL. What ate three possibilities for defining the beginning and the end of a fiscal yeor? What does depreciation mean? Business Transactions and Financial Statements Each business should have an accounting system best suited to its particular needs. The method used must provide the most effective means of recording, summarizing, and presenting appropriate accounting data for management and for others who have an interest jn the busines. The accountant iS responsible for the design and implementation ofthe accounting forms, the records, and the proced- lures, The accountant must also consider the present structure of the Dusiness as well as its likely course in the future. Modem accounting ‘machines and data-processing equipment have substantially iacreased the speed with which information can be made available to manage- ment When a business is being established, a system must be intro- duced that records all ransactions in monetary terms. Transactions are either internal, that is, within the company, or external, outside the company. Typical business transactions include the following: 1, purchase of merchandise, supplies, and services; sale of merchandise, receipt and disbursement of cash; receipt and issue of negotiable instruments, such as checks oF notes; squsition of property: incurring and paying debts; poricuer (ec): dc thu, tent monetary (oof hue Hen Interest) sv quan tam ‘nbstentaly (aa): v8 con bn implementation n) ay the ign sole (ny: hang ben .thu Ben Rang cocquition m:syemnngn ce ineurgye chu. mae 45 oe pep 7. transfer of merchandise from warehouse to store: and 8. use of supplies and services in the operation of the business. \ type low of merchandne requiring acecuntng transitions. ‘The dollar, of course, i the basic unit of measurement in accounting in the United States, and it i also widely used as a unit of ‘measurement in international eansactions. The dollar amount of eac transaction & entered im the accounting journals of the busiest Information about the nature of a transaction and the dollar amount that is involved generally appears first ott a business document, such as asales inusioe. Such documents are eseential references in accounting becanse they reflect alterations in the company’s Gnancial postion and operating performance Two basic financial statements are the balance sheet and the ‘operations statement. The balance sheet shows the frm's condition on the last day of the accounting period. It shows what the business owns anu what it owes to its creditors or its owners. A business i always jm a Sate of equilibrium. In other words, what it owns is equal to what it ‘owes This is expressed in the following accounting formula: Assets = Liabilities + Owners’ Equity meassrament (n) phen do baiance sheet 53n9 e828 oteraton (4): adn pd owe (Wine (Bp ng eke ‘squirm (ny: thang bing 46 i Fine Foods Corporation | 1815 Daundaga Parker Svracuse, New York Sold vo Sunmeeide Grocery Store Invoice No. 18.5978, 64 Roosevelt Road Date May 8 | Lerpoo, New York Order No. a Shipped Via NY. Lines | | Quantity Description Unit ‘Amourt | 50 cases Fine Foods Onion Soup 100 eases ‘Golden Apricot Nectar 20 eaves Fine Foods Peanut Butter eee A typical ales voice A statement of owners” equity shows what changes have occurred in regard to equity since the previous balance sheet as compiled. It shows, tor example, the money the owners have put in (investment) oF ‘aken out (disinvestment) of due business, as well as profits and losses from its operations ‘The operations statement is also referred to a6 a profit and loss statement oF an income and expense statement, I shows how much profit or loss was generated by the operations of the company during the accounting period. In this case, operations may be considered a8 sales of pools oF services. The profit from sales after the direct costs for producing the goods or services have been deducted is called g10%8 income ot grass profit. While income is produced, however, the Prof onde stclement bdo eaola 8 gross ncome tng In Income-crstexpersa statement: béo edo gress prom = téng al thu nhgp. eh phi cost hi deauct Wma. ns Perog in): hay . ger doon 47 Handy Sndy House and Garden Supplies ] | Balance Sheet | 1 March 14, 1958 i cue st oe 10900 | sure equ oxo Sora aie 8008 | A typical tance shee. lovey: hang t8n ho foccumuite (i) eh ay curent cset (nto adn ks long prepartinaurance ba hidm md muse 48 cere (8. Heh yo! tent Dang tena ens eprecition sy glam go business has certain other expenses—indirect costs related to the prodiuetion of that income, much as general or slling expenses. The balance that is left when these further expenses are deducted is called net income or net profit. ‘Central Setoaery Sto Statement of Partners’ Capital Year Ended December 31. 1978 Hawkins Robertson Exquity Balance January 1, 1978 $ 92.500 5 92.500 | Prot for Year 1978 70,000 70,000 Investment During Year ‘5000 ‘3.000 ars ord Les Withdrawals 37.000 37/000 Balance, December 31, 1876 3110500 31105500 ‘An Equity Satement fr 3 paeerbip. A third basic financial statement is the statement of chonges in {financial position, which shows an increase or decrease in working capital for the year and how this change arose. In some cases, this statement will show the change in the cash position rather than the cbange in working capital. The three basic types of businesses ia terms of operations are service, merchandising, and manufacturing, A service business gives advice or service exclusively. An accounting fin, for example, offers services, as does a television repair shop. The giant travel and tourist industry, one of the largest industries in the world, els secvices rather than goods. A merchandising business acquires. goods for sale to its customers. A neighborhood grocery stare may be considered a merchandising enterprise, and so may a huge mailorder and retail- coutlet company like SearsRoebuck A manufacturing business changes the form of goods by analysis, xs in an oil or a sugar refinery; by synthesis, as in a steel mill; or by asvembly, as in an automobile Inctect cost chi ph gtin 1B retolloutet aaliy bona sellng oxperves :chipnibenhong equ bolones sawn cocuet Indu d, rea vnunet (mc ay 180g hep 49 assembly plant or an electronics factory that assembles consumer products like television sets. Marjorie Breck CPA Tecome Statement Year Ended December 31, 1978 Fee Income 90,000 Expenses: Sales 33,000 Rent 2.000 Telephone supplies 1.000 Car Rental 1300 1500 PROFIT FOR YEAR ‘As Operation Statement fr a service Due. apps Gi Stop Income Statemert | Year Ended December 3, 1076 sales Cost of Goods Sold GROSS PROFTT ON SALES 175.000) Expenses: Selling ‘Administrative [NET PROFTT FROM OPERATIONS ‘An Operation Sttement for « merchandising use. Copies of the various statements described above, together with the financial and operating data in the accounting records, are sent to owners, management personnel, labor unions, appropriate govern- ment bureaus, creditors, and the general public. Reports intended contin: gc merchandle(y): bun ban (F058 pro: 1bng ha fee (10 phi én thd Kao 50 only for wse and dstsibution within the company on parts or phases of the business are also prepared geriadicaly from the nano records 4 cash report. for example, may be requted daly by some companies, but only weekly or monthly by others +A body of principles and concepts underlies the practice of accounting. These concepts together form a general guide to the accounting profession. Fist, an accounting system snst. provide consisteney in the accumulation and recording of Gaancial Gata A minture of diferent systems does not give 4 true picture of the financial affairs of an organization. Second, an accounting. system mast make it posible to compare the data ised to management government, and the public. This concept i called compara, ae without i there would be no firm bass on which to tax a company to ivest i it, oF even to manage it. Each of the groups intereted ina company would otherwise receive a diferent picture oft financial alfa. Third, an accounting system must pride the basis for attving 4 decisions and solutions in handling the operational and Boancial problems of the organization, Without this decision-making base, most companies would be unmanageable. There would, for instance, bbe uo way of pinpointing trouble areas within the compauy. Certain assumptions undedie all accounting activity. Although accountants may disagree over the value of many rules of practice and Procedure in their Geld, there are some asmunptions om which they almost universally agree. One of them i the idea ofthe business a3 accounting entity, independent of its owners for accounting purposes. This & similar to the concept of a legal entity that i embodied in incorporation, A corporation has some of the legal rights and sbligations of a singe individual. Another common assumption is that money server as the unit of measure to be wed for recording and reporting transactions, This provides a common denominator for past, Present, and future transactions. The concept is similar tothe one that makes mathematic the common language of scence. Stil another commonly held asrmpion is that there is a basic accounting period, that an interval of time for which an income statement is prepared Without using specific interval, there would be no basis for ills- trating the rate of change in the company. The accounting period in other words, a kind of busines calender Another standard that is generally accepted in the profession i that of objective evidence. Accountants need verfable evidence just as scientists do. In the case of accountants, the evideace consists of periodically (ocd) én hon cesumption (rss the nbgn consistency (nh hdr rh lembogy (v:hign than accumuotion i: a en iy denominator (9): muss ( spaces (alam eas8 cho 51 business papers or other records for any transition. This standard {nme always be univerallyappled, nowevee,beease there 2 Sons inthe racic of accounting when objective evedence 09% false Accounting for depreioton for example, mst be compiled ate tas ofthe aecountants udgnent. but thin the guidelines speciied in applicable tx codes. Discussion 1. What kind of accounting system should each business/have? What should the method provide? What is an accountant responsible for in setting up a system? 3. What kind of equipment can be utilized where speed Is impor tant? 4. How ore transactions recorded in accounting systems? ‘5. What are some typical business transactions? Are all of them outside the organization? 6. Whats the unit of measure in accounting in the United States? Is it wed anywhere else? ‘What is entered in the accounting journals of the business? Where does this information usually appear frst? 8. Why are business papers such as sales invoices considered cesential references in accounting? 9. What are two basic financial statements in a business? 10, What does the balance sheet show? 11. What is the formula that expresses a state of equilibstum for a business? 12, What docs a statement of owners’ equity show? sales figures are adjusted for various reasons: some merchandise 's retumed for credit: a small but significant volume is unusable because of spoilaye or damage; and furthe! adjustment is necessary to account for ullowances or ducounts. Allowances are spevial price adjustments tor vertain customers: discounts are prices that are generally reduced. as when a store has a sale. All ofthese factors qnsst be incluced in a complete sales budget. During changes in the busts cvele, such as Infarionary perids or recession. the principle ot deabibty becom extremely impoitant. Prices are changed and allowances or dseeuns disappear or rise, depending on which change vounveracts the adverse factors in the business cycle. ‘The “mirror image” of the sales budget is the purchases bude, which is, of course, the budget for the goods that the business will have to buy frst in order to sell. The purchases budget is prepared after the sales budget is completed and after the esisting inventory ox goods for sale has been evaluated. The volume of purchases, the init ppnces, and the purchase mix all elect the estimates inchuded in the sales budget, The estimated prices for purchases are strong] influenced bv the pot objective incorporated in the ales plan. The volume of parchass that i budgeted depends on the estimated sales volume. This is denved in turn from external and internal business trends that are expected to influence the enterprise, Contracts are important documests in the preparation of budget cstimates. A contract with a supplier, either # manufacturer or a wholesaler. may be the bass for estimating snit costs. If the contract lapses, however, it may be renewed at « higher price level or a new source of supply may be aecessary—ayain, often at a higher price Contracts to which the compeny itself is not a party are often Laken into account. It or example. 4 ralroad labor-management contract slue to expire, sny company that obtains its goods by rail Uansporta tion must anticpate the elfects of a posible strike. Trushing as ar altemate forin of shipment may lead to higher prices or t0 other ‘complications, sich as reduced or delayed shipments Aaniicart ocd: quan tong. cong chs _tacter (aime tS lspotogejiny avlemnng [seus maton counteractivn: cng ‘expe (hath ke “onticiate Wy: mey me. Soon muse DebderwanT 23 Cau we font) A ales budget worksheet. n ‘ALL PURPOSE FURNITURE COMPANY | PROJECTED SALES BUDGET For the year ended January 311977 x | | PROJECTED INCAEASE uo y DEPARTMENT ——rgrsSaLes “foyr'saces (OeGHEASE) Ino. 1 Livingroom 213300 seo “283 | INo. 3 Oimingroom 137936 Ino. 4 Outdoor 85.725, INo.§ Oice 220 | [No.6 Restaurant ang Hotei Syga50 Tora, si asaa9s 1 completed ler badge, ‘The preparation and competent execution of a purchases budget often means the diference between business succes ot fare, Lites inventories Iing idle in warehouses dain the resources of y cota establishment. All or most of the merchandise must be old by the close of a certain season. This i particlaly ue of retalers ch clothing stores n which fasion plays an mpovant part. The tating of the purchases called for in the budget in suck cases ciel The Liming should be coordinated withthe sales budget bectue bayes need certain amount of lad fine to acquire the merehandee. Losd tine i the peed that elapes between onde merchandise pli irae le taking eave of sales and purchuns, the enterprie must caleuate the expenses if cunhacting the halves. Ths beet & commonly fered to as the operating vapenses budget tthe cae of 3 etal establishment, it conse of to parts one for those expenses which ae incurred in veling the merchandise, and one for general nd idminsiratve expenses. The estimates of sales and geneal expense sre lly prepared encthy The preparation ofthe operating expenses budget reflects how important ii for budgets tobe based on well deine! organization lines. Oni in this manner is i posable to fx responsiblity for incuring operating expense. The sles budget and the purchases ke (oo 8 ending timing : chon ain | etain >; tauna0 re We deine vach 6 coordinate (Vi: phéinopséo x8 incur Wagan ens line (9: dng 18), chine sech cca: 16h ‘budget must be used in formulating the operating expenses budget because these tivo major activities provide the justification fr the size of the selling and administrative expenses. Companies other than retail businesses often break down their operating expenses into different categories, such as production, reseatch, development, sles and advertising Once the sales budget and the operating-expenses budget are prepared, the acccuntant is ready to determine the breuk-zven point ‘The break-even point is the minimum volume of sales the company needs to have, given the estimated operating expenses, in order not to ‘incur a loss. The accuracy of the break-even point depends an the skill with which the operating expenses have been estimated ‘The cash budget is somewhat different from other budgets, The other budgets are prepared on an accrual basis; that 1s, expenses are estimated for the period in which they ate incurred and income is calculated for the period in which it is earned. These periods may dill from those in which actual cash is expended or in which cash payments are received. For example, a company's accounting period tends on September 30, the last day of the third quarter. On September 28, the company orders a large amount of ofice supplies. On an accrual bass, the purchase is shown in the third quarter the quarter in which the espense is incurred, even though payment for the purchase is not ordinary made until the fourth quaster. The same is true of credit sales. Those mae near the end of an accounting period are_probably not pad in cash until the following accounting period, ‘The cash budget, on the other hand, is prepared on a cash busis, ‘estimating the accounting petiods in which eash rust be paid out of when it will be received. When preparing the cash Ividget, it is important to know what has been estimated in the sales. purchases and expenses budgets in regard to receipts and disburseinents they will be summarized in the eash budget. Outstanding obligations at the beginning of the budget period are taken into account, and so are expected receipts from investments and collectible receivubles that are expected to be received in the new accounting period The cash budget is often prepared each month, It can then be revised each succeeding month, incorporating new factors that afect the cash slow of the business. A company must know how much cash ft has on hand to meet its obligations or to enable it to avoid ‘committing itself to obligations that it cannot meet fonuscte (0: céng tite ‘biigotton (nh ng Bh cers. nn en Ga | Fecenable :céc khodn phat hs ‘The estimated costs for new additions to plant facilities, or for replicement or improvement projects for the company’s Bed assets, make up the capital-expenditures budget. This budget may reflect « portion ofa long:term planning project for this type of expenditure. A company may, for instance, have a Gve-year plan to improve and expand its plant facilities. The annual budget would then show only. the part of the total amount to he spent during that particular year, This budget should therefore state whether changes in the rate of business activity will affect the long-term plan. For the benefit of ‘management, the budget should indicate whether factors such as, increased dettand would make it desirable to speed up a long-term plan to expand production capacity; or, om the other hand, whether a Feduction in business would make i desirable to slow down expansion or even stop it entirely. Any significant change from the preceding Bscal year should be discussed when the budget is presented. These diftrences can be expressed in a percentage of positive of negative change over the previous year or the last few Bscal years. Discussion 1, What does budgeting involve? What is its primary objective? What is the customary accounting period for the budget? When ‘can a budget be reviewed or changed? 3. What is included in the nancial forecast? What can a flexible master budget be used for? 4. What kinds of activities are included in a business involved in retail trade? For which of them wouht budgets be prepared? 5. What ae the important entries in the sales budget? What else ‘must be added if the business sells more than one item? 8 Whit items could be grouped to form a sales department in a furniture store? What are some ofthe different budgete that make up the overall sales budget? foctty (ne phucng en. adukén ecto (V:chiche BHT. ra de plant) sta eirabe at noo speed up ay mont stote nl ré. yen bs \ 1s. 16. ‘Whea do sales figures have to be adjusted? When does the principle of fesbiity become important regarding a sales budget? 3 be considered the “mirror factors aze involved in its Tn what way can the purchases buds mage” of the sales budget? Wha preparation? What are important influences on the purchases budget? 1m what ways are different kinds of conts budget estimates? Give examples ets important in making 3. How can a purchases budget have an effect on the success or failure of 9 retail inn? What does the operating-expense: budget account for? What does it consist of in the case of a retaii establishment? Why should budgets be based on well-defined organizational lines? What isthe break-even point? When can it be determined? (On what kind of basis are the sales, purchases, and operating. ‘expenses budgets prepared? Give an example, How does the cash budget differ from these other budgets? What figures are summarized in the cash budget? What else does it take into account? ‘When isthe cash budget often prepared? ‘What vital information does a cash budget provide for a compa- ‘y's operation? What makes up the capital-expenditures budget? What dees this budget show in relation ta long-term planning? franor mage sinh nh phan chi exeakeeven pond: aaém od wn fetal establitment cosobénié —puichaae budget ngdnsdch bn hong +3, Wiat should the capitalexpenditures budget indicate for the benefit of management? 24 How con significant changes from previous performance be expressed? Review A. How would the following factors iluence operations for the ‘busines indicated? 1. Rail stike~retail sales business. 2. Change in price of gold—jeweler 3, Chusally bad weather—grocer 44. Sudden large demand for « new style of clothing-department Discovery of contamination in canned goods of a certsin brand—food processor, 6. Discovery of a drug that would provide & cure for the common cold=drugstore. Discuss the way in which a flexible budget could sorb the impact of each of the above. B. Name the types of enterprises on which the following factors would have a budgetary eifect. 1. Refusal of customers to accept and buy a new style of clothing Unfavorable evaluation of an appliance by a consumer 3. A trucking strike. ontamnaton (sum ahiém bén—aoretypnit. IS cus vation (

    You might also like