Topics for students of accounting
Topics for students of accounting
Text #1
The accounting equation
Бухгалтерская сбалансированность
Accounting is often said to be the language of business. It is used in the business world to describe the transactions entered into by all kinds of organizations. Accounting terms and ideas are therefore used by people associated with business, whether they are managers, owners, investors, bankers, lawyers, or accountants. As it is the language of business there are words and terms that mean one thing in accounting, but whose meaning is completely different in ordinary language use. Fluency (свобода в овладении предметом) comes, as with other languages, after a certain amount of practice. When fluency has been achieved, the person will be able to survey (исследовать) the transactions of business and will gain a greater insight into (глубже вникать в) the way that business is transacted and the methods by which business decisions are taken.
The actual record-making (ведение записей) phase of accounting is usually called book-keeping. However, accounting extends far beyond the actual making of records. Accounting is concerned with the use to which these records are put (это то, для чего предназначены записи), their analysis and interpretation. An accountant should be concerned with more than the record-making phase. In particular he should be interested in the relationship between the financial results and the events which have created them. He should be studying the various alternatives open to the business, and be using his accounting experience in order to aid the management to elect the best plan of action for the business. The owners and managers of a business will need some accounting knowledge in order that they may understand what the accountant is telling them. Investors and others will need accounting knowledge in order that they may read and understand the financial statements issued by the business, and adjust their relationships (строить свои отношения) with the business accordingly.
Probably there are two main questions that the managers or owners of a business want to know: first, whether or not the business is operating at a profit; second, they will want to know whether or not the business will be able to meet its commitments as they fall due (выполнить взятые обязательства), and so not have to close down owing to lack of funds. Both of these questions should be answered by the use of the accounting data of the firm.
The accounting equation
The whole of financial accounting is based on the accounting equation. This can be stated to be that for a firm to operate it needs resources, and that these resources have had to be supplied to the firm by someone. The resources possessed by the firm are known as Assets, and obviously some of these resources will have been supplied by the owner of the business. The total amount supplied by him is known as Capital. If in fact he was the only one who had supplied the assets then the following equation would hold true (будет справедливым):
Assets = Capital
On the other hand, some of the assets will normally have been provided by someone other than the owner. The indebtedness of the firm for these resources is known as Liabilities. The equation can now be expressed as:
Assets = Capital + liabilities
It can be seen that the two sides of the equation will have the same totals. This is because we are dealing with the same thing from two different points of view. It is:
Resources: What they are (Assets) = Resources: Who supplied them (Capital + Liabilities)
It is a fact that the totals of each side will always equal one another, and that this will always be true no matter how many transactions are entered into. The actual assets, capital and liabilities may change, but the equality of assets with that of the total of capital and liabilities will always hold true.
Assets consist of property of all kinds, such as buildings, machinery, stocks of goods and motor vehicles, also benefits such as debts owing by customers and the amount of money in the bank account.
Liabilities consist of money owing for goods supplied to the firm (которые фирма должна за поставленные ей товары), and for expenses, also for loans made to the firm.
Capital is often called the owner’s equity or net worth (собственный капитал или чистый капитал).
Text #2
The asset of stock
Средства в запасах
Goods are sometimes sold at the same price at which they are bought, but this is not usually the case. Normally they are sold above cost price (цена, в которую они обошлись), the difference being profit; sometimes however they are sold at less than cost price, the difference being loss.
If all sales were at cost price, it would be possible to have a stock account (счет запаса товаров), the goods sold being shown as a decrease of an asset, i.e. on the credit side (по кредиту счета). The purchase of stock could be shown on the debit side as it would be an increase of an asset. The difference between the two sides would then represent the cost of the goods unsold at that date, if wastages and losses are ignored (если товарные потери и убыль не учитываются). However, most sales are not at cost price, and therefore the sales figures include elements of profit or loss. Because of this, the difference between the two sides would not represent the stock of goods. Such a stock account would therefore serve no useful purpose.
The Stock Account is accordingly divided into several accounts, each one showing a movement of stock. This can be said to be:
1. Increases in the stock. This can be due to one of two causes.
(a) By the purchase of additional goods.
(b) By the return in (из-за возврата) to the firm of goods previously sold. The reasons for this are numerous. The goods may have been the wrong type, they may have been surplus to requirements (их количество может превышать требуемое), have been faulty and so on.
To distinguish the two aspects of the increase of stocks of goods two accounts are opened. These are:
(i) Purchases Account (счет закупок) – in which purchases of goods are entered (записываются).
(ii) Returns Inwards Account (счет возврата нам) – in which goods being returned in to the firm are entered. The alternative name for this account is the Sales Returns Account (счет возврата проданных товаров).
2. Decreases in the stock of goods. This can be due to one of two causes if wastages and losses of stock are ignored.
(a) By the sale of goods.
(b) Goods previously bought by the firm now being returned out of the firm to the supplier.
To distinguish the two aspects of the decrease of stocks of goods two accounts are opened. These are:
(i) Sales Account (счет продаж) – in which sales of goods are entered.
(ii) Returns Outwards Account (счет возврата поставщикам) – in which goods being returned out to supplier are entered. The alternative name for this is the Purchases Returns Account (счет возврата купленных товаров).
Text #3
Text #4
Balance sheet layout
Структура балансового отчета
You would not expect to go into a first-class store and see the goods for sale all mixed up and not laid out properly. You would expect that the goods would be displayed so that you could easily find them. Similarly in balance sheets we do not want all the items shown in any order. We would really want them displayed so that desirable information could easily be seen.
For people such as bank managers, accountants and investors who look at a lot of different balance sheets, we would want to keep to a set pattern so as to enable comparison of balance sheets to be made easier.
Let us look at the assets side first. We are going to show the assets under two headings, Fixed Assets and Current Assets (основные средства и оборотные средства).
Assets are called Fixed Assets when they are of long life, are to be used in the business and were not bought with the main purpose of resale. Examples are buildings, machinery, motor vehicles and fixtures and fittings (принадлежности и приспособления).
On the other hand, assets are called Current Assets when they represent cash or are primarily for conversion into cash or have a short life. An example of a short-lived asset is that of the stock of oil held to power the boilers (для нагрева фабричных котлов) in a factory, as it will be used up in the near future. Other examples of current assets are cash itself, stocks of goods, debtors and bank balances.
There is a choice of two methods of listing the assets under their respective headings. The first, being the most preferable since it helps standardize the form of sole traders’ accounts with those of limited companies, is that the assets are listed starting with the most permanent asset, or put it another way, the most difficult to turn into cash, progressing to the asset which is least permanent or easier to turn into cash. The fixed assets will thus appear under that heading followed by the current assets under their heading. The other method, used by banks but fast falling into disuse in most other kinds of organizations, is the complete opposite. In this method it is the least permanent asset that appears first and the most permanent asset which appears last.
The order of the other side of the balance sheet is preferably that of starting with capital, progressing via long-term liabilities such as loans not requiring repayment within the near future, and finishing with current liabilities (краткосрочные обязательства), being liabilities such as debts for goods which have to be discharged in the near future. This then would be the order in which the claims against the assets would be met. The other method of listing the liabilities is the complete opposite of this, starting with current liabilities and finishing at the bottom with capital. This method conflicts with company accounts and is best avoided if the benefits of standardization are to be attained.
Text #5
Basic concepts
Основные принципы
The money measurement concept (принцип денежного выражения)
Accounting is only concerned with those facts that can be measured in monetary terms with a fair degree of objectivity. This means that accounting can never show the whole of the information needed to give you a full picture of the state of the business or how well it is being conducted. Accounting does not record that the firm has a good, or a bad, management team. It does not show that the poor morale (нездоровый моральный климат) prevalent among the staff is about to lead to a serious strike, or that various managers will not cooperate with one another. Nor will it reveal that a rival product is about to take over a larger part of the market occupied at present by the firm’s own goods.
This means quite simply that just looking at a set of accounting figures does not tell you all that you would like to know about a business. Some people imagine that accounting gives you a full picture, but from what has been said they are quite obviously deluding themselves. Others would maintain (существует также мнение) that really accounting ought to put monetary values on these other factors as yet ignored in (которые пока не находят отображения в) accounting. Those who object to this state that this would mean a considerable loss of objectivity. Imagine trying to place a value of the future services to be given to the firm by one of its managers. Different people would tend to give different figures, and so, at present, as the final accounts are of a multi-purpose nature, which figures would be acceptable to the many parties who use the accounts? As the answer is that no one set of acceptable figures could be agreed in this case by all parties, then in accounting as it stands the task is just not undertaken at all. It would seem likely that, eventually the vital factor of placing a value on labor and management, usually known as human asset accounting (учет человеческого капитала) will play a full part in the construction of balance sheets.
The going concern concept (принцип работающего предприятия)
Unless the opposite is known accounting always assumes that the business will continue to operate for an indefinitely long period of time. Only if the business was going to be sold or closed down would it be necessary to show how much the asset would fetch (какую сумму можно выручить от реализации средств фирмы). In the accounting records normally this is assumed to be of no interest to the firm. This is obviously connected with the cost concept (принцип стоимости), as if firms were not assumed to be going concerns the cost concept could not really be used, e.g. if firms were always to be treated as though they were going to be sold immediately after the accounting records were drafted (по составлении бухгалтерской отчетности), then the saleable value of the assets (продажная цена активов) would be more relevant than cost.
The business entity concept (принцип целостности предприятия)
The transactions recorded in a firm’s books are the transactions that affect the firm. The only attempt to show how the transactions affect the owners of a business is limited to showing how their capital in the firm is affected. For instance, a proprietor puts $1,000 more cash into the firm as capital. The books will then show that the firm has $1,000 more cash and that its capital has increased by $1,000. They do not show that he has $1,000 less cash in his private resources. The accounting records are therefore limited to the firm and do not extend to (не распространяется на) the personal resources of the proprietor’s.
The realization concept (принцип реализации)
In accounting, profit is normally regarded as being earned at the time when the goods or services are passed to the customer and he incurs liability for them, i.e. this is the point at which the profit is treated as being realized. Note that it is not when the order is received, nor the contract signed, neither is it dependent on waiting until the customer pays for goods and services. It can mean that profit is brought into account in one period, and it is found to have been incorrectly taken as such when the goods are returned in a later period because of some deficiency (по причине имеющихся дефектов). Also the services can turn out to be subject to an allowance (предмет внесения поправки) being given in a later period owing to poor performance (из-за низкого качества) if the allowances or returns can be reasonably estimated and adjustment may be made (можно внести поправку) to the calculated profit in the period when they passed (реализуются) to the customer.
The dual aspect concept (принцип двойственности)
This states that there are two aspects of accounting, one represented by the assets of the business and the other by the claims against them (требования к ним). The concept states that these two aspects are always equal to each other. In other words:
Assets = Liabilities + Capital
Double entry (двойная запись) is the name given to the method of recording the transactions so that the dual aspect concept is upheld (соблюдается).
Text #6
Text #7
Text #8
Controls
Виды контроля
Internal check (Внутренний контроль)
When sales invoices are being made out (после оформления счетов-фактур продаж) they should be scrutinized very carefully. A system is usually set up so that each stage of the preparation of the invoice is checked by someone other than the person whose job is to send out the invoice. If this was not done then it would be possible for someone inside a firm to send out an invoice, as an instance, at a price less than the true price. Any difference could then be split between that person and the outside firm. If an invoice should have been sent to Ivor Twister & Co for $2,000, but the invoice clerk made it out deliberately for $200, then, if there was no cross-check (в случае отсутствия двойного контроля), the difference of $1,800 could be split between the invoice clerk and Ivor Twister & Co.
Similarly outside firms could send invoices for goods which were never received by the firm. This might be in collaboration with an employee within the firm, but there are firms sending false invoices which rely on the firms receiving them being inefficient and paying for items never received. There have been firms sending invoices for such items as advertisements which have never been published. The cashier of the firm receiving the invoice, if the firm is an inefficient one, might possibly think that someone in the firm had authorized the advertisements and would pay the bill.
Besides these are of course genuine errors (естественные ошибки), and these should also be detected. A system is therefore set up whereby (таким образом, чтобы) the invoices have to be subject to scrutiny, at each stage, by someone other than the person who sends out the invoices or is responsible for paying them. Incoming (входящие) invoices will be stamped with a rubber stamp with spaces for each stage of the check. For instance, one person will have authority to certify that the goods were properly ordered, another that the goods were delivered in good order, another that the prices are correct, that the calculations are correct, and so on. Naturally in a small firm, simply because the office staff might be quite small, this cross-check may be in the hands of only one person other than the person who will pay it. A similar sort of check will be made in respect of sales invoices being sent out.
Statements (отчеты)
At the end of each month a statement should be sent to each debtor who owes money on the last day of the month. The statement is really a copy of the account for the last month, showing the amount owing (величина задолженности) at the start of the month, then the totals of each of the sales invoices sent to him in that month, the credit notes (кредитовые авизо) sent to him in the month for the goods returned, the cash and checks received from the debtor, and finally the amount owing at the end of the month.
The debtor will use this to see if the accounts in his accounting records agree with his account in our records. Put simply, if in our books he is shown as owing $798 then, depending on items in transit (в зависимости от содержания сделки) between us, his books should show us as a creditor for $798. The statement also acts as a reminder to the debtor that he owes us money and will show the date by which he should make payment.
Credit control (кредитный контроль)
Any organization which sells goods on credit should ensure that a tight control is kept on the amount owing from individual debtors. Failure to do so could mean that the amount of debtors increases past the point which the organization can afford to finance, also there is much higher possibility of bad debts (безнадежные долги) occurring if close control is not kept.
For each debtor a credit limit should be set. This will depend partly on the past record of dealings with the debtor, whether or not the relationship has been a good one, with the debtor always paying his account on time or not. The size of the debtor firm and the nature of its financial backing (финансовые гарантии) will also help determine what would be a safe credit limit to set. For instance, you might set a credit limit of only $250 for a fairly new and untried customer, but this could be as much as, say, $20,000 for a large well-known international firm with large financial resources. In the business world most business people are optimistic by nature, and they usually feel that they can manage to pay off debts much easier than is the case. Therefore it is a wise policy to err on the side of caution. On the other hand this should be tempered down (уравновешиваться) by the fact that if you are too cautious you will probably not do much business, so a sensible middle course is the answer.
Therefore the debtor should know the length of the term of credit, i.e. how many days or weeks or months he has in which to pay the bill. He should also know that you will not supply goods to him if the amount that he owes you exceeds a stated amount.
Text #9
Value Added Tax
Налог на добавленную стоимость
Value Added Tax, which will be shown hereafter in its abbreviated form as VAT, is charged in the United Kingdom on both the supply of goods and of services by persons and firms who are taxable. Some goods and services are not liable to VAT. Examples of this are food and postal charges (почтовые сборы). The rates at which VAT are levied have changed from time to time. Some goods have also attracted a different rate of VAT from the normal rate. Instances of this in the past have been motor cars and electric goods which have varied from the rates levied on most other goods.
The Government department which deals with VAT in the United Kingdom is the Customs and Excise department (Таможенно-Акцизное Управление).
Taxable firms (фирмы, облагаемые налогом)
Imagine that firm A takes raw materials that it has grown and processes them and then wants to sell them. If VAT did not exist it would sell them for $100, but VAT of 10 percent must be added, so it sells them to firm B for $100 + VAT$10 = $110. Firm A must now pay the figure of $10VAT to tax authorities. Firm B having bought for $110 alters the product slightly and then resells to firm C for $140 + 10 per cent VAT$14 = $154. Firm B now gives the tax authorities a check for the amount added less the amount it had paid to firm A for VAT$10, so that the check payable to the tax authorities by firm B is $4. Firm C is a retailer who then sells the goods for $200 to which it must add VAT 10 per cent $20 = $220 selling price to the customer. Firm C then remits $20 - $14 = $6 to the tax authorities.
It can be seen that the full amount of VAT tax has fallen on the ultimate customer who bought the goods from the retail shop, and that he suffered a tax (подвергается налогу) of $20. The machinery of collection (механизм сбора) was however geared to (связан с) the value added to each stage of the progress of the goods from manufacture to retailing, i.e. firm A handed over $10, firm B $4 and firm C $6, making $20 in all.
Exempted firms (освобожденные фирмы)
If a firm is exempted then this means that it does not have to add the VAT tax on to the price at which it sells its products or services. On the other hand it will not get a refund of the amount it has paid itself of the goods and services which it has bought and on which it has paid VAT tax. Thus such a firm may buy goods for $100 + VAT tax $10 = $110. When it sells them it may sell at $130, there being no need to add VAT tax at all. It will not however get a refund of the $10 VAT tax it had itself paid on those goods.
Instances of firms being exempted are insurance companies, which do not charge VAT on the amount of insurance premiums payable by their customers, and banks, which do not add VAT on to their bank charges (банковские комиссионные платежи). Small firms with a turnover of less than a certain amount (the limit is changed upwards from time to time) do not have to register for VAT if they don’t want to, and they would not therefore charge VAT on their goods and services. On the other hand many of these small firms could register if they wished, but they would then have to keep full VAT records in addition to charging out VAT. It is simply an attempt by the UK Government to avoid crippling (исключить трудности для) very small businesses with unnecessary record-keeping that gives most small businesses this right to opt out of charging (уклоняться от уплаты) VAT.
Zero rated firms (фирмы с нулевой ставкой)
They do not add VAT tax to the final selling price of their product or services. They do however obtain a refund of all VAT tax paid by them on goods and services. This means that if one of the firms buys goods for $200 + VAT tax $20 = $220, and later sells them for $300 it will not have to add VAT on to the selling price of $300. It will however be able to claim a refund of the $20 VAT tax paid when the goods were purchased. It is this latter element that distinguishes it from an exempted firm. A zero rated firm is therefore in a better position than an exempted firm. Illustrations of these firms are food, publishing and the new construction of buildings.
Text 10
Topics for students of accounting
Text #1
The accounting equation
Бухгалтерская сбалансированность
Accounting is often said to be the language of business. It is used in the business world to describe the transactions entered into by all kinds of organizations. Accounting terms and ideas are therefore used by people associated with business, whether they are managers, owners, investors, bankers, lawyers, or accountants. As it is the language of business there are words and terms that mean one thing in accounting, but whose meaning is completely different in ordinary language use. Fluency (свобода в овладении предметом) comes, as with other languages, after a certain amount of practice. When fluency has been achieved, the person will be able to survey (исследовать) the transactions of business and will gain a greater insight into (глубже вникать в) the way that business is transacted and the methods by which business decisions are taken.
The actual record-making (ведение записей) phase of accounting is usually called book-keeping. However, accounting extends far beyond the actual making of records. Accounting is concerned with the use to which these records are put (это то, для чего предназначены записи), their analysis and interpretation. An accountant should be concerned with more than the record-making phase. In particular he should be interested in the relationship between the financial results and the events which have created them. He should be studying the various alternatives open to the business, and be using his accounting experience in order to aid the management to elect the best plan of action for the business. The owners and managers of a business will need some accounting knowledge in order that they may understand what the accountant is telling them. Investors and others will need accounting knowledge in order that they may read and understand the financial statements issued by the business, and adjust their relationships (строить свои отношения) with the business accordingly.
Probably there are two main questions that the managers or owners of a business want to know: first, whether or not the business is operating at a profit; second, they will want to know whether or not the business will be able to meet its commitments as they fall due (выполнить взятые обязательства), and so not have to close down owing to lack of funds. Both of these questions should be answered by the use of the accounting data of the firm.
The accounting equation
The whole of financial accounting is based on the accounting equation. This can be stated to be that for a firm to operate it needs resources, and that these resources have had to be supplied to the firm by someone. The resources possessed by the firm are known as Assets, and obviously some of these resources will have been supplied by the owner of the business. The total amount supplied by him is known as Capital. If in fact he was the only one who had supplied the assets then the following equation would hold true (будет справедливым):
Assets = Capital
On the other hand, some of the assets will normally have been provided by someone other than the owner. The indebtedness of the firm for these resources is known as Liabilities. The equation can now be expressed as:
Assets = Capital + liabilities
It can be seen that the two sides of the equation will have the same totals. This is because we are dealing with the same thing from two different points of view. It is:
Resources: What they are (Assets) = Resources: Who supplied them (Capital + Liabilities)
It is a fact that the totals of each side will always equal one another, and that this will always be true no matter how many transactions are entered into. The actual assets, capital and liabilities may change, but the equality of assets with that of the total of capital and liabilities will always hold true.
Assets consist of property of all kinds, such as buildings, machinery, stocks of goods and motor vehicles, also benefits such as debts owing by customers and the amount of money in the bank account.
Liabilities consist of money owing for goods supplied to the firm (которые фирма должна за поставленные ей товары), and for expenses, also for loans made to the firm.
Capital is often called the owner’s equity or net worth (собственный капитал или чистый капитал).
Text #2
The asset of stock
Средства в запасах
Goods are sometimes sold at the same price at which they are bought, but this is not usually the case. Normally they are sold above cost price (цена, в которую они обошлись), the difference being profit; sometimes however they are sold at less than cost price, the difference being loss.
If all sales were at cost price, it would be possible to have a stock account (счет запаса товаров), the goods sold being shown as a decrease of an asset, i.e. on the credit side (по кредиту счета). The purchase of stock could be shown on the debit side as it would be an increase of an asset. The difference between the two sides would then represent the cost of the goods unsold at that date, if wastages and losses are ignored (если товарные потери и убыль не учитываются). However, most sales are not at cost price, and therefore the sales figures include elements of profit or loss. Because of this, the difference between the two sides would not represent the stock of goods. Such a stock account would therefore serve no useful purpose.
The Stock Account is accordingly divided into several accounts, each one showing a movement of stock. This can be said to be:
1. Increases in the stock. This can be due to one of two causes.
(a) By the purchase of additional goods.
(b) By the return in (из-за возврата) to the firm of goods previously sold. The reasons for this are numerous. The goods may have been the wrong type, they may have been surplus to requirements (их количество может превышать требуемое), have been faulty and so on.
To distinguish the two aspects of the increase of stocks of goods two accounts are opened. These are:
(i) Purchases Account (счет закупок) – in which purchases of goods are entered (записываются).
(ii) Returns Inwards Account (счет возврата нам) – in which goods being returned in to the firm are entered. The alternative name for this account is the Sales Returns Account (счет возврата проданных товаров).
2. Decreases in the stock of goods. This can be due to one of two causes if wastages and losses of stock are ignored.
(a) By the sale of goods.
(b) Goods previously bought by the firm now being returned out of the firm to the supplier.
To distinguish the two aspects of the decrease of stocks of goods two accounts are opened. These are:
(i) Sales Account (счет продаж) – in which sales of goods are entered.
(ii) Returns Outwards Account (счет возврата поставщикам) – in which goods being returned out to supplier are entered. The alternative name for this is the Purchases Returns Account (счет возврата купленных товаров).
Text #3