Make the summary of the last text.

UNIT 39

A FEW CONCEPTS OF MARKET ECONOMY

1. Read and translate the text:

CAPITAL, ASSETS AND LIABILITIES

The word capital is used in many ways. Even within the business world, it has various meanings. To understand the ways in which the word capital is used, it is necessary to appreciate the nature of a firm’s assets and liabilities. No business will succeed unless it has a sound financial foundation. This means that the capital invested in firm must:

- be sufficient for its needs;

- be organized in the most efficient way.

Assets consist of all the things a firm owns, whether these are paid for or not. Assets fall into two groups. These are:

1. Fixed assets.

These remain in the firm for relatively long period of time. Examples include land, premises, machinery, equipment, vehicles. Fixed assets is sometimes referred to as fixed capital – that is, the amount of capital invested in the fixed assets.

2. Current assets.

These are constantly being used and replaced during everyday business. Examples include stocks (of both raw materials and finished goods), debtors and cash. They are sometimes called current or circulating capital. This is because they circulate (“go round” in a circle) in normal trading in the following way:

a) the raw materials are turned into finished goods;

b) the finished goods are sold to customers;

c) the customers pay cash;

d) the cash is used to buy more raw materials.

Liabilities are the debts the firm owes to others. Most firms purchase their assets, particularly their stocks, on credit. This means that the goods have been purchased and are owned by the firm, but they will not be paid for until later. Debts are liabilities.

They may be:

1. Long-term liabilities. These are debts not repayable for at least a year. Long-term loans are an example.

2. Current liabilities. These are debts which are repayable within a year. Trade creditors (that is, firms from whom goods have been bought on credit) are the main example.

2. Match English and Russian equivalents:

наличные деньги	coal, clay, cargo, cash, coach
выгода, польза	power, project, point, profit, purpose
счет	account, attempt, abolition, accident, access
обычный, традиционный	convenient, capable, conventional, considerable, careful
заем, ссуда	length, limit, lorry, load, loan
сокращение	advantage, achievement, ability, abbreviation, absolution
направление, тенденция	traffic, term, test, trend, time
сделка	translation, transaction, truck, trouble, task
вкладывать деньги	to install, to include, to increase, to invest, to influence
счет-фактура	introduction, invention, influence, increase, invoice
недвижимость, собственность	population, part, pay, premises, property
равный	empty, equal, early, exact, every

3. Translate into Russian:

A more exact statement –

A bank statement –

To have no credit note –

Invoice in dollars –

To send an invoice –

To have no invoice –

Conventional words –

Conventional clothes –

A new trend in a style –

A detailed account –

A job of an account –

To send an account –

A long-term plan –

A short-term plan –

Business premises –

To provide premises –

To sell own goods –

To own the car –

To summarize these facts –

A news summary –

A one-page summary –

Cash transaction –

To pay in cash –

The transaction of business –

A debt collector –

Debt of honor –

To be a debtor –

To offer a loan –

To earn one's living –

To have equal rights –

First among equals –

Agricultural profit –

Commercial profit –

Farm profit –

Monthly profit –

To distribute a profit –

Planned profit –

To invest money –

To have no money –

To spend money –

Money well spent –

A loss of money –

To transfer money –

4. Answer the questions:

a) What is capital?

b) What are assets?

c) What are “liabilities”?

d) Give the first three requirements of an accounting system.

e) Describe the profit and loss account.

f) How do you understand “the balance sheet”?