STT Phrase Meaning Chú thích

Chapter 1: Introduction to Accounting

1 accounting the process of identifying, measuring, recording, and communicating economic transactions.
2 bookkeeping the recording of all financial transactions undertaken by an individual or organization
the system designed to record the accounting transactions and events of a business and account for them in a
3 accounting system way that complies
The basic elementswith itsaccounting
of the policies andsystem
procedures.
are concerned with the collecting, recording, evaluating, and
reporting
one transactions
that keeps, audits, and
and events.
inspects the financial records of
4 accountant
individuals or business concerns and prepares financial and tax reports
a person employed to keep the books of account for a business.
A bookkeeper is responsible for ensuring that all transactions are recorded in the correct daybook, suppliers
5 bookkeeper ledger, customer
An accountant mayledger and the
prepare general
profitledger.
and loss statement and balance sheet using the trial balance and ledgers
prepared by the bookkeeper.
The bookkeeper brings the books to the trial balance stage.
6 business entity the unit for which accounting records are maintained and for which financial statements are prepared.
the top managerial and financial accountant.
7 controller The controller supervises the accounting department and assists management in interpreting and utilizing
managerial
those to whom accounting information
an organization or an individual owes money. The
8 creditors
balance on the creditors’ ledger control account is included in the balance sheet
the branch of accounting concerned with classifying, measuring, and recording the transactions of a business.
9 financial accounting Financial accounting is primarily concerned with providing a true and fair view of the activities of a
business
the branch toof
parties external
accounting to it is mainly concerned
which
10 managerial accounting
with
the providing
whole information
staff of the company helpful
who tois managers running
in charge of a business.
planning, maintaining, and supervising its financial
11 internal users
activity
the day to day operations of the entity, but who are indirectly related to it (owners,
12 external users
governmental lenders,
used suppliers, potential
by government agencies, investors
usually and creditors,organizations,
unprofitable employees, taxing authorities
but which also need to record financial
13
accounting information
14 private accountant an accountant who works in private industry and is employed by a single enterprise.
an independent professional person who offers accounting
15 public accountant
services to clients for a fee.
16 accountancy is the theory of keeping financial records
17 accounting refers to the activity of keeping financial records
18 account is a record of money received and spent
is a
19 accountant Managers andkeeps
owners
person who andofworks
both with
largefinancial
and smallrecords
profit-making organizations use accounting information to
20 accounting information answer important questions. Are profits sufficient? Should selling prices be increased or decreased? How
Persons responsible
many workers shouldforbenon-profit
employed? organizations
etc. also need accounting information as the basis for making
21 making decisions
decisions
non-profit organization, such as churches, social clubs, and city governments, must keep spending within
22 non-profit organization
money available.
23 owners Business managers and owners need good financial information to make good business decisions
 Orderly records of a business' financial activities are called
24 accounting records accounting records
25 bankruptcy Inaccurate accounting records often contribute to business failure and bankruptcy
Failure to understand accounting information can result in poor business decisions for either profit or non-
26 business decisions
profit businesses and organizations
27 accounting training helps managers and owners make better business decisions
28 assets this is name for buildings machinery, money in the bank and money owned by customers
29 depreciation The loss of value of the things in number one
30 loan Money which is borrowed
31 interest The extra money a company or person pays for borrowing money
The total sum of money which is supplied by the owners of a company to set it
32 capital
up
33 drawings Cash or goods which the owner takes from the company for his own private use
34 shares These are bought by people wishing to invest in the company
35 goodwill The extra amount which is paid for a company above the value of its assets
36 acquisition The purchase of another company
37 audit An official examination of the accounts
38 budget A financial plan for the future
39 balance sheet A statement of the financial position the company
40 ledgers The official books for keeping accounts
41 discount A reduction in the price which is offered to customers
42 creditor This company has supplied goods but has not received any money for them yet
43 stocks Goods which has the company has available to sell
44 debtors Customers who have received goods but not paid for them yet
45 balance This is the name of the difference between the credit and debit side of a account
46 profit Companies make this when they sell their goods for more than it costs
47 loss Companies make this when they sell their goods for less than it cost
Chapter 2: Careers in the field of accountancy
annual financial
1 the set of accounts which are prepared each year
statements a specialist whose job is to carefully check the accounts and accounting
2 auditor
apractices of a may
person, who company
or may not be qualified, that records the
3 bookkeeper
chartered accountant financial transactions of a business
4 a fully qualified accountant, holding current certification
(CA) a set of rules (often used within a company) which show the
5 code of conduct
correct way to behave
6 confidentiality the state of being secret and/or kept secret
 7 creative accounting the use of holes in financial law to have an advantage or to show figures in a deceptive way
8 income tax the tax which is due on personal earnings
local accounting
9 the set of rules and laws for a country which govern how accounts should be prepared
standards
management a senior member of the accounting team, who liaises with company owners / directors and advises on the
10
accountant financial aspects of any planned action
11 payroll clerk the member of the accounting team who deals with employees
(U.S. accounts payable) the member of the accounting team who deals with suppliers, issues payment for
12 purchase ledger clerk
goodsaccounts
(U.S. and services and keeps
receivable) thetrack of expenditure
member of the accounting
13 sales ledger clerk
team who deals with sales, raises invoices and collects payment
14 tax advisor a specialist who is able to give advice on matters of taxation
the tax which is due on the difference between the
15 VAT (value added tax)
value of a product or service and the cost of its production
16 payroll a list of all employees and their wages
17 journal an accounting record where all business transactions are initally entered
18 expense money that is spent to purchase goods or services provided by someone else
a detailed summary of a person's or a company's financial condition at a specific
19 balance sheet
point in time, taking into account their assets, liabilities, etc.
20 property something that is legally owned by a person or company
21 liabilities an obligation to settle a debt; money owed to someone
22 equity this word has 2 meanings: "stock (shares)" and "net worth"
23 cash flow the balance of cash receipts minus cash payments over a given period of time
24 liquid assets cash or something that is easily convertible into cash
25 net income money remaining after all expenses and taxes have been paid
26 assets anything owned by a company –cash, buildings, machines, etc
calculating how much tax an individual or a company should pay
27 tax accounting
or trying reduce this figure
28 auditing checking and evaluating financial records
determining the unit cost of a manufactured product, including
29 indirect cost
indirect costs
30 financial accounting keeping financial records and preparing financial statements
money that a company will have to pay to someone else –
31 liabilities
bills, debts, interest, taxes, etc
32 bookkeeping recording transactions (purchases and sales) in ledgers
33 income the money that a company receives from supplying goods or services
34 expenditure the money that a company spends
management
35 the use of company’s accounting data by its manager to run the business
accounting
36 commission A charge for arranging a transaction (e.g. buying or selling securities)
37 fee A charge for a service performed by a bank
38 premiums Payments for an insurance policy
39 Amortization A reduction in the value of an asset, charge against profits
40 net An adjective meaning after all deductions have been made
41 Consolidated An adjective meaning for a whole group of companies
42 short-term An adjective meaning one year or less in financial statements
43 minority interests Part-ownership (less than 50%) of other companies
Things of value that cannot be physically touched, such as reputation (goodwill),
44 Intangible assets
brand names and trademarks
45 shareholders’ equity The net worth of a company – the amount by which an asset exceed liabilities
46 accounting
accounting involves recording and summarizing an organization’s transactions or business deal, such as
47 recording
purchases and sales, and reporting them in the form of financial statements.
48 transactions
accounting or accountancy profession has professional organizations which operate
49 accountancy
their own training and examination systems, and make technical and ethical rules:
50 bookkeeping bookkeeping
financial is the day-to-day
accounting recording of transactions.
included bookkeeping, and preparing financial statements for
51 financial accounting shareholders and creditors — people or organizations who have lent money to a
management management
company. accounting involves the use of accounting data by managers, for making
52
accounting plans and decisions.
53 auditing auditing means examining a company's systems of control and the accuracy or exactness of its records,
54 looking for errors or possible fraud: where the company may have deliberately given false information.
accuracy
55 internal audit An internal audit is carried out by a company's own accountants or internal auditors.
56 external audit An external
The externalaudit
auditisexamines
done by the
independent
truth and auditors: auditors
fairness of who
financial are not employees
statements. It tries toof the company.
prevent what is called
57 external audit 'creative accounting', which means recording transactions and values in a way that produces a false result —
The accounts
usually of British
an artificially companies
high profit have to give a true and fair view of their financial situation. This means
58 true and fair view
that
In most continental Europeanmust
the financial statements give a and
countries, correct and reasonable
in Japan, picture
there are laws of theto
relating company's current
accounting, condition.
established by the
59 laws
government.
In the US, companies whose stocks are traded on public stock exchanges have to follow rules set by the
60 follow rules
Securities
In Britain, and Exchange
the rules, Commission
which (SEC), a government
are called standard, agency
have been established by independent organizations such as
61 standard
the Accounting Standards Board (ASB), and by the accountancy profession itself.
62 apply Companies are expected to apply or use these standards in their annual accounts in order to give a true and
63 annual accounts fair view.
64 bookkeeping I record all the purchases and sales made by this department.
65 external auditing This month, I’m examining the accounts of a large company
management
66 I analyze the sales figures from the different departments and make decisions about our future activities
accounting
67 accounting I’m responsible for preparing our annual balance sheet
68 financial accounting When the accounts are complete, I check them before they are presented to the external auditors.
 Chapter 3: Making a career in Accounting
1 balance sheet a document which summarizes the assets, liabilities and equity of a business entity at a given time
certified public
2 the American and Australian equivalent of a Chartered accountant
accountant
chief financial(CPA)
officer
3 the most senior financial manager, responsible for overseeing the financial activities of the entire company
(CFO)
4 credit an entry showing the amount of money owed to the company by its customers
5 debit an entry showing an amount owed (due to be paid by the company), entered on the left hand side
the state for postponing the recognition of an asset or liability until a
6 deferral
future time
7 double taxation the state where income tax is paid twice (often to two different governments) on one income
8 due diligence reasonable actions taken by a person to satisfy a law or regulation
9 foreign currency the money used in another country
10 in excess of more than, greater than
limited liability
11 a business entity where the debts of the company are separate from the debts of the share-holder
company (LLC)
12 reconcile to ensure that two figures agree with each other
13 record a written account of a transaction
14 sole trader a business which is owned and run by one person
15 trial balance a statement of all debits and credits in the double-entry account book, with any discrepancies shown
16 trainee accountants Accountants who are studying for professional examinations.
17 bookkeepers Administrative staff that is responsible for processing the records of a business's financial activities.
18 tax accountant An accountant who specializes in a company's tax affairs
A person in charge of the staff who is responsible for giving administrative support to the Finance
19 back-office manager
department.
20 internal auditors Employees of a company who are responsible for inspecting its accounts
21 external auditors People employed by an outside firm of accountants and hired by a company to inspect its accounts
22 accounting the art of recording, summarizing, reporting, and analyzing financial transactions
23 audit an examination of records or financial accounts to check their accuracy
24 bookkeeping the systematic recording of a company's financial transactions
reporting of the financial position and performance of a firm through financial statements issued to external
25 financial accounting
users on a periodic basis
26 an account a precise list or enumeration of financial transactions
27 financial statements a written report of the financial condition of a firm
management the process of measurement, analysis, preparation and communication of financial information that is used by
28
accounting management
the status of atofirm's
plan,assets,
evaluate, and control
liabilities withinpositions
and equity an organization
at a specific point in time, often described in a
29 financial condition
financial statement
30 auditor An accountant who reviews the accounting procedures of a company is called an auditor
 activity-based costing
31 Do you have any experience in using an activity-based costing system?
system
32 rule of thumb A general rule of thumb in business says that 20% of the product line produces 80% of the sales.
33 share The term "equity" refers to the owners' share of the business
34 income statement An expenditure will not necessarily show up on the income statement at the time the expenditure is made
35 eventually All expenditures eventually ( = in time) show up as expenses.
36 expense
37 chargeable Something is an "expense" if it is chargeable against revenue during an accounting period.
revenue
38
39 fiscal year Our company's fiscal year begins on May 1.
Thanks to your hard work, we've seen some positive changes in sales volume. ( = we have started selling
40 sales volume
more)
41 business transactions We really need to start keeping our business transactions organized.
Chapter 4: Bookkeeping
1 asset a resource in the possession of a company which is available for use
2 authorize to give permission to happen
3 daybooks a journal of financial transactions entered on the day that they happened
double entry
4 a system of keeping financial records where each transaction has a debit and a credit posted
bookkeeping
5 ensure to make certain that something happens
6 expenditure all monies spent
7 income all monies received
8 incorrect wrong, false
9 liability a company's debt or obligation
10 nominal code a reference number which allows the grouping of financial transactions
11 post to make an entry in an accounting ledger or software system
12 return a form which is submitted to a tax authority
single entry
13 a simple system of keeping financial records, where transactions are entered only once
bookkeeping an informal word for a set of financial records using double entry bookkeeping, with debits entered on the left
14 T-accounts The doubleonentry bookkeeping method is the most widely used bookkeeping method. It is a standard
double entry and credits the right
15 accounting method that involves each transaction being recorded in at least two accounts, resulting in a debit
bookkeeping
double entry Double
16 to one orentry
moreaccounting
accounts and provides
a creditatomethod
one or for quickly
more checking accuracy because the sum of all accounts
accounts.
accounting
single entry with debit balances should equal the sum of all credit balance accounts.
17 some businesses that have strictly cash transactions may use the single entry bookkeeping method instead
bookkeeping accounting methods refer to the basic rules and guidelines under which businesses keep their financial
18 accounting methods Accounting records prepared usingreports
the cash basis recognize income and expenses according to real-time cash
records and prepare their financial
19 cash basis flow. Income is recorded upon receipt of funds, rather than based upon when it is actually earned, and
expenses are recorded as they are paid, rather than as they are actually incurred.
 the accrual basis makes a greater effort to recognize income and expenses in the period to which they apply,
regardless
Under this of whether
system, or notismoney
revenue has when
recorded changed
it ishands.
earned, rather than when payment is received, and expenses
20 accrual basis recorded when they are incurred, rather than when payment isand
So it is an accounting method that measures the performance made.
position of a company by recognizing
economic events regardless of when cash transactions occur.
This method allows the current cash inflows/outflows to be combined with future expected cash
inflows/outflows to give a more accurate picture of a company's current financial condition.
21 balance sheet The financial statement that reports assets, liabilities, stockholders’(owners’) equity at a specific date
22 accrual basis Under the accrual basis of accounting, revenues are reported in the accounting period when service or goods
23 revenues have been delivered
24 two accounts Accounting entries involve minimum of two accounts
25 accrual basis Under the accrual basis of accounting, expenses are reported in the accounting period when expenses
26 expenses matches the revenues or used up
27 cash flow basis
Under the cash flow basis, income is recorded upon receipt of funds
28 income
double-entry In the double-entry accounting method, every journal entry transaction is recorded in the journal once, but
29
accounting affects two different accounts
30 profits
An accounting period is a period of time over which profits are calculated
31 accounting period
32 Accounts receivable Accounts receivable refers to the money that is owed to the company by its clients/customers.
33 accrue to accrue means to accumulate or increase
34 bookkeeping Another word for accounting is bookkeeping
35 assets Things of value owned by a business are known as its assets
36 liability the opposite of an asset is liability
37 fixed assets Every company should have a clear record of their fixed assets
38 bookkeepers
bookkeepers record the company's daily transactions: sales, purchases, debts, expenses, and so on.
39 transactions
Each type of transaction is recorded in a separate account — the cash account, the liabilities account and so
40 account
double entry on
41 double entry bookkeeping is a system that records two aspects of every transaction
bookkeeping
42 debit Every transaction is both a debit—a deduction — in one account and a corresponding credit—an addition —
43 credit in another
44 raw materials the substances and components used to make products
As this means the level of the company's stock— goods ready for sale — is reduced, it debits the stock
45 stock
account.
46 debtors customers who owe money for goods or services purchased
47 day books For accounts with a large number of transactions, like purchases and sales, companies often record the
transactions in day books or journals, and then put a daily or weekly summary in the main doubleentry
 transactions in day books or journals, and then put a daily or weekly summary in the main doubleentry
48 journals records
49 nominal ledgers In Britain, they call the main books of account nominal ledgers
50 creditors creditors - suppliers to whom the company owes money for purchases made on credit - are recorded in a
51 bought ledger bought ledger
52 accounting period At the end of an accounting period, for example a year, bookkeepers prepare a trial balance which transfers
53 trial balance the debit and credit balances of different account onto one page
54 debit an amount entered on the left-hand side of an account, recording money paid out
55 ledger a book of accounts
56 debtors customers who owe money for goods or services not yet paid for
57 credit an amount entered on the right-hand side of an account, recording a payment received
58 stock goods stored ready for sale
59 creditors suppliers who are owed money for purchases not yet paid for
double entry
60 double entry bookkeeping shows where money comes from and where it goes: it is always transferred from
bookkeeping
61 account one account to another one
62 debit
Every event in entered twice - once as a credit and once as a debit
63 credit
64 day books
Most businesses record very frequent or numerous transactions in day books or journals
65 journals
66 nominal ledger The main account books are called nominal ledger
67 bought ledger the book relating to creditors is called the bought ledger
In order to prepare financial statements, companies do a trial balance which copies all the debit and credit
68 trial balance
balances of different accounts onto a single page.
69 credit If you buy new assets, you credit the cash or capital account
70 debit If you pay some bills, you debit the liabilities account
If you buy materials from a supplier on 60 days' credit, you debit the purchases account and credit the
71 debit & credit supplier's
If you sellaccount
something to a customer who will pay 30 days later, you credit the sales account and debit the
customer's account.
Chapter 5: The principles and standards of accounting
accrual basis
1 the method of accounting in which income and expenditure are recorded at the date they are earned / incurred
accounting
2 be consistent with in agreement with, in accordance with
3 depreciation the method of allocating the cost of an asset over its useful life
4 expense show the full cost of something in the company verb
5 fixed asset an asset which is not consumed or sold during the normal course of business activities
 generally accepted
6 accounting principles the common set of standards and procedures used by companies when preparing financial statements
7 (GAAP)
levy impose or collect
8 net earnings a company's total revenue minus the operating expenses, depreciation, and interest paid and taxes
9 omit exclude, leave out
10 public company a firm which is permitted to sell shares in the firm to the general public
reducing balance
11 a method of deprecation which imposes a set rate of depreciation on the remaining balance of the asset
depreciation
12 revenue the amount of money a company receives over a given time frame
13 significant having or expressing meaning, important
14 tax accounting methods of accounting which focus on tax instead of the appearance of public financial statements
15 taxable income the amount
The of money
accountant keeps on
all which
of the tax is paidtransactions of a sole proprietorship separate from the business
business
economic entity
16 owner's personal transactions. For legal purposes, a sole proprietorship and its owner are considered to be one
assumption
monetary unit Economic
17 entity, but activity is measured
for accounting in U.S.
purposes theydollars, and onlytotransactions
are considered that can
be two separate be expressed in U.S. dollars are
entities
assumption recorded
This accounting principle assumes that a company will continue to exist long enough to carry out its
18 going concern principle
objectives
This and commitments
accounting and will
principle assumes thatnot liquidate
it is possibleintothe foreseeable
report futureand ongoing activities of a
the complex
19 time period assumption
business in relatively short, distinct time intervals
This accounting principle requires companies to use the accrual basis of accounting. The matching principle
20 matching principle Under the accrual basis of accounting (as opposed to the cash basis of accounting), revenues are recognized
revenue recognition requires that expenses be matched with revenues
21 as soon as a product has been sold or a service has been performed, regardless of when the money is actually
principle an inspection, correction and verification of business accounts conducted by an independent qualified
22 audit received
accountant
23 message a communication, usually brief, from one person or group to another
24 extent the range over which something extends; scope
25 principle a fundamental or general truth, law or standard
26 ingredient a component of a mixture
27 comformity compliance in actions, behaviour, etc., with certain accepted standards or norms
28 evidence data on which to base proof or to establish truth or falsehood
29 comparability agreement or similarity, especially in a certain limited number of features or details
30 analogy a comparison made to show a similarity
31 auditor a person qualified to audit accounts
32 accounting standards Accounting standards are the rules for preparing financial statements
33 auditing standards Auditing standards are the rules governing how an audit is performed
accounting & auditing
34 Accounting standards and auditing standards are interrelated
standards I always study the investment ratios of a company before I invest, so I can get a clear picture of all the key
35 investment ratios
figures.
The interest payments for the period are £30,000 and the operating profit is £120,000, so interest cover is 25
36 interest cover
per cent
 Look at the level of borrowing in relation to share capital -1 am not sure I want to invest in a company that is
37 highly geared
so
Thehighly geared
company's operating profit for the period is £100,000 and the interest payments for the period are
38 income leverage
£20,000, so they have income leverage of 5
39 return on assets A company's profits in relation to its resources is described as its return on assets
We're very happy with their auditing work, but we're not allowed to use them for management consultancy
40 conflict of interests
services:
It's the jobwe'll need
of the to appoint another
management to detectorganization for that.
fraud and prevent error; however, many managers believe this is the
41 expectation gap
auditors' job.
42 auditor rotation We have used Ames and Company for two years now; it's time we started looking for a replacement.
accounting The company admitted that the announcement of results would be delayed following the discovery of
43
irregularities discrepancies in its previous
Investors in companies want year's
to knowaccounts.
how much the companies are worth, so companies regularly have to
44 value
publish the value of their assets and liabilities.
45 accounting policies Companies can choose their accounting policies — their way of doing their accounts.
46 valuation There are a range of methods of valuation — deciding how much something is worth — and measurement
47 measurement — determining how big something is — that are accepted by law or by official accounting standards
GAAP and IFRS are technical rules or conventions accepted ways of doing things that are not written down
48 conventions
in a law.
There are different ways of doing accounting but companies have to be consistent, which means regularly
49 consistent using the same methods.
Although businesses can choose among different accounting policies, they have to be consistent, which
means using the same methods every year, unless there is a good reason to change a policy: this is known as
50 consistency principles the consistency principles
51 disclosed The policies also have to be disclosed or revealed to the shareholders
52 depreciation reducing the value of assets in the company's accounts
53 provisions amounts
As of always
there is money more
deducted
thanfrom profits
one way — for future
of presenting pensionthe
accounts, payments.
accounts of British companies have to give
54 true and fair view true and fair view of their financial situation — meaning there are various possibilities — rather than the
The
true historical cost—principle
and fair view meaning isonly
thatone
the isprice paid to buy assets, and not their current value, is recorded in
possible
55 historical cost principle accounts.
companies record the original purchase price of assets, and not their (estimated) current selling price or
replacement cost
a successful company that will continue to do business
56 going concern
usually doesn't need to know the current market value of its assets
some countries with regular high inflation (e.g. in South America) use inflation accounting systems that
57 inflation accounting
replacement take account of changing prices
58 systems cost One system used is replacement cost accounting, which values all assets at their current replacement cost
accounting
current replacement — the amount that would have to be paid to replace them now
59
cost
60 Companies’ managers, investors, creditors and the tax authorities all need to know about the size of profits or losses.
61 Companies gave to disclose or make known which accounting methods they are using.
Chapter 6: Financial Statements
 1 bank reconciliation the process of comparing the actual state of the bank account with the bank nominal code in the accounts
2 cash in hand the amount of liquid equity held by an entity at a certain point of time
3 cross-check verify by comparing two sets of data
4 draft a first version
5 invoice the written record of a payment due, which is sent to the customer before payment
6 irregularities Defects, failures of mistakes
7 keep track of follow, or pay attention to (particularly in changeable situations)
a process in which totals from subsidiary nominal accounts are entered into a control account to make it
8 ledger control
easier to interpret the data
9 ledgers accounting books in which accounts were prepared
10 meticulously very careful, paying attention to every detail
additional information added at the end of the accounts to give a full understanding of the company’s
11 notes to the accounts
situation
12 receipt the written record of a payment made, which is given to the customer after payment
13 retain keep in one’s possession
14 to file officially submit a document to a legal entity
15 to post enter or record (a financial transaction)
are probable future economic benefits obtained or controlled by a particular entity as a result of past
16 assets is the changeorinevents.
equity (net assets) of an entity during a period from transactions and other events and
transactions
17 comprehensive income circumstances from non owner sources. It includes all changes in equity during a period except those
are decreases
resulting fromininvestments
net assets ofbya owners
particular
andenterprise resulting
distributions from transferring assets, rendering services, or
to owners.
18 distribution to owners
incurring liabilities to owners. Distributions to owners decrease
is the residual interest in the assets of an entity that remains after deductingownershipits interest or equity
liabilities. in an enterprise
In a business entity,
19 equity are outflows or other uses of assets or incurring of liabilities during a period from delivering or producing
equity is the ownership interest
20 expenses goods or rendering
are increases services,
in equity or carrying
(net assets) out other activities
from peripheral that constitute
or incidental transactionstheofentity's ongoing
an entity major
and from all or
other
21 gains central operation.
transactions and other events and circumstances affecting the entity during a period except those that result
are
fromincreases
revenuesinornet assets of a by
investments particular
owner. enterprise resulting from transfers to it from other entities of
22 investment by owners
something of value to obtain or increase
are probable future sacrifices of economic ownership interestfrom
benefits arising (or equity)
presentinobligations
it. of a particular entity to
23 liabilities are decreases in equity (net assets) from peripheral or incidental transactions of antransactions
entity and from all other
transfer assets or provide services to other entities in the future as a result of past or events.
24 losses transactions and other events and circumstances affecting the entity during a period except
are inflows or other enhancements of assets of an entity or settlement of its liabilities (or a combination those that result
of
25 revenues from expenses or distributions to owners.
both) during a period from delivering or producing goods, rendering services, or other activities that
26 intangible assets constitute the entity's
An asset which ongoing
does not have amajor or central
physical nature operations.
(such as a trademark or a patent)
The holding company owns a minority interest (less than 50%), but the accounts are nevertheless
27 consolidated affiliates
consolidated.
28 total liabilities The total legal obligations of a company to pay other parties.
The ordinary shares held by the owners, who therefore are the last to receive their money back in the event of
29 common stock
liquidation.
30 current receivables Amounts that will be collected in the normal course of business within one year
Profit which is not paid out to shareholders in the form of dividends, but instead is kept by the company to
31 retained earnings
reinvest or pay off debts
 The amounts affecting common stockholders, but not from movements in the stock of the company (e.g.
32 accumulated gains
currency translation adjustments)
33 profit and loss account This is a financial statement which shows the difference between the revenues and expenses of a period
non-profit organization non-profit organization such as charities, public universities and museums generally produce an income
34 income and and expenditure account
expenditure account
35 surplus If non-profit organizations have more income than expenditure this is called a surplus rather than a profit
36 total sales revenue
the total amount of money received during a specific period.
37 turnover
38 cost of sales the costs associated with making the products that have been sold, such as raw materials, labour, and factory
39 cost of goods sold expenses
40 gross
selling, profit and The difference between the sales revenue and the cost of sales is gross profit
general
There are many other costs or expenses that have to be deducted from gross profit, such as rent, electricity
41 administrative expense
and office salaries, grouped together as selling, general and administrative expense (SG&A)
42 (SG&A)
EBITDA earnings before interest, tax, depreciation and amortization
43 EBIT earnings before interest and tax
44 net profit
After all the expenses and deductions is the net profit, often called the bottom line
45 bottom line
46 cash flow statement This gives details of cash flows — money coming into and leaving the business
day-to-day activities
47 operations means making money by selling goods and services
It is better for the company if it can pay for future growth out of money from operations , without having to
use financing
buying or selling property, plant and equipment
48 investing
is spending cash, for the business's future growth, including cash acquired by selling assets
issuing or repaying debt, or issuing shares
involves raising money by issuing stocks and bonds (and also paying dividends and interest and repaying
49 financing
bonds)
a 'healthy' cash flow means that the amount of cash provided by operations is greater than the cash used for
financing
50 funds flow statement
statement of total The cash flow statement shows how effectively a company generates and manages cash
51 recognized gains and any gains and losses that are not included in the profit and loss account, such as the revaluation of fixed assets
losses (STRGL) Chapter 7: The Accounting Equation
the foundation of double entry accounting which shows that all assets are either financed by borrowing
1 accounting equation
money or paying with the money of the company's shareholders
2 capital the total financial value of all assets less any liabilities. The net worth of a company
3 contingent liabilities a potential obligation that may be incurred depending on the outcome of a future event
4 current assets all assets that are expected to be converted into cash within one year of normal business activity
 5 draws the withdrawal of business cash or other assets by the owner for the personal use of the owner
6 goodwill the favour or advantage that a business has acquired especially through its brands and its good reputation
7 income statement the financial statement which measures a company's financial performance over a specific accounting period
8 incur come into or acquire (some consequence, usually undesirable)
9 intangible asset an asset which is not physical in nature
creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used
10 intellectual property
in commerce
11 quantify determine or express the quantity of
12 shareholder equity a firm's total assets minus its total liabilities
13 sole proprietorship a type of business entity that is owned and run by one individual
14 terminology the vocabulary of technical terms used in a particular field
Company law in Britain and the Securities and Exchange Commission in the US require companies to
15 balance sheet
publish annual balance sheet
16 share capital the money the company raises by selling its shares
17 retained earnings profits from previous years that have not been distributed— paid out to shareholders — as dividends
18 distributed paid out to shareholders
19 profit or loss account the profit or loss account and the cash flow statement show how much money a company has spent or
20 cash flow statement received during a year
21 current liabilitiescurrent liabilities are expected to be paid within a year of the date of the balance sheet
22 deferred taxes money that will have to be paid as tax in the future, although the payment does not have to be made now
expenses that have accumulated or built up during the accounting year but will not be paid until the following
year, after the
are charged date of
against the balance
income sheet.
- that is, deducted from profits — even though the bills have not yet been
23 accrued expenses
received or the cash paid.
could include taxes and utility bills, for example electricity and water.
24 shareholders' equity money belonging to the shareholders and not the company
25 share premium money made if the company sells shared at above their face value
26 face value the value written on them
27 reserves funds set aside from share capital and earnings, retained for emergencies or other future needs
28 current assets are things that will probably be used by the business in the near future.
29 work-in-progress partially manufactured products
are assets with a physical existence — things you can touch — such as property, plant and equipment.
30 tangible assets are generally recorded at
their historical cost less accumulated depreciation charges
31 patent exclusive rights to produce a particular new product for a fixed period
32 trademarks names or symbols that are put on products and cannot be used by other companies
33 net assets assets minus liabilities
If a company buys another one at above its net worth, the difference in price is recorded under assets in the
34 goodwill
balance sheet as
35 suppliers are companies that provide other companies with materials, components, etc
36 retained earnings are profits that the company has not distributed to shareholders.
37 assets are things a company owns and uses in its business
38 liabilities consist of everything a company owes
39 shareholders' equity consists of money belonging to a company's owners.
40 current liabilities Money that will be paid in less than 12 months from the balance sheet date
41 share premium The money that investors have paid to buy newly issued shares, minus the shares' face value
42 deferred Delayed, put off or postponed until a later time
43 accrued Built up or increased over a period of time
44 bad debt An amount of money that is owed but probably won't be paid
45 net worth/net assets The accounting value of a company (assets minus liabilities)
46 patent A legal right to produce and sell a newly invented product for a certain period of time
47 net book value The historical cost of an asset minus depreciation charges
48 goodwill The amount a company pays for another one, in excess of the net value of its assets
49 trademark A legally protected word, phrase, symbol or design used to identify a product
50 write off To accept that a debt will not be paid
51 make provisions To deduct money from profits because of debts that will not be paid
52 work-in-progress Products that are not complete or ready for sale
debtors/accounts
53 The amount of money owed by customers who have bought goods but not yet paid for them
receivable
54 A company's value on the stock exchange is nearly always higher than the value of its net assets
55 Brand names, trademarks, patents, customers, and qualified staff are examples of intangible assets
56 Cash, money owed by customers, and inventory are current assets
Companies record inventory at the cost of buying or making the items or the current market price, whichever
57
is lower.
58 Companies write off bad debts, and make provisions by deducting the amount from profits
59 Land, buildings, factories and equipment are examples of tangible, fixed assets
Chapter 8: Depreciation and amortization
accelerated a term used to show that the reduction of an assets value happens faster at the start of its useful life than at the
1
depreciation end
an accounting method that measures the performance and position of a company by recognizing economic
2 accrual accounting
events regardless of when cash transactions occur
3 allocate Distribute according to an existing plan
 4 amortization The deduction of capital expenses incurred on an intangible asset over a specific period of time
a method of depreciation centred around cost recovery and a constant rate of return upon any asset that is
5 annuity depreciation
being depreciated
6 carry over transfer a sum relating to one account to a new column, page, year
7 cash flow the movement of money into and out of a company, firm or legal entity
8 determined by decided by or because of
9 divide split into equal parts or groups
10 finite life a lifespan which is limited to a certain number of years, months, weeks or days
11 multiply increase the number of by the power of x
12 net-book value the current value of an asset shown in the accounting documents
13 salvage value the amount of money that an asset will be worth at the end of its useful life
straight line the method
The asset is for reducing by
depreciated theavalue of a amount
constant tangibleevery
asset year.
by equal
Theamounts overexpense
depreciation its usefulfor
life
each year is
14
depreciation calculated by subtracting the salvage value from the acquisition cost, and the dividing the difference by the
the method
useful life offor
thereducing
asset. the value of a tangible asset by a variable percentage depending on how long the
sum-of-years-digits The
assetdepreciation
has been on expense
the booksis calculated by first subtracting the salvage value from the acquisition cost. The
15
depreciation difference is multiplied by a fractional amount, where the denominator and numerator are based on the
The depreciation
addition is ‘accelerated’
of the figures by useful
in the asset’s this method,
life so that the expense is greater in the first years. The salvage
16 declining balance
value is ignored in the calculation, but the asset will not be depreciated below this value.
17 hours of use The expected usage of the asset is taken into account in determining the rate of the depreciation
18 unit of production The expected output of the asset is taken into account in determining the rate of depreciation.
19 tax income A tax income is the same as a tax declaration – it’s a list of income and tax deductible expenditure for the
20 tax declaration tax authority
21 human capital the perceived value of people and their skills
22 risk capital money invested in a project with a high chance of failure
23 share capital money a company has raised from investors who bought shares
24 venture capital money a company borrows to start up a new business
current replacement
25
cost value The revaluation is at either current replacement cost — how much it would cost to buy
net realizable
26 new ones, or at net realizable value (NRV) — how much they could be sold for
(NRV)
27 market value the price at which something could be sold today
28 the straight line method charging equal annual amounts of depreciation against profit during the lifetime of the asset
29 revalue To record something at a different price
30 current assets Assets that will no longer be in the company in 12 months' time
31 appreciate To increase rather than decrease in value
32 obsolete Out of date, needing to be replaced by something newer
33 fixed assets Assets that will remain in the company for several years
34 wear out To become used and damaged
35 All fixed assets can appreciate if there is high inflation, but historical cost accounting ignores this.
36 Accelerated depreciation allows companies to remove some extremely valuable assets from their balance sheets.
37 Fixed assets generally lose value, except for land, which usually appreciates.
38 The straight-line method of depreciation charges equal amounts against profits every year.
39 Accelerated depreciation reduces companies' tax bills, which encourages them to invest in new factories, etc.
Chapter 9: Management accounting
1 additional in addition to, extra
2 assist help, or make easier
3 benchmarks a standard by which something can be measured or assessed
4 budgeting the process of creating set financial targets which should be met
5 draft prepare a written version of
6 entity a person, partnership, organization, or business that has a legal and separately identifiable existence
7 forecast estimate or calculate in advance
8 in-depth carefully worked out, detailed or thorough
9 indicate show, be a sign of
management the process of preparing management reports and accounts that provide accurate financial and statistical
10
accounting information
11 overheads the ongoing administrative expenses of a business which cannot be matched to any specific business activity
12 period an interval of time characterized by the occurrence of a certain condition, or event
13 risk the possibility of suffering harm or loss
14 takeover the transfer of control of a firm from one group of shareholders to another group of shareholders
15 variance the difference between two figures
Chapter 10: Cost accounting
1 anticipate to imagine or expect that something will happen
2 appreciable large or noticeable enough to have a significant effect
3 attributable to caused by or connected to
4 bottom-line the final line in the accounts, the net profit or loss made by a company
5 breakeven point the figure at which neither profit or loss is made
6 budget a plan that shows how much money you have, will have and what it will be spent on
7 classify to divide things into groups according to their type
 8 cost accounting the process in which all costs are examined
9 cost reduction the process of minimizing any expenses due from direct business activity
10 costs incurred any expenses due as a direct result of business activity
11 feasibility the possibility that can be made, done or achieved or is reasonable
12 implement to put into effect
13 matching principle the idea that expenses should be allocated to a revenue stream where possible
14 notional existing as an idea or as an approximate amount
15 opportunity costs the imagined loss made on not following a certain course of action instead
16 overall in general rather than in particular
17 project to calculate an amount or figure expected in the future based on information in the present
18 relative as judged or measured in comparison with something else
19 successive happening one after another
20 underlying real but not immediately visible
21 overheads expenses that are not clearly related to production or manufacturing
22 cost centre a unit of activity in an organization for which costs are calculated separately
23 variable costs costs that depend on the amount produced
24 profitable adjective meaning providing income for a company
25 fixed costs costs that do not change according to the production volume
26 breakeven point the sales volume at which a company doesn’t make a loss, but doesn’t make a profit
As well as direct manufacturing costs - materials and labour - we allocate part of our fixed and variable
27 absorption costing
manufacturing
We identify all overheads to the
the different cost ofwithin
functions every the
product.
company, and assign costs to products and services
28 activity-based costing
according to how much these functions are involved in the process of providing the products and services.
29 creditor this company has supplied goods but has not received any money for them
30 loss companies make this when they sell their goods for less than it costs them to make them
31 purchases goods which are bought by the company
32 stock goods which the company has available to sell
33 withdrawal an amount of money which is taken out of an account
34 debtors customers who have received goods but not paid for them yet
35 discount a reduction in the price which is offered to customers
36 drawings cash or goods which the owner takes from the company for his own private use
37 goodwill the extra amount which is paid for a company above the value of its assets
38 acquisition the purchase of another company
39 depreciation The loss of value of the things in number
40 loan Money which is borrowed
41 interest The extra money a company or person pays for borrowing money
42 capital The total sum of money which is supplied by the owners of a company to set up
43 shares These are bought by people wishing to invest in the company
44 audit An official examination of the accounts
45 budget A financial plan for the future
46 balance sheet A statement of the financial position of the company
47 profit Companies make this when they sell their goods for more than it costs them to make them
48 trial balance This is drawn up to check that the two sides of the accounts are the same
49 ledgers The official books for keeping accounts
50 separate entity thực thể kinh
accounting entity An enterprise is an accounting unit separate from its owners, creditors, etc
51 doanh
assumption
52 continuity assumption
going-concern The business will continue indefinitely into the future. hoạt động liên tục
53
assumption
unit-of-measure
54 All transactions and other items to be accounted for must be in a single, supposedly stable monetary unit. đơn vị tính
assumption
time-period
55
assumption
accounting period Financial data must be reported for particular (short) periods, which makes accrual and deferral necessary kỳ kế toán
56
assumption
57 historical cost principle The initial price paid for the acquisition of assets is the one that is recorded in accounts. nguyên tắc giá gốc
58 revenue principle nguyên tắc ghi
Revenue is realized at the moment when goods are sold (or change hands) or when services are rendered.
59 realization principle nhận doanh thu
nguyên tắc phù
60 matching principle This leads to the accrual (accumulation) and deferral (postponement) of costs.
This is one of the justifications for historical cost accounting, which requires no subjective assessments of hợp
nguyên tắc khách
61 objective principle
replacement values. quan
nguyên tắc nhất
62 consistency principle This prevents companies selecting methods according to the inflation rate, etc.
quán
63 full-disclosure principle This means that insignificant trivial expenses, like each pencil or typewriter ribbon, need not be accounted nguyên tắc trọng
64 principle of materiality for separately, but are exempted by principle of materiality yếu
principle of nguyên tắc thận
65 This is the contrary of recording “below-the-line” items
conservatism Bookkeepers record every purchase and sale that a business makes, in the order that they take place, in trọng
66 journals
journals
67 posted
At a later date, these temporary records are entered in or posted to the relevant account book or ledger
68 ledger
69 transferred
At the end of an accounting period, all the relevant totals are transferred to the profit and loss account
 At the end of an accounting period, all the relevant totals are transferred to the profit and loss account
70 profit and loss account
double entry double entry bookkeeping records the dual effect of every transaction – a value both received and parted
71
bookkeeping with the seller of goods or services sends the buyer a bill or invoice, and later a receipt acknowledging
In most business transactions,
72
payment. Businesses are obliged to retain the documents – known as vouchers – that support or prove an item in an
73 vouchers
account, and make them available to the internal and external auditors who check the accounts
Chapter 11: International accounting
1 accurate free from errors, careful
allowance for
2 a contra asset account recording debts which may not be collected
uncollectable accounts
3 amend to improve by correcting exiting information
4 apply to be suitable, pertinent or relevant to
5 assist to give help to
6 comptroller the person in charge of the financial accounts of a company
7 current new, present or most recent
8 declare to make known, announce officially or state clearly
9 dividend a sum of money paid to shareholders
10 escrow a contract, deed or bond which is deposited with a third person
11 exemption not included within, unaffected by
12 extraordinary item gain or loss included in financial reports which come from infrequent or unusual sources
13 income
IFRS statement
(international a financial report which shows the firms net profit or loss over a given period
14 financial reporting A common set of accounting principles
15 standards)
inventory a complete listing of all goods held by an entity, or the goods which are on the list
16 oversee to supervise
17 record to set down in writing
18 regulation a law, rule or other obligation set by an authority
19 split to divide between two or more
20 supersede to replace in power, validity or effectiveness
This principle is concerned with the timing of the recognition of transactions in the accounts. Items are
21 the matching principle When preparing accounts, one must assume that the enterprise will still be viable in the years to come.
the going concern recorded when the income or expense arises, and are not dependent on the movement of cash.
22 Practically all accounting items are affected by this assumption, such as the carrying value of fixed assets and
principle What value should be given to the numbers in the accounts? It is normal to act pessimistically, so that profits
23 the prudence principle inventories, and the ability to repay debts and other obligations
the consistency and assetsshould
Accounts are notbe
overstated,
produced and expenses
using the sameand liabilitiesfrom
principles realistically
one yearvalued.
to the next. Deviations from this
24 As accountants wenoted,
shouldand
view
principle principle must be thethe business
effects and
on the its transactions
accounts shown. in a dispassionate way. The accounts should
25 objectivity principle not be prepared with any personal bias. To avoid this bias figures should, where possible, be backed by
certified public source documents.
26 An accountant who has passed examinations required by the state licensing officials.
accountant
27 budget A plan of expected income and expenditure for a particular period of time.
28 master budget The total of separate budgets from different departments within a company.
29 management The people who control a company.
30 fiscal year The period used by companies and governments for accounting and tax purposes
31 audit A detailed inspection of the accounts of an organization by a professionally trained person.
32 financial statement A report showing profit and loss for a business or institution
33 books The books, files or computer records where a company's accounts are kept
34 external audit An audit carried out by a person not employed by the company
35 forecast A statement about what one thinks will happen in the future
36 objective An aim or target
37 work load The amount of work to be done
governmental
38 A specialized branch of accounting that deals with government agencies
accounting
39 bookkeeping The recording of all money received into and paid out of a company in a book or on a computer file.
40 lay-off Dismissing a worker for a period of time.
41 liquidator The person appointed by the court to close a company and dispose of its assets.
42 creditor A person or an organization that you owe money to
43 insolvent To be unable to pay your debts
44 go bust To become bankrupt.
45 decline A reduction in the amount or quality of something
46 ordinary As AZ Designs Ltd is a small printing company, all their printing contracts are known as ordinary activities.
Recently, a film a fill company paid AZ Designs a large amount of money to use the company’s premises
47 extraordinary income
when they were making a film. This was recorded in the Profit and Loss Account as extraordinary income
48 turnover Income which the company makes in its normal activities is known as turnover
At the end of the year, some of the profits may be shared out among the shareholders who will receive a
49 dividend
dividend
The costs of getting the goods to the customers are shown as distribution costs in the Profit and Loss
50 distribution
Account.
51 cost of sales Materials which are used up in manufacturing and workers’ wages are recorded as cost of sales
administrative
52 The secretary’s salary and expenses incurred in the office are shown as administrative expenses
expenses The company may decide to keep some of the profits at the end of the year and the amount is shown as
53 retained profits.
retained
Small profits.
amounts of money which are paid out for things such as petrol, soap, and bus fares are usually
54 petty cash
recorded in the petty cash book.
55 beneficiary The account which receives payment is known as the beneficiary
56 emitter the account sending payment is the emitter
57 transaction Each single movement of money in the account is known as a transaction
58 brought forward At the beginning of each month the balance from the previous month is recorded at the top of the account as
59 carried forward brought forward and at the end of the month as balance carried forward
The bank statement should be checked against the cash book to make sure the figures are the same and that
60 discrepancies
there
Whenare no discrepancies
several payments are made by computer banking they are normally transmitted to the bank together in
61 batch
aIf batch
double entry has taken place within the cash book the item does not need to be entered in another book as
62 contra đối chiếu
double entry and the item is known as contra
63 cleared When a cheque is received and paid into an account it will be debited to the account once it has been cleared đồng ý thanh toán
Before instructions can be transmitted to the bank it is necessary to have authorization from one, two or
64 authorization
possibly three
There will executive
normally be aofficers.
maximum amount of money which can be transferred from an account and this is
65 threshold
known as the threshold
66 denomination This company has issued shares in £5 denomination
At the end of the financial year, profits are first of all allocated to pay the fixed percentage dividends on
67 preference shares
preference shares.
68 ordinary shareholders The ordinary shareholders have voting rights but do not have a fixed percentage dividend
69 bonus shares The company have decided to issue bonus shares free of charge to their existing share holders.
70 nominal capital
authorized share The company is allowed to issue a total amount of shares known as the authorized share capital or nominal
71
capital capital. However, the issued capital may be less than that
72 issued capital
73 preliminary There were large preliminary expenses in starting the company.
74 uncalled capital They have only asked for some of the amount payable on the shares, so there is still a lot of uncalled capital.
75 redeemable 2001/2009 written behind a debenture means that it is redeemable during that time
The final accounts should include an appropriation account which shows how the company will use the
76 appropriation
profits.
77 interim After trading for six months, the company paid out an interim dividend.
Chapter 12: Taxes
anti-avoidance
1 the laws which govern the correct payment of taxes
legislation
the tax on the increase of value of a capital asset which is then sold
Most countries have a capital gains tax on profits made from the sale of assets such as stocks or shares. This
2 capital gains tax
is usually imposed or levied at a much lower rate than income tax.
a type of tax levied on capital gains incurred by individuals and corporations
CEO (chief executive
3 the highest rank in a company
officer)
the duty which is levied on the sale or purchase of goods
4 consumption tax
a tax that is added to the price of goods or services which are bought by the public
the tax which
Companies is corporation
pay paid on the earnings of a corporation,
tax on their or entity
profits. Business being
profits are treated as ataxed
generally corporation
twice, because after the
5 corporation tax company pays tax on its profits, the shareholders pay income tax on any dividends received from these
profits.
a tax on company’s profit
 6 defer put off or postpone to a later date
7 liquidate convert into cash
8 minimize try to make as small or little as possible
any capital asset which is retained by the company and not likely to be turned into cash within one year under
9 non-inventory asset
normal trading conditions
10 obliged to to have an obligation to do something
11 offset place over against; to balance; as, to offset one account or charge against another
PAYE (pay as you
12 the system of payroll in the UK, by which employers pay all employees
earn)
13 statutory of, or relating to a legal statute
an amount of money that a taxpayer is able to subtract from the amount of tax that they owe to the
14 tax credit
government
15 taxable earnings the gross profit of a company or individual on which tax is due
taxation is the system by which a government takes money from people and spends it on things such as
16 taxation
education, health, and defence
17 direct taxes direct taxes are collected by the government from the income of individuals and businesses.
18 capital transfer tax
19 death duty is usually imposed on inherited money or property.
a type of tax levied on capital gains incurred by individuals and corporations
20 inheritance tax is paid from money you have received from someone who has died.
21 estate tax
Individuals pay income tax on their wages or salaries, and most other money they receive.
22 income tax a tax on money received from salary, investments, rent
income tax is paid in relation to how much you earn.
23 taxes - Companies and their employees also have to pay taxes which the government uses to finance social
24 national insurance security spending - unemployment pay, sick pay, etc
25 social security - is a system in which the money collected is given to people who are too old or ill to work.
indirect taxes are levied on the production or sale of goods and services. They are included in the price paid
26 indirect taxes
by the finalpay
companies purchaser
VAT or value-added tax, which is levied at each stage of production, based on the value
added to the product at that stage.
27 value-added tax (VAT) The whole amount is added to the final price paid by the consumer.
is paid to the government on goods and services and can be reclaimed by retailers.
28 sales taxes In the USA, there are sales taxes, collected by retailers, levied on the retail price of goods.
29 excise duties Governments also levy excise taxes or excise duties - additional sales taxes on commodities like tobacco thuế TTĐB
30 excise taxes products, alcoholic drinks and petrol
Special taxes, called tariffs, are often charged on goods imported from abroad
31 tariffs
a tax on goods coming into or out of a country
 a tax that takes a larger percentage from the income of high-income earners than it does from low-income
32 progressive tax
individuals
a tax that takes a larger percentage from low-income people than from high-income people
33 regressive tax
a tax in which poor people pay a higher percentage of their income than rich people
34 direct an adjective describing taxes on revenue or income
35 proportional tax a tax that has one rate that is the same for everybody
income and social
36 money paid by the government to sick and unemployed people
security tax
a tax that has a higher rate for taxpayers with a higher income
37 progressive tax
a tax in which the rate of tax is higher on larger sums of money
38 indirect an adjective describing taxes on consumption or spending
39 indirect tax indirect tax is charged on goods and services rather than on the money that people earn.
40 tax system is a legal system for assessing and collecting taxes
41 applicable relating to, or having to do with
42 bracket a set group with fixed upper and lower limits
43 burden a large amount of money that you owe, or the responsibility to pay this money
44 generate to produce or create something
45 import duty a tax placed on goods coming into one country from another
46 in effect to be active, or being used
47 offset to balance one influence against another
48 organ an organization that works as part of a larger organization
49 per annum annual or each year
50 raw materials a substance in its natural state which is used to make something in an industrial process
51 retail the activity of selling goods to the general public
52 subject to to have or experience a particular thing (usually unpleasant)
53 tax break a legal means to pay less in taxes
54 tax credit an amount of money, calculated on personal situation, that reduces tax payable
55 tax reduction an amount of money, not calculated on personal situation, that reduces tax payable
56 wholesale the activity of selling goods in large amounts to businesses which then sell on to the public
57 national insurance national insurance is a tax which is taken from pay for the UK's health and social security system.
58 corporation tax corporation tax is payable on worldwide profits.
59 withholding withholding is a method of collecting taxes.
60 tax return In a tax return you give information about what you earn every year.
61 fiscal year A fiscal year is a period of twelve month arbitrarily chosen for tax purposes
Value Added Tax
62 Value Added Tax (VAT) is paid to the government on goods and services and can be reclaimed by retailers.
(VAT)
63 tax inspector A tax inspector is a person who decides how much tax an individual should pay
HMRC (Her Majesty's
64 In Britain HMRC is the government office which collects the main taxes.
Revenue and Customs)
Chapter 14: Auditing
1 abnormality something which is not typical or appearing to be right
2 act on do something as a reaction
3 adhere to follow or obey
4 audit an examination of records or financial accounts to check their correctness
5 control a standard of comparison for checking or verifying the results
6 defraud illegally take money from someone by using deceit
7 itemization to place individual items as a list
8 objectivity the state of being uninfluenced by emotions or personal prejudices
9 outcome the end result
10 sloppy untidy or with mistakes
11 sound having a firm basis
12 statistical sampling the process of checking an entity based on a small amount of data taken at random
13 transparency the state of providing clear visible information to all involved in an activity
14 validity being correct and valid
15 verify prove the truth of by presentation of evidence or testimony
16 auditing auditing may be defined as the examination and record testing of financialstatements.
17 auditors In all countries of the world society relies heavily auditors for credible financial reports
In Britain, for example, all public corporations and many companies applying for sizable loans must have
18 public corporations
their statements audited
19 improvement the act of improving or the state of being improved
20 adjustment a control for regulating
21 illegal forbidden by law; unlawful; illicit
22 appropriate right or suitable; fitting
23 to lessen to make or become less
24 to evaluate to judge or assess the worth of; appraise
25 the management the members of the executive or administration of an organization or business
26 to reinforce to give added strength or support to
27 discrepancy an illogical or surprising lack of compatibility or similarity between two or more facts
28 fraudulent obtained, done by, or involving deception, especially criminal deception
29 a report an account in permanent form, esp. in writing, preserving knowledge or information about facts or events
30 a loan property lent, esp. money lent at interest for a period of time
31 an opinion judgment or belief not founded on certainty or proof
an account prepared for the benefit of others, esp. one that provides
32 a record
information
to obtained through
examine, investigate, or make investigation
an inquiry into (facts, a product, etc.) for accuracy, quality, or progress, esp
33 to check
rapidly or informally
34 to confirm to prove to be true or valid; corroborate; verify
35 limited having a limit; restricted; confined
36 assurance a statement, assertion, etc., intended to inspire confidence or give encouragement
37 auditor a person qualified to audit accounts
38 capability the quality of being capable; ability
39 internal audit
an internal audit is an examination of a company's accounts by its own internal auditors or controllers
40 controllers
After bookkeepers complete their accounts, and accountants prepare their financial statements, these are
41 internal auditors checked by internal auditors
Company employees who check the financial statements
They make sure that the accounts comply with, or follow, established policies, procedures, standards, laws
comply with
42 and
Theyregulations.
check to see that these are adequate or sufficient and, if necessary, recommend changes to existing
recommend
policies and procedures.
independent auditors who do not work for the company.
43 external auditors Expert accountants working for independent firms who review companies' financial statements and
accounting records
44 accountants People who prepare financial statements
45 bookkeepers People who prepare a company's day-to-day accounts
Chapter 15: The future of accounting
1 arising from to happen because of, or owing to
2 billable time spent working that you can charge money for
3 commodity a product, or financial product that can be traded
4 compliance the procedure of obeying a law, regulation or rule
5 cottage industry a business activity in which there are many individuals or small firms working
6 duplication the practice of doing the same thing more than once
7 estimate to say what you believe the cost, size, value of something is when you are not certain
8 In conjunction with combined with
 9 integrate to combine two or more things to make it more effective
10 merge to join together, or be joined together - to make a larger company
11 outsource to employ an outside company to do work for you
12 prior before, previous
13 range of a set of similar products or services which are sold by a company
14 reallocation changing the way in which an amount of money, asset, time is used
15 red tape official rules and procedures which seem unnecessary and cause delay
16 speculate to guess, to form opinions without having all information
17 stay afloat have enough to remain in business
18 take into account to consider or remember something when evaluating a situation
19 trend a general development or pattern in the way people behave
20 undertake to do,
the or begin
system to do something
of recording and summarizing business and financial transactions and analyzing, verifying, and
21 accounting reporting
22 impact theforce
the results
of impression of one thing on another: a significant or major effect
a prevailing tendency or inclination; a line of general direction
23 trend
or movement
one of the elements or factors making up a complete
24 dimension
characterizedorby
personality entity
systematic comparison especially of
25 comparative
likenesses and dissimilarities
26 dynamic marked by usually continuous and productive activity or change
something established by authority, custom, or general consent
27 standard
as a model or example
28 requirement something that is needed or that must be done
the quality or fact of having parts that disagree with each other adjustment of differences and inconsistencies
29 inconsistency
among differentmethods, procedures, schedules, specifications,
measurements,
30 harmonization
or systems to make them uniform or mutually compatible
Extra materials
1 Exponent People who support a theory, idea, plan
2 Compelling Strong, powerful
3 Bore no resemblance To be completely different from
4 Batch Group, amount
5 Seminal Recognised as very important
6 Moved on Progressed, advanced
7 Tract Pieces of writing
8 Make-up Structure, mixture
 9 Apportioned To divide
10 Opting to To choose, divide
11 Malpractice Dishonest/illegal behaviour
12 Disruption Disturbance/upset
13 Scrutiny Careful inspection
14 Beneficiaries Those who gain from an action/event
15 Rotation Change
16 Safeguard Protect
17 Diverge Become different
18 Periodic From time to time
19 Sustain Maintain
20 Gulf Gap/wide space
21 Non-deductibility Cannot be removed
22 Driving force Main cause
23 Intangibles Not visible
24 Overlooked Not noticed
25 Elect Choose
26 Eliminate Get rid of
27 Composition Structure
28 Contemplated Possible
29 Constraints Limitations
30 Allocated Given to
31 Provision System
32 Fleeting Very temporary
33 Ensued Followed
34 Hostile Aggressive
35 Fatalistically Without protest
36 Dividends That part of company profits is distributed to shareholders
37 Debtors Those who owe money to the company
Provisions for liabilities
38 Money reserved for future charges (eg: deferred taxation, pensions)
and charges
39 Shareholders funds Net value of company and emergency funds
40 Revaluation reserves Profit/loss resulting from recalculating the value of an asset
41 Current liabilities Debts that must be paid very soon by the company
42 Share premium Income from the company shares sold at above face value
43 Fixed assets Asset of a long-lasting, unchanging nature
44 Capital and reserves Section which shows ownership of the company
45 Exceptional item Income of expenditure of an unusual nature
46 Minority interests Part of a subsidiary company not owned by the holding company
47 Profit retained Profits not distributed to shareholders
48 Called-up share capital Amount shareholders have been asked to pay
49 Supplemental interest Extra interest payment if the company pays off a bond
Earnings per ordinary
50 Company's annual net income divided by a number of equity shares
share
Creditors due within
51 Those debts the company must pay within 12 months
one year
52 Current assets Assets consumed in the production process
53 Combination Set/group
54 Workable Useful
55 Disclose Show/tell
56 Absolute Non-comparative
57 Detect Discover
58 Positioned Located
59 Assets The things of monetary worth that a company owns
60 Capital The value of a company's initial capital
61 Reserves Profits which have not been paid out
62 Liabilities Non-owner claims against the company
63 Equity Owner's claims against the company
64 Net assets The company's worth minus its debts to external creditors
65 Staggered on Continued with difficulty
66 Succinct Brief
67 Specifically To be exact
68 Got to grips with Began to deal with
69 Format System
70 Serve Act
71 Constitutes Forms
72 By virtue of Due to
73 Refinements Improvements
74 Contrived Artificial