Our group is composed by:
JENNIFFER ASTRID COLLAZOS CRUZ
JOHN EMERSON TORRES VANEGAS
JENNIFFER CERON CORREA
THE BALANCE SHEET 1
11.1 Are the following statements true or false? Find reasons for your answers in A and B opposite.
1. British and American balance sheets show the same information, but arranged differently
This sentence is true, American companies show the assets to the left and the liabilities and capital on the right. In Britain companies use a vertical format, assets are up and liabilities and capital down.
2. The revenue of the company in past year is shown on the balance sheet
This sentence is false; the revenue of the company is shown in the statement “the profit and loss account”
3. The two sides or halves of a balance sheet always have the same total.
Is true, the side in where is the total of assets must be same to the total of liabilities and the capital.
4. The balance sheets gives information on how much money the company has receives from sales of shares.
Yes, in the balance sheet shown the sales of shares, because this item is part of the capital account and in this financial statement shown the assets accounts, liabilities accounts and capital accounts.
5. The assets total is always the same as the liabilities total.
No, the assets total must same to the liabilities total and the shareholders’ equity.
6. The balance sheet tells you how much money the company owes.
Yes, the balance sheet shown how much money the company owes, this is in the liabilities accounts.
11.2 Complete the sentences. Look at A and B opposite to help you
1. SUPPLIERS are companies that provide other companies with materials, components, etc.
2. RETAINED EARNINGS are profits that the company has not distributed to shareholders
3. ASSETS are things a company owns and uses in its business
4. LIABILITIES consist of everything a company owes
5. SHAREHOLDERS EQUITY’S consist of money belonging to a company’s owners
11.3 Make word combinations using a word from each box. Then use word combinations to complete the sentences below. Look at A and B opposite to help you
1. We retain a lot of our profits because we don't distribute any of our earnings to the shareholders
2. Most businesses have customers who owe money, because they grant the 30 or 60 days credit
3. We have a lot of liabilities that we'll have to pay later this year
THE BALANCE SHEET 2: ASSETS
12.1 Find words and expressions in A, B and C opposite with the following meanings.
1. An amount of money that is owed but probably won’t be paid
In this case, the company must make a provision: that is, deducting the amount of the debt from the year’s profits.
2. The accounting value of a company (assets minus liabilities)
A going concern should be worth more on the stock exchange than simply its net worth or net assets: assets minus liabilities
3. A legal right to produce and sell a newly invented product for a certain period of time
Intangible assets include exclusive rights to produce a particular new product for a fixed period.
4. The historical cost of an asset minus depreciation charges.
Tangible assets are generally recorded at their historical cost less accumulated depreciation charges, the amount of their cost that has already been deducted form profits
5. The amount company pays for another one, in excess of the net value of its assets
if a company buys another one at above its net worth - because of its intangible assets - the difference in price is recorded under assts in the balance sheet as goodwill.
6. A legally protected word, phrase, symbol or design used to identify a product
Intangible assets include brand names or symbols, legally protected, for can’t be used by other company.
7. To accept that a debt will not be paid
if a company thinks a debt will not be paid, it has to anticipate the loss.
8. To deduct money from profits because of debts that will not be paid
It will write off, or abandon, the sum as a bad debt, and make provisions by charging, a corresponding amount against profits: that is, deducting the amount of the debt from the year's profits
9. Products that are not complete ready for sale
Generally, this products are valued at the lower of cost of market, which means whichever figure is lower.
10. The amount of money owed by customers who have bought goods but not yet paid for them
Debtors are companies or people who owe money they will have to pay in the near future.
12.2 Match the two parts of the sentences. Look at A,B and C opposite to help you
1. A company’s value on the stock exchange is nearly always higher than the value of its net assets
2. Brand names, trade marks, patents, customers, and qualified staff are examples of intangible assets
3. Cash, money owed by customers, and inventory are current assets
4. Companies record inventory at the cost of buying of making the items of the current market price, whichever is lower
5. Companies write off bad debs, and make provisions by deducting the amount from profits
6. Land, buildings, factories and equipment are examples of tangibles, fixed assets.
12.3 Sort the following into current, fixed and intangible assets. Look at A and C opposite to help you
1. Current assets
a. Debtors
b. Cash in the bank
c. Stock
d. investments
2. Fixed assets
a. Land
b. Builidings
3. Intangible assets
a. Reputation
b. Goodwill
c. Human Capital
INTERNAL AUDITING
