Банковское дело

Переведенная на английский лекция по теме Money and banking (деньги и банковское дело), the role of banks (роль банков), modern banking (современная банковская система)


                              MONEY AND BANKING
                         (ДЕНЬГИ И БАНКОВСКОЕ ДЕЛО)

                Money and its Funсtions. Деньги, их функции.
    Although the crucial feature of money is its acceptance as the means of
payment оr medium of exchange, money has other functions.  It  serves  as  a
standard of-value, a unit of account, a store of value and ft a standard  of
deferred payment. We discuss each of the functions of money in turn.
                 The Medium of Exchange. Средство обращения.
     Money, the medium of  exchange,  is  used  in  one-half  of  almost  аЦ
exchange. Workers exchange labour services for money. People buy  and  sell
goods in exchange for money. We accept money not to consume it directly but
because it can subsequently be used to pay things we do  wish  to  consume.
Money is the medium through, which people exchange goods and services.
     To see that society benefits from  a  medium  of  exchange,  imagine  a
barter economy.
     A barter economy has no medium of exchange. Goods are  traded  directly
or swapped for other goods.
     In a barter economy, the seller and the buyer each must want  something
the other has to offer. Each person is simultaneously a seller and a buyer.
In order to see a film, you must hand over in exchange a  good  or  service
that the cinema manager wants. There has to  be  a  double  coincidence  of
wants. You have to find a cinema where the manager wants what you  have  to
offer in exchange.
     Trading is very expensive in a barter economy. People must spend a  tot
of time and  effort  finding  others  with  whom  they  can  make  mutually
satisfactory swaps. Since time and effort are scarce  resources,  a  barter
economy is wasteful. The use of monеу - any commodity generally accepted in
payment for goods, services, and debts - makes the trading process  simpler
and more efficient.

               Other Functions of Моnеу. Другие функции денег
    Money can also serve as a standard of value. Society considers it
convenient to use a monetary unit to determine relative costs of different
goods and services. In this function money appears as the unit of account,
is the unit in which prices are quoted and accounts are kept.
    In Russia prices are quoted in roubles; in Britain, in pounds sterling;
in the USA, in US dollars; in France, in French francs. It is usually
convenient to use the units in which the medium of exchange is measured as
the unit of account as well. However there are exceptions. During the rapid
German inflation of 1922 - 1923 when prices in marks were changing very
quickly, German shopkeepers found it more convenient to use dollars as the
unit of account. Prices were quoted in dollars even though payment was made
in marks, the German medium of exchange.
    The situation in Russia nowadays reminds of that of in Germany.
     Money is a store of value because it can be used to make  purchases  in
the future.
     To be accepted in exchange, money has to be a store  of  value.  Nobody
would accept money as payment for goods supplied today  if  the  money  was
going to be worthless when they tried to buy goods with  it  tomorrow.  But
money is neither the only nor necessarily the best store of value.  Houses,
stamp collections, and interest-bearing bank accounts all serve  as  stores
of value. Since money pays no interest and its  real  purchasing  power  is
eroded by inflation, there are almost certainly better ways to store value.
     Finally, money serves as a standard of deferred payment or  a  unit  of
account over time. When you borrow, the amount to be repaid  next  year  is
measured in pounds sterling  or  in  some  other  hard  currency.  Although
convenient, this is not an essential function of money. UK citizens can get
bank loans specifying in dollars the amount that must be repaid next  year.
Thus the key feature of money is its use as a medium of exchange. For this,
it must act as a store of value as well. And  it  is  usually,  though  not
invariably, convenient to make money the unit of account  and  standard  of
deferred payment as well.
               Different Kinds of Money. Различные виды денег
     In prisoner-of-war camps, cigarettes served  as  money.  In  the  19th
 century money was mainly gold and  silver  coins.  These  are  examples  of
 commodity money, ordinary goods with industrial uses (gold) and consumption
 uses (cigarettes), which also serve as a  medium  of  exchange.  To  use  a
 commodity money, society must  either  cut  back  on  other  uses  of  that
 commodity or devote scarce resources to producing additional quantities  of
 the commodity. But there are less expensive ways  for  society  to  produce
 money.
     A token money is a means of payment whose value or purchasing power as
 money greatly exceeds its cost of production or value in uses other than as
 money.
     A $10 note, is worth far more as money than as a 3 x 6 inch  piece  of
 high-quality paper. Similarly, the monetary value of most coins exceeds the
 amount you would get by melting them down and selling off the  metals  they
 contain. By collectively agreeing to use token money, society economizes on
 the scarce resources required to produce money as  a  medium  of  exchange.
 Since the manufacturing costs  are tiny,  why  doesn't  everyone  make  $10
 notes?
     The essential condition  for  the  survival  of  token  money  is  the
 restriction of the right to supply it. Private production is illegal:
     Society enforces the use of token money by making it legal tender. The
 law says it must be accepted as a means of payment.
     In modern economies, token money is supplemented by IOU money.
     An IOU money is a medium of exchange based on the debt  of  a  private
 firm or individual.
     A bank deposit is IOU money because it is a debt of the bank. When you
 have a bank deposit the bank owes you money. You  can  write  a  cheque  to
 yourself or a third party and the bank  is  obliged  to  pay  whenever  the
 cheque is presented. Bank deposits are a medium of  exchange  because  they
 are generally accepted as payment.

                              VOCABULARY NOTES


    the means of payment - средство платежа
    medium of exchange - средство обращения
    a standard of value - мера стоимости
    a unit of account - единица учета
    a store of value - средство сбережения (сохранения стоимости)
    a standard of deferred payment - средство погашения долга
    subsequently - впоследствии
    a barter economy - бартерная экономика
    to swap (also swop; syn. to exchange, to barter) - обменивать, менять
    to hand over in exchange - передать, вручить в обмен
    a double coincidence of wants - двойное совпадение потребностей
    a monetary unit - денежная единица
    to remind of - напоминать
    to be worthless - обесцениваться
    an interest-bearing bank account - счет в банке с выплатой процентов
    to pay interest - приносить процентный доход
    to erode - зд. фактически уменьшать
    hard currency - твердая (конвертируемая) валюта
    soft currency - неконвертируемая валюта
    invariably - неизменно, постоянно
    prisoner-of-war camp - лагерь военнопленных
    commodity money - деньги - товар
    token money - символические деньги (дензнаки)
    inch - дюйм (равен 2,5 см)
    to melt down - расплавить
    tiny costs - мизерные затраты
    legal tender - законное платежное средство
    to supplement - дополнять
    IOU money - I owe you - я вам должен; деньги - долговое обязательство
    a bad deposit - вклад в банке

                       THE ROLE OF BANKS (РОЛЬ БАНКОВ)
    The following story is going to explain the role of banks. In the  past
most societies used different objects as money. Some of these were  valuable
because they were rare and beautiful, others- because they  could  be  eaten
or used. Early forms of money like these were used to buy goods.  They  were
also used to pay for marriages,  fines  and  debts.  But  although  everyday
objects were extremely practical kinds of cash in many ways, they  had  some
disadvantages, too. For example, it was difficult  to  measure  their  value
accurately, divide some of them into a -wide range of amounts, keep some  of
them for a long time, use them to make financial plans for the  future.  For
reasons such as these, some societies began to use another  kind  of  money,
that is, precious metals.
    People used gold, gold bullion, as money. Those were  dangerous  times,
and people wanted a safe place to keep their  gold.  So  they  deposited  it
with goldsmiths, people who worked with gold for jewellery  and  so  on  and
also had a guarded vault to keep it safe in. And when people wanted some  of
their gold to pay for things with,  they  went  and   fetched  it  from  the
goldsmith.
    Two developments turned these goldsmiths into bankers.  The  first  was
that people found it a lot easier to give the seller a letter  than  it  was
to fetch some gold and then physically hand it  over  to  him.  This  letter
transferred some of the gold they bad at  the  goldsmith's  to  the  seller.
This letter we would nowadays call a cheque.  And,  of  course,  once  these
letters or cheques, became acceptable as a way of paying for  goods,  people
felt that the gold they had deposited with the goldsmith, was just  as  good
as gold in their own pockets. And as letters  or  cheques,  were  easier  to
carry around than gold, and a lot less  dangerous,  people  started  to  say
that their money holdings were what they had with them plus their  deposits.
So a system of  deposits  was  started.  The  second  development  was  that
goldsmiths realized they had a great deal of  unused  gold  lying  in  their
vaults doing nothing. This development was actually  of  greater  importance
than the first.
     Now let's turn to the first bank loan ever and  see  what  happened.  A
firm asked a goldsmith for a loan. The goldsmith realized that some of  the
gold in his vault could be lent to the firm, and of  course  he  asked  the
firm to pay it back later with a little interest. Of course, at that moment
the goldsmith was short of gold,  it  wasn't  actually  his  gold,  but  he
reckoned it was unlikely that everyone who  had  deposited  gold  with  him
would want it back at the same time, at any rate - not before the firm  had
repaid him his gold with a little interest. He thought it safe enough.
     To understand what actually happened in this simple transaction  let's
 consider the following table.
   Таbl. 6. Goldsmiths as bankers
|                         |Assets               |Liabilities    |
|1. Old-fashioned         |Gold $100            |Deposits $100  |
|goldsmith                |Gold $90 + loan 10   |Deposits $100  |
|2. Gold lender           |Gold $l00 + loan $10 |Deposits $110  |
|3. Deposit lender Step 1 |Gold $90+loan $10    |Deposits $100  |
|                         |                     |               |
|4. Deposit lender Step 2 |                     |               |

     The first row shows what the goldsmith did before he made  this  loan-
 He had a hundred dollars of gold, which he  owed  to  the  people  who  had
 deposited it with him, so his assets and liabilities  were  the  same.  But
 when he lent, say, $10 of gold to the firm, he actually  had  only  $90  of
 gold in his vault plus the value of his loan. His assets still equalled his
 liabilities, but he was going to get some interest
     It so happened that the firm, that took out the  loan,  didn't  really
 want to carry that $10 of gold around, so It asked me goldsmith if, instead
 of actually taking the gold, it could be given a deposit. The third row  of
 Tabl. 6 shows what happened  then.  Although  the  goldsmith's  assets  and
 liabilities were the same, but were then worth $110,  not  $100.  When  the
 firm wrote a cheque for $10, and that person came in  to  collect  his  $10
 worth of gold, the goldsmith's assets failed, but so  did  his  liabilities
 (the fourth row of the table). The important point to notice here  is  that
 it made no difference to the goldsmith whether  his  initial  loan  was  in
 actual gold or in a form of a deposit.
     Now let's turn to the question of reserves. Reserves are the amount of
 gold that is  immediately  available  in  the  vault  to  meet  depositors'
 demands. People originally deposited $100 of gold with the  goldsmith.  The
 goldsmith lent $10, leaving himself with $90. As a banker he was relying on
 the fact that not everyone would want their gold back at the same time.  If
 they had done, be couldn't have paid out. His  reserves  of  $90  were  not
 enough.
     The goldsmith in the table has a 100% reserve ratio. The reserve ratio
 is the ratio of reserves to deposits. Once he has made his loan, he  has  a
 90% deposit ratio. This is a small risk with a small profit. How much  dare
 he lend out in order to make a profit through his interest  charges?   What
 are the risks involved? Suppose the goldsmith took too much of a  risk.  He
 lent 80% of the gold he had. This panicked people. They  doubted  he  could
 pay them all back, he was bound to lose some of the gold he  had  lent,  so
 they rushed to get their gold back before it was too late. That was what we
 would now call a run on the bank, a  financial  panic.  And  the  financial
 panic leads to exactly what people fear:  the bank cannot  pay  them,  goes
 bankrupt, and they go bankrupt as well.



     VOCABULARY NOTES
    rare - редкий
    lines - штрафы
    to measure their value accurately - точно измерить их стоимость
    (ценность)
    to divide into a wide range of amounts - разделить на много частей
    (маленьких или больших)
    precious metals - драгоценные металлы
    gold bullion - золотой слиток
    to deposit with - хранить, вкладывать
    a goldsmith - золотых дел мастер
    worked with gold for jewellery - делал золотые украшения
    a guarded vault - охраняемый подвал, хранилищ:
    to fetch - приносить, доставать
    to transfer - переводить, передавать
    once these letters or cheques,
    became acceptable as a way of paying for goods - как только (когда) эти
                        письма,  или  чеки,  стали  приниматься  при  оплате
товаров
     their money holdings- деньги, которые  им  принадлежали,  которыми  они
владели
     a bank loan - банковская ссуда, заем
     a little interest - небольшой процент
     the goldsmith was short of gold - у мастера не было достаточно золота
     to reckon - полагать, считать
     at any rate - во всяком случае
     a transaction - сделка
     to owe - быть должным
     assets and liabilities - активы и пассивы
     the vа1uе of his loan - стоимость ссуды, которую он дал
     to equal - равняться, быть равным
     the firm didn't really want to саrry that gold around, so it asked  the
goldsmith If, instead of actually taking the gold,  it  could  be  given  a
deposit - фирма не хотела держать золото при себе (носить золото с собой) и
вместо того, чтобы на самом деле его забрать, попросила мастера принять это
золото на хранение в виде вклада
     (they) were worth $110  -  их  стоимость  составляла,  они  оценивались
(имели ценность) в 110 долларов
     to write (syn. to draw, to issue, to make out) a cheque - выписать чек
     his assets failed - зд. его активы снизились
     to fail - (о банках) обанкротиться
     initial loan - первоначальная ссуда
     reserves - резервы
     the amount of gold that is immediately available in the vault -  запасы
(количество) золота, которое всегда  находится  (и  может  быть  немедленно
получено) в хранилище банка
     depositors' demands - требования вкладчиков
     leaving himself with $90 -оставив себе только 90 долларов
     to rely on - рассчитывать, надеяться на что-либо
     the reserve ratio • резервная норма
     dare - осмеливаться

     to make a profit through his interest charges  -  получить  прибыль  за
счет платежа процентов
    What are the risks involved? - Чем он рискует?
    to panic (panicked) -пугать, приводить в панику
    to doubt - сомневаться
    he was bound to lose some of  the  gold  -  он  непременно  должен  был
потерять часть золота
    a run on the bank - натиск вкладчиков на банк
    the financial panic - финансовая паника
    to fear - опасаться, страшиться
    to go bankrupt - обанкротиться



                               MODERN BANKING
                      (СОВРЕМЕННАЯ БАНКОВСКАЯ СИСТЕМА)
    The  goldsmith  bankers  were  an  early   example   of   a   financial
intermediary.
    A financial intermediary is an institution that specializes in bringing
lenders and borrowers together.
    A commercial bank borrows money from the public, crediting them with  a
deposit. The deposit is a liability  of  the  bank.  It  is  money  owed  to
depositors.  In  turn  the  bank  lends  money  to  firms,   households   or
governments wishing to borrow.
    Banks are not the only financial intermediaries.  Insurance  companies,
pension funds, and building societies also take in money in order to  relend
it. The crucial feature of banks is that some of their liabilities are  used
as a means of payment, and are therefore part of the money stock.
    Commercial banks are financial intermediaries with a government licence
to make loans and issue deposits, including deposits against, which  cheques
can be written.
    Let's start by looking at the present-day UK banking  system.  Although
the details vary from country to country, the general principle is much  the
same everywhere.
    In the UK, the commercial banking system comprises about 600 registered
banks, the National Girobank operating through post  offices,  and  a  dozen
trustee saving banks. Much the most important single  group  is  the  London
clearing banks. The clearing banks are so named because they have a  central
clearing house for handling payments by cheque.
    A clearing system is a set of arrangements in which debts between banks
are settled by adding up all the transactions in a given period  and  paying
only the net amounts needed to balance inter-bank accounts.
    Suppose you bank with Barclays but visit a supermarket that banks  with
Lloyds. To pay for your shopping you write a cheque against your deposit  at
Barclays. The supermarket pays this cheque into its account  at  Lloyds.  In
turn, Lloyds presents the cheque to  Barclays,  which  will  credit  Lloyds'
account at Barclays and debit your account  at  Barclays  by  an  equivalent
amount. Because you purchased goods from a  supermarket  using  a  different
bank, a transfer of funds between the two banks is  required.  Crediting  or
debiting one bank's account at another bank is the simplest way  to  achieve
this.
    However on the same day someone else is probably writing a cheque on  a
Lloyds' deposit account to  pay  for  some  stereo  equipment  from  a  shop
banking with Barclays. The stereo shop pays the cheque  into  its  Barclays'
account, increasing its deposit. Barclays then  pays  the  cheque  into  its
account at Lloyds where this person's  account  is  simultaneously  debited.
Now the transfer flows from Lloyds to Barclays.
    Although in both cases the cheque writer's account is debited  and  the
cheque recipient's account is credited, it does not make sense for  the  two
banks to make two separate inter-bank transactions between  themselves.  The
clearing system calculates the net flows between the member  clearing  banks
and these are the settlements that they make between  themselves.  Thus  the
system of clearing cheques represents another way society reduces the  costs
of making transactions.

               The Balance Sheet of the London Clearing Banks.
               Балансовый отчет лондонских клиринговых банков
     Таbl. 7 shows the balance sheet of the London clearing banks.  Although
more complex, it is not fundamentally different from the balance  sheet  of
the goldsmith-banker shown in Таbl 6. We'll begin by discussing  the  asset
side of the balance sheet.

The Balance Sheet of the London Clearing Banks.

|Assets                    |Јb    |Liabilities                |Јb   |
|Sterling: Cash Bills and  |2,9   |Sterling: Sight deposits   |54,1 |
|market loans              |34,7  |Time deposits              |     |
|Advances                  |83,0  |CDs                        |59,9 |
|Securities                |9,4   |                           |     |
|Lending in other          |54,6  |Deposits in other          |8,1  |
|currencies Miscellaneous  |15,5  |currencies Miscellaneous   |     |
|assets                    |200,1 |liabilities                |46,2 |
|TOTAL ASSETS              |      |TOTAL LIABILITIES          |31,8 |
|                          |      |                           |200,1|

    Cash assets are notes and coin in the  banks'  vaults.  However,  modem
banks' cash assets also include their cash reserves deposited with the  Bank
of England. The Bank of England (usually known as the Bank) is  the  central
bank or banker to the commercial banks.
    Apart from cash, the other entries on the asset  side  of  the  balance
sheet show money that has been  lent  out  or  used  to  purchase  interest-
earning assets. The second item, bills and market  loans,  shows  short-term
lending in liquid assets.
    Liquidity refers to the speed and the certainty with which an asset can
be converted back into  money,  whenever  the  asset-holders  desire.  Money
itself is thus the most liquid asset of all.
    The third item, advances, shows lending to households and firms. A firm
that has borrowed to see it through a sticky  period  may  not  be  able  to
repay whenever the bank  demands.  Thus,  although  advances  represent  the
major share of clearing bank lending, they are  not  very  liquid  forms  of
bank lending. The fourth item, securities, shows bank purchases of interest-
bearing  hug-term  financial  assets.  These  can  be  government  bonds  or
industrial shares. Although these assets  are  traded  daily  on  the  stock
exchange, so in principle these securities can be cashed  in  any  time  the
bank wishes, their price  fluctuates  from  day  to  day.  Banks  cannot  be
certain how  much  they  will  get  when  they  sell  out.  Hence  financial
investment in securities is also illiquid.
    The final two items on the asset side of the balance sheet show lending
in foreign currencies and miscellaneous bank assets.  Total  assets  of  the
London clearing banks were Ј200,1 billion. We  now  shall  examine  how  the
equivalent liabilities were made up.
     Deposits are chiefly of two kinds: sight deposits  and  time  deposits.
Whereas sight deposits can be withdrawn on  sight  whenever  the  depositor
wishes, a minimum period of notification must be given before time deposits
can be withdrawn. Sight deposits are the bank accounts  against,  which  we
write cheques, thereby running down our deposits without  giving  the  bank
any prior warning. Whereas most banks do not pay interest on sight deposits
or cheque (checking) accounts, they can afford  to  pay  interest  on  time
deposits. Since they have notification of any withdrawals, they have plenty
of time to sell off some of their high- interest  investments  or  call  in
some of their high-interest loans in order to have the  money  to  pay  out
deposits.
     Certificates of deposit (CDs) are an extreme form of time deposit where
the bank borrows from the public for a specified period of time  and  knows
exactly when the loan must be repaid. The final liability items in Таbl.  7
show deposits in foreign currencies,  miscellaneous  liabilities,  such  as
cheques, in the process of clearing.



    VOCABULARY NOTES
    a financial intermediary - финансовый посредник
    to bring together - соединять, сводить вместе
    insurance companies - страховые компании
    pension lands - пенсионные фонды
    the money stock - денежная масса, деньги в обращении
    to issue deposits - открывать вклады
    the National Girobank - англ. Национальный жиробанк
    trustee saving banks - доверительные сберегательные банки
    London clearing banks - лондонские клиринговые банки (банки - члены
расчетной палаты)
    a central clearing house - центральная расчетная палата
    inter-bank accounts - межбанковские счета
    Barclays - Барклайз банк (Великобритания)
    Lloyds - Ллойдз банк (Великобритания)
    to credit - кредитовать
    to debit - дебетовать
    cheque recipient - получатель чека
    cash assets - денежные активы
    the Bank of England - Банк Англии, Английский банк
    interest-earning (syn. interest-bearing) assets - активы, приносящие
процентный доход
    bills and market loans - векселя и рыночные займы
    short-term lending - краткосрочное кредитование
    liquid (ant. illiquid) assets - ликвидные активы
    liquidity - ликвидность
    advances - ссуда в вида аванса
    a sticky period - трудный период
     securities - ценные бумаги
     interest-bearing long-term financial assets - долгосрочные финансовые
активы, приносящие процентный доход
     government bonds - государственные облигации
     industrial shares - промышленные акции
     the stock exchange - фондовая биржа
     niscellaneous bank assets - прочее имущество банка
     sight deposit - депозит до востребования; бессрочный вклад
     time deposit - срочный вклад
     to withdraw - отзывать (вклад)
     to run down a deposit - уменьшать вклад
     cheque (checking) accounts - текущий (чековый) счет
     to sell off - распродавать
     cad in high-interest loans - требовать возврата займов (требовать
уплаты процентов)
    certificates of deposit - депозитные сертификаты
    miscellaneous liabilities ' прочие (другие) пассивы

                     1. GENERAL DEFINITION OF ACCOUNTING

     Today, it  is  impossible  to  manage  a  business  operation  without
 accurate  and  timely  accounting  information.  Managers  and   employees,
 lenders, suppliers, stockholders, and government agencies all rely  on  the
 information contained in two financial statements. These two reports —  the
 balance sheet and  the  income  statement  —  are  summaries  of  a  firm's
 activities during a specific time period. They  represent  the  results  of
 perhaps tens of thousands of transactions that  have  occurred  during  the
 accounting period.
     Accounting is the process of systematically collecting, analyzing, and
 reporting financial information. The basic product that an accounting  firm
 sells is information needed for the clients.
     Many people confuse accounting  with  bookkeeping.  Bookkeeping  is  a
 necessary part of accounting. Bookkeepers are responsible for recording (or
 keeping) the financial data that the accounting system processes.
     The primary users of accounting information are managers.  The  firm's
 accounting system provides the information dealing  with  revenues,  costs,
 accounts  receivables,  amounts  borrowed  and  owed,  profits,  return  on
 investment, and the like. This information can be compiled for  the  entire
 firm; for each product; for . each sales territory,  store,  or  individual
 salesperson; for each division or department; and generally in any way that
 will help those who manage the organization. Accounting  information  helps
 managers plan and set goals, organize, motivate, and control.  Lenders  and
 suppliers need  this  accounting  information  to  evaluate  credit  risks.
 Stockholders and potential  investors  need  the  information  to  evaluate
 soundness of investments, and government agencies need it  to  confirm  tax
 liabilities, confirm payroll deductions, and approve new issues  of  stocks
 and bonds. The firm's accounting system must be able to  provide  all  this
 information, in the required form.

                   2. THE BASIS FOR THE ACCOUNTING PROCESS

    The basis for the accounting process is  the  accounting  equation.  It
shows the relationship among the firm's  assets,  liabilities,  and  owner's
equity.
    Assets are the items of value that a  firm  owns  —'cash,  inventories,
land, equipment, buildings, patents, and the like.
    Liabilities are the firm's debts and obligations  —  what  it  owes  to
others.
    Owner's equity is the  difference  between  a  firm's  assets  and  its
liabilities — what would be left over for the firm's owners  if  its  assets
were used to pay off its liabilities.
    The relationship among these three terms is the following:
    Owners' equity = assets - liabilities
    (The owners' equity is equal to the assets minus the liabilities)
    For a sole proprietorship or partnership, the owners' equity  is  shown
as the difference between assets and liabilities.  In  a  partnership,  each
partner's share of the ownership is  reported  separately  by  each  owner's
name. For a corporation, the  owners'  equity  is  usually  referred  to  as
stockholders ' equity or shareholders ' equity. It is  shown  as  the  total
value of its stock, plus retained earnings that have accumulated to date.
    By moving the above three terms algebraically, we obtain  the  standard
form of the accounting equation:
    Assets = liabilities + owners' equity
    (The assets are equal to the liabilities plus the owners' equity)

                             3. A BALANCE SHEET
    A balance sheet (or statement of financial position), is a summary of a
firm's assets, liabilities, and owners'  equity  accounts  at  a  particular
time, showing the various money  amounts  that  enter  into  the  accounting
equation. The balance sheet must demonstrate that  the  accounting  equation
does indeed balance. That is, it must show that the firm's assets are  equal
to its liabilities plus its owners' equity. The balance  sheet  is  prepared
at least once a year. Most firms also have  balance  sheets  prepared  semi-
annually, quarterly, or monthly.

                           4. AN INCOME STATEMENT
    An income statement is a summary of  a  firm's  revenues  and  expenses
during a specified accounting period.  The  income  statement  is  sometimes
called the statement of income and expenses. It  may  be  prepared  monthly,
quarterly, semiannually, or  annually.  An  income  statement  covering  the
previous year must be included in  a  corporation's  annual  report  to  its
stockholders.

                5. THE IMPORTANCE OF THE ABOVE TWO STATEMENTS

    The information contained in these  two  financial  statements  becomes
more important when  it  is  compared  with  corresponding  information  for
previous years, for competitors, and for the  industry  in  which  the  firm
operates. A number of financial  ratios  can  also  be  computed  from  this
information. These ratios provide a picture  of  the  firm's  profitability,
its short-term financial position, its activity  in  the  area  of  accounts
receivables and inventory,  and  its  long-term  debt  financing.  Like  the
information on the firm's financial statements, the ratios  can  and  should
be compared with those of past accounting  periods,  those  of  competitors,
and those representing the average of the industry as a whole.

                                 Vocabulary
    1. General Definition of Accounting


|general                              |общий                                    |
|accounting                           |счет                                     |
|account                              |(бухгалтерский) учет ведение счетов      |
|impossible                           |невозможный                              |
|manage                               |зд. руководить, управлять                |
|without                              |без                                      |
|accurate                             |точный                                   |
|lender                               |кредитор, заимодавец                     |
|stockholder                          |акционер                                 |
|agency                               |зд. ведомство, орган                     |
|rely (on)                            |полагаться (на)                          |
|statement                            |зд. отчет                                |
|report                               |отчет                                    |
|balance sheet                        |балансовый отчет, баланс                 |
|income statement                     |отчет о доходах                          |
|summary                              |обобщенный отчет, итоги                  |
|specific                             |конкретный                               |
|represent                            |представлять                             |
|perhaps                              |возможно                                 |
|transaction                          |сделка, деловая операция                 |
|occur                                |зд. происходить, иметь место             |
|accounting period                    |отчетный период                          |
|report                               |сообщать                                 |
|needed                               |нужный                                   |
|client                               |клиент                                   |
|confuse                              |смешивать (в уме), путать                |
|bookkeeping                          |счетоводство, ведение бухгалтерских книг,|
|                                     |бухгалтерия                              |
|responsible                          |ответственный                            |
|record                               |записывать, вести учет                   |
|data                                 |данные                                   |
|process                              |обрабатывать                             |
|user                                 |пользователь                             |
|provide                              |обеспечивать                             |
|deal (with)                          |зд. иметь отношение (к)                  |
|revenue                              |доход                                    |
|                                     |                                         |
|                                     |                                         |
|                                     |                                         |
|accounts (debt) receivables          |дебиторская задолженность (долг, который |
|                                     |следует получить компании, счета         |
|                                     |дебиторов, счета к получению             |
|                                     |сумма                                    |
|amount                               |занимать, брать взаймы                   |
|borrow                               |быть должным                             |
|owe                                  |выгода, прибыль                          |
|profit                               |инвестиция, инвестирование               |
|investment                           |прибыль на инвестированный капитал       |
|return on investment                 |и тому подобное собирать                 |
|and the like compile                 |территория продажи                       |
|sales territory                      |магазин                                  |
|store                                |                                         |
|individual salesperson               |отдельный продавец                       |
|division                             |зд. сектор                               |
|department                           |отдел                                    |
|generally                            |вообще                                   |
|in any way                           |зд. в любой форме                        |
|set goals                            |ставить цели                             |
|control                              |контролировать, управлять                |
|evaluate                             |оценивать                                |
|potential investor                   |потенциальный инвестор                   |
|soundness                            |надежность                               |
|confirm                              |подтвердить                              |
|tax                                  |налог                                    |
|liability                            |зд. пассив; задолженность                |
|payroll                              |платежная ведомость (по зарплате)        |
|deduction                            |удержание, вычеты                        |
|approve                              |зд. утверждать, одобрять                 |
|issue                                |выпуск                                   |
|stock                                |амер. акции, англ. ценные бумаги         |
|bond                                 |облигация                                |
|be able                              |быть способным                           |
|provide                              |предоставлять                            |
|in the required form                 |в требуемом виде                         |

    2. The Basis for the Accounting Process
|basis                                |основа                                   |
|accounting equation                  |бухгалтерская сбалансированность         |
|                                     |(дебет и кредит)                         |
|relationship                         |соотношение                              |
|assets                               |активы, авуары, зд. актив баланса        |
|own                                  |владеть                                  |
|item of value                        |материальные ценности                    |
|owner                                |владелец, собственник                    |
|debt                                 |долг                                     |
|obligation                           |обязанность, обязательство               |
|owner's equity                       |собственный (уставной) акционерный       |
|                                     |капитал                                  |
|pay off                              |расплачиваться (с)                       |
|term                                 |зд. понятие, значение                    |
|sole                                 |единоличный                              |
|proprietorship                       |право собственности                      |
|partnership                          |партнерство, товарищество                |
|share                                |доля                                     |
|report                               |сообщать                                 |
|is referred (to)                     |зд. называться                           |
|stockholder's equity                 |доля акционера                           |
|retained earning                     |нераспределенная прибыль                 |
|accumulate                           |накапливаться                            |
|to date                              |зд. к определенному времени              |
|move                                 |зд. переставлять                         |
|above                                |вышеуказанный                            |
|algebraically                        |алгебраически                            |
|obtain                               |получать                                 |

    3. A Balance Sheet

|statement                            |зд. отчет                                |
|summary                              |сводка, краткое изложение                |
|particular                           |конкретный                               |
|various                              |различный                                |
|enter                                |входить                                  |
|demonstrate                          |показывать                               |
|indeed                               |действительно                            |
|balance                              |уравновешиваться                         |
|that is                              |то есть                                  |
|prepare                              |готовить                                 |
|at least                             |по крайней мере                          |
|once                                 |один раз 1                               |
|semiannually                         |раз в полгода                            |
|quarterly                            |ежеквартально                            |

    4. An Income Statement
|income statement                     |отчет, счет прибылей (и убытков)         |
|summary                              |сводка                                   |
|cover                                |охватывать, учитывать                    |
|previous                             |предыдущий                               |
|annual report                        |годовой отчет                            |

    5. The Importance of the above two Statements
|importance                           |важность                                 |
|compare                              |сравнивать                               |
|competitor                           |конкурент                                |
|a number (of)                        |ряд                                      |
|ratio                                |соотношение, коэффициент                 |
|provide                              |зд. давать                               |
|profitability                        |доходность                               |
|account receivable                   |сумма, причитающаяся к получению,        |
|                                     |дебиторская задолженность                |
|long-term                            |долгосрочный                             |
|debt financing                       |долговое финансирование                  |
|                                     |(т.е. путем получения займов)            |
|like                                 |как                                      |
|those                                |зд. заменяет слово «отчеты»              |
|accounting period                    |отчетный период                          |
|average                              |средняя величина                         |
|as a whole                           |в целом                                  |



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