Double entry bookkeeping

In any exchange of money, goods, or services, more than one person is involved. Thus there must be two parts to every transaction. In order to make a complete bookkeeping record of a transaction, entries must be made in two different accounts to keep the ins and out balanced.

For example, Daniels can pay her bill on November 6. In addition to recording payment in his cash account, Murphy also records it in another account – an account receivable in which he lists all her charge purchases. Thus his record of this transaction is complete. He has noted that he received a certain sum of money (by the debit to the cash account) and where he obtained the money (by the credit to Daniel’s account receivable). This is called double entry bookkeeping. Double entry does not mean that the same transaction is entered twice but that both the debit and the credit side of the transaction are recorded. All entries in one account must be offset by entries in another account or accounts.

The simplest set of double entry books consists of a journal and a ledger. When a transaction takes place the bookkeeper first enters it in the journal. Transactions are entered as they occur. The bookkeeper regularly transfers the information in the journal to the various accounts, which are kept in the ledger. This is known as posting. Murphy made entries in his journal as the transactions took place. Then he posted those entries in the appropriate accounts in his ledger.

These bookkeeping procedures furnish the information necessary to prepare three types of statements that show the financial condition of an individual or a business. They are the trial balance, the profit and loss statement, and the balance sheet. These statements usually are prepared at the end of a specified period, such as the calendar month, quarter year, or other desired interval. The trial balance is a list of debit and credit balances found in all accounts. The total of the debits must equal the total of the credits. Disagreement between totals shows there is an error (or errors) in the records. The profit and loss statement tells whether the individual or business has made a profit for the period. In its simplest form it looks like this: The balance sheet is a list of all the assets and liabilities on the date of the statement. The amount by which the total assets exceed total liabilities is known as the net worth.

2.2.Для перевірки правильності розуміння тексту, виконайте наступні ситуаційні вправи:

Ситуація 2. Доповніть повідомлення про подвійну бухгалтерію наступними словами:

Disagreement, assets, credit, statement, journal, kept, total, transaction, ledger, found, liabilities, debit, transfers, offset, list, accounts

1. In order to make a complete bookkeeping record of a (угод)__________ , entries must be made in two different ________ to keep the ins and outs balanced.

2. Double entry doesn’t mean that the same transaction is entered twice but that both the (дебетова)_________ and the (кредитова)_________ side of the transaction are recorded.

3. All entries in one account must be (замінені)__________ by entries in another account or accounts.

4. The simplest set of double entry books consists of the (журналу)__________ and the (головної бухгалтерської книги)________________.

5. The bookkeeper regularly (заносить) _________ the information in the journal to the various accounts, which are (зберігаються)_________ in the ledger.

6. The trial balance is a (перелік)________ of debit and credit balances (що знаходяться)________ in all accounts.

7. The (загальний підсумок)__________ of the debits must equal the total of the credits.

8. (Розбіжність)___________ between totals shows there is an error (or errors) in the records.

9. The profit and loss (звіт) _________ tells whether the individual or business has made a profit for the period.

10. The balance sheet is a list of all the (активів)_________ and (пасивів)___________ on the date of the statement.

1. Для ознайомлення з поняттям про систему часів англійських дієслів вивчіть Units 26-27 підручника R. Murphy “English Grammar in Use” Основна література: [3].

2. Щоб навчитись вживати модальне дієслово can, виконайте наступні ситуаційні вправи:

Ситуація 1. Два старих бухгалтери згадують своє життя. Вони вважають, що вміли багато чого робити та справлятися із своїми обов’язками краще, ніж їх теперішні молоді колеги.

1. ‘I was a very talented child’.

‘I know. You………… play the piano well when you were seven. It helped you to be very companiable at work; we all appreciated it’

A couldn’t B could C can

2. ‘I’ve just taken a letter out of the box’.

‘Oh, that’s why I………….. see a happy smile on your face. What was it? A forgotten prize to you that they are about to hand in today? Or what?’

A was able to B can’t C can

3. ‘How was your first auditor’s check?’

‘Easy. All departments………….. pull through.

A were able to B could C can’t

4. ‘What is our former chief doing this summer?’

‘I hope he’ll ………….. go to sea on this yacht with his friends; with his millions he can afford it. I wish I could.’

A could B be able to C can

5. ‘Did you deliver your lectures at Cambridge? You were so ambitious.’

‘No, I ………. find a quieter place to teach. However, I enjoyed speaking to students immensely.’

A can B could C couldn’t

6. ‘Does your son need any help in his accounting?’

‘Yes. You ……….. say a word or two to him and he will get the idea at once; I am sure’.

A could B am able to C can’t

7. ‘Last 10 years on the job I………. work very well with papers but………… stand making up statements on display.

‘Well, I hadn’t learnt it until I resigned, either.

A can B could C couldn’t

8. ‘Is your grandson Tom good at business?’

‘Yes, he ………….. run several firms; he is a kind of genius in money-making.

A can’t B can C could

9. ‘This economic decline is too difficult to our family business’.

‘Oh dear, I ………….. survive it quite easily, either’.

A was able to B can’t C can