Bank Services

Banks may be defined as firms producing and selling financial services. Their success or failure depends on their ability to identify the financial services which the public demands, produce those services efficiently, and sell them at a competitive price. The service menu of banks does not remain unchanged as new services are constantly developed by banks. Many of them offer a combination of wholesale and retail banking.

The aim of commercial banks is to earn profit and they are reaching it by providing different services to customers for the price which is called interest.

So, a full range of banking services is offered to customers of the bank:

- it is a safe place for your money. You can open savings (deposit) account and earn interest. There are many different term-deposit accounts. Since these

Bank Loans

Loan is money that one party gives to another to use for a definite period of time. Loans are given based on creditworthiness of customers (borrowers).

According to the term of repayment loans can be short-term (must be paid within one year) and long-term (must be paid in a period that is more than one year, usually 2-3 years, even up to 20-25 for mortgages).

There are commercial, personal, auto loans, mortgages and overdrafts. Most loans require collateral by law. A secured loan is a loan backed by something valuable such as property. If a loan is not backed by collateral it is called unsecured loan. Only highly regarded customers of the bank can receive unsecured loan. If a borrower fails to repay the loan, the lender takes possession of the collateral. Banks can receive collateral in the form of property, accounts receivable, inventory, buildings, equipment of the plant, bonds and stocks. If you develop a good relationship with a bank, it will open a line of credit for you. A line of credit means the bank will lend the business a given amount of unsecured short-term funds, provided the bank has the finds available.

To receive a loan you will go to your bank to the lending department and have an interview with a loan manager, discuss terms of repayment and interest rate to pay.

7. Speak on the topics: Bank Services; Bank Loans; Credit Financial System.

Module 4

Financial Statements

LESSON 10

1. Read and translate the text:

The Ledger of Life

by Paul Hellman

Two accountants sit down for lunch in a fancy restaurant One looks at the other and says:

"How're you doing? You don't look so good."

"I've depreciated terribly," says the other. "Can't get my life in balance. Nothing adds up anymore."

"Listen," says the first, "you are just having a bad quarter. But you have got good assets."

"You know, you are right. It's been years since I've thought about selling the house." Suddenly, he brightens, and a malicious smile spreads across Ins face. "Hey, kids are assets, too. Isn't that what we were told? May be I could sell some of mine, especially the ones that keep moving back home."

"Your work-in-progress days are over, so to speak, but your inventory of kids never quite makes it out the door, eh? But seriously, you can't sell your kids."

"I know. But it doesn't seem fair, does it? My little assets have grown into big liabilities Maybe life is just one big liability. How about you? You look cheerful - what's your secret?"

"I live according to generally accepted accounting principles. Life is a flow statement, old pal The revenues flow in, the expenses flow out. Sometimes you profit, sometimes you don't. 1 take them as they come.'

"You go with the flow."

"That's right. Take this restaurant, for example."

"What about it?"

"See those people over there at the corner table. They were the last in, but they are already eating and they will be the first out."

"You are right. That's not fair."

"You silly. You are letting it get to you. But I look at it and say, "That's just LIFO. Also, as another example, take the food today."

"What food? We have been sitting here for over an hour and have not yet been served." All we got was water."

"Exactly, and frankly I'm delighted. You never know when you might be poisoned."

"Oh yeah? Well, it's also true that we are still hungry."

"But it's also true that we are not dead."

"I've got to get out of here. Your philosophy isn't working. I am still depressed."

The two of them get up to leave. The cheerful accountant drops a tip of several dollars on the table.

"Hey", says the gloomy one. "Why are you doing that? All we got was water."

His friend gives him his best smile and says, "One liquid asset deserves another".

"I think you need an internal audit."

Commentary:

fancy restaurant – модний ресторан

I’ve depreciated terribly – я дуже знецінився (так говорить про себе людина, яка звикла використовувати бухгалтерські терміни, описуючи своє життя)

to get smth in balance - збалансувати

work-in-progress days – робота на перспективу

a flow statement – звіт про джерела і використання коштів

old pal - старий

revenues – прибуток (валовий)

expenses – видатки

LIFO Last in, First out FIFO - First in, First out – облікова методика оцінки товарних запасів для нарахування податків

to go with the flow – пливти за течією

2. Say what you have learnt:

1. the gloomy accountant. Why couldn’t he get his life in balance?

2. the gloomy accountant’s assets and his plans to use them;

3. the cheerful accountant’s secret;

4. accounting principles of the cheerful accountant’s life;

5. the cheerful accountant’s philosophy;

6. possible perspectives of his life while following such a philosophy.

3. Answer the questions:

• What things cannot get one’s life in balance?

• Do you consider kids to be their parent’s assets? If yes, why?

• Wonder, please, whether your group-mates consider them little assets or big liabilities for their parents.

• Support or object the following saying ’Life is just one big liability’.

• Explain, please, the cheerful accountant’s statement that he lives according to generally accepted accounting principles.

• Do you know people who go with the flow?

• Does the cheerful accountant’s philosophy work nowadays?

• Are you going to follow accounting principles in your adult life?

4. Study a word count in financial language:

Count n,v – рахунок, підсумок; рахувати, мати значення

e.g. I lost counts of my debts. Don’t count anyone’s money.

Account – рахунок у банку; стаття в обліку; звіт

e.g. I have current account with the bank. Post this entry to the assets account.

• all-inclusive group of accounts – реєстр, що містить усі рахунки;

• chart of accounts – план-схема групування та кодування рахунків;

• on no account – в жодному разі;

• take into account – брати до уваги;

• turn to account – використовувати;

• accountable – з’ясовний;

• call to account – притягати до відповідальності

Accounting – облік, звітність

e.g. Accounting is the language of business. It deals with generally accepted accounting principles and rules.

- accounting principles – принципи бухгалтерського обліку

Accounts=accounting department – бухгалтерія

e.g. I am applying for a position of a bookkeeper at the Accounts.

Accountancy – бухгалтерський облік (наука)

e.g. Accountancy is one of the main subjects at the University.

Bookkeeping – рахівництво

e.g. Bookkeeping is mechanical process of recording, classifying and posting financial entries into the ledger.

Bookkeeper - рахівник

5. Read, translate and retell the texts.