财务英语复习宝典.doc

Chaper oneUnit oneSTUDY OBJECTIVE 2What is accounting? Simply put, accounting is a widely used means by which we describe and measure the results of economic activities. Accounting is an information system of recording, interpreting, measuring, and analyzing economic activities. Accounting can be divided into financial accounting, management accounting, and tax accounting.STUDY OBJECTIVE 2What is accounting? Nature of accounting: modern accounting has been aiming at mainly providing financial information, improving management and promoting economic efficiency since its birth. An accounting entity is an individual enterprise,institution or organization.STUDY OBJECTIVE 2What is accounting? The to-be-dealt-with object of accounting is the economic information produced by each specific capital activity.Accounting is characterized as an economic information system mainly providing financial information. The Role of Accounting Decision makers (information users) use accounting information for different purposes. -individuals (in their daily lives) -businesses (mainly managers in the operation) -investors and creditors -government regulatory agencies -taxing authorities -nonprofit organizations -other users (such as “competitors, clients, suppliers”) STUDY OBJECTIVE 3 What is the role of accounting in business? The simplest answer to this question is that accounting provides information for managers to use in operating the business. In addition, accounting provides information to other stakeholders to use in assessing the economic performance and condition of the business.STUDY OBJECTIVE 3 What is the role of accounting in business? In a general sense, accounting can be defined as an information system that provides reports to stakeholders about the economic activities and condition of a business. You may think of accounting as the “language of business”. This is because accounting is the means by which business information is communicated to the stakeholders. STUDY OBJECTIVE 4Accounting TheoryAccounting from a users perspective Many people think of accounting as simply a highly technical field practiced only by professional accountants. In reality, nearly everyone uses accounting information daily. Accounting information is the means by which we measure and communicate economic events.Financial accounting and Managerial accounting Financial accounting mainly reports information on the financial position and operating results of a business for both the external users and the business as well. Managerial accounting provides special information for the managers of a company ranging from long-range plan to detailed explanations of a specific operating results.Unit two cashv （by its definition in the accounting）the cash not only includes paper money and coins the business holds, but also bank deposits and highly liquid instruments like checks and money orders.Unit one cashv However, in business and accounting, cash consists of coins, paper money, bank drafts, checks, money orders, certified checks, cashiers checks, and any balance in checking and other types of bank accounts.Unit one cashv Cash is the most liquid asset of a business，and most business transactions begin or end with cash.v What elements does a ledger account include?v The name of the account, account number, date, explanation, debit, credit and balance.v A ledger account accumulates in one place all the information about changes in a specific asset, liability, or owner equity.v The unit of organization for the ledger is the account.Accounting cyclev The accounting cycle is the sequence of accounting procedures used to record, classify, and summarize accounting information in financial reports at regular intervals and the procedures must be repeated in the same order during each accounting period. Accounting cycleThe accounting cycle generally consists of five special steps:v 1.Analyzing business transaction and making accounting entries according to original documents.v 2.Journalizing all transaction occurred, posting each journal entries to the appropriate ledger accounts and preparing an unadjusted trial balance.v 3.Making end-of-period adjusting entries, journalizing and posting them in the ledger accounts and preparing an adjusted trial balance. v 4.Making closing entries, journalizing and posting closing entries, and preparing an after-closing trial balance.v 5.Preparing financial statements.Unit threeINTERNAL CONTROL OVER CASH Internal control over cash is a means of preventing fraud and theft. The business should have a good system of internal control over cash . What specific things should the system include ?1. Cash handing should be separated from cash recording. Employees who handle cash should not have access to the accounting records, and accounting personnel should not have access to cash.2. Each department of the business should have a practical and feasible cash budget so that the business will not run short of cash or have too much excessive cash.3. All cash receipts should be deposited in the bank in order to prevent the cash from being stolen. 4. In addition, all major payments should be made by check.5. The validity of every expenditure should be verified before a check is issued in payment . Identify the principles of internal control.1. Establishment of responsibility2. Segregation of duties3. Documentation procedures4. Physical, mechanical, and electronic controls5. Independent internal verification6. Other controlsu Establishment of responsibility: control is most effective when only one person is responsible for a given task.u Segregation of duties : the work of one employee should provide a reliable basis for evaluating the work of another employee.u Documentation procedures: documents provide evidence that transactions and events have occurred.u Physical, mechanical, and electronic controls: relate primarily to the safeguarding of assets and enhancing accuracy and reliability of the accounting recordsu Independent internal verification: the review, comparison, and reconciliation of information from two sources.u Other controls: bonding of employees who handle cash, rotating employees duties, and requiring employees to take vacations.Voucher systemu The voucher system (凭单系统) is often used to enhance the internal control over cash disbursements.u It is an extensive network of approvals by authorized individuals acting independently to ensure that all disbursements by check are proper.u A voucher is an authorization form prepared for each expenditure.Trade discount and cash discount are two forms of sale discounts.A trade/commercial discount refers to a certain sum of money which is allowed to be deducted from commodity prices on the list. Generally it may be expressed by percentage, such as 5%,10%,and 20%,etc. A cash discount refers to a deduction from the gross invoice price that can be taken only if the invoice is paid within a specified period of time. Assets=Liabilities +owners equity(1) Defined in Chinas Accounting standards for Business Enterprise A liability is debt borne by an enterprise, measurable by money value, which will be paid to a creditor using assets ,or services.(2) Liabilities consists of two major categories that is current liabilities and long-term liabilities.Cash equivalents refer to those highly liquid short term investments like short term commercial instruments, treasury bills, etc. Treasury bill 短期国库券（偿还期在3-6个月)Treasury note 中期国库券（偿还期在1-5年）u Cash equivalents are highly liquid investments that can be converted into a specific amount of cash. They typically have maturities of 3 months or less when purchasedu Examples include money market funds, bank certificates of deposit, and U.S. Treasury bills and notes.Chapter TwoUnit one When stock is issued for a price that is more than its par, the stock has sold at a premium. When stock is issued for a price that is less than its par, the stock has sold at a discount. According to the right and obligation of the stockholders, stocks can be classified into: common stocks and preferred stocks. According to their forms, stocks can be classified into registered stocks and unregistered stocks. In accordance with whether stocks have par value or not, they can be classified into par value stocks and non-par value stocks.Common stock entitles the owner to a share of the corporations profits and a share of the voting power in shareholder elections. Common stocks are the basic type of capital stock issued by the corporation.Common stocks are basic stocks of a stock company with higher risk.Common stocks possess voting rights participation in dividends, and a residual claim to assets in the event of liquidation.Preferred stocks is a capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. The main purpose of issuing preferred stocks is to raise capital widely or attract special investors to enable the company either to raise more capital or to keep control.Preferred stocks have the following characteristics compared with common stocks:1. Dividends are fixed and preferentially distributed;2. Stockholders have the preferential right to share in assets if the company gets bankrupt and liquidated.3. Stockholders have no voting right, they have neither the board of directors or for the operation and management proceedings of critical importance.Unit two Treasury stock is a corporations own capital stock that (1.) has been legally issued; (2.) due to various reasons, it is reacquired by the corporation for future reassurance. It bear the following characteristics: no voting; no right to participate the distribution o dividends. Retained earnings arise from profitable operations of the corporation. Retained earnings is derived from the net income of the business. Retained earning refers to the increase of capital derived from the operation of the company, the reserve after distribution of net profit. Retained earnings is reduced by incurring net losses and by the declaration of dividends. A statement of retained earnings explains certain changes in the amount of the owners equity in the business. Stockholders equity consists of the paid-in capital and retained earnings. Stockholders invest cash or other assets in the corporation. The capital paid in by stockholders is regarded as permanent capital. Stockholders equity is equal to total assets minus total liabilities.公债（Corporate Bonds） 市政公债（Municipal Bonds） 新股票（New Issues of Corporations） 美国政府证券（U.S. Government Securities） 开放型投资公司（Openend Investment Company)外国公司证券（Securities of Foreign Corporations） 未在证券交易所登记，而在店头市场买卖的股票（Unlisted Stocks） 全国证券商公会自动报价系统（National Association of Securities Dealers Automated Quotation System） Journal entry The journal is the accounting record in which transactions are first recorded.The journal is sometimes called the book of original entry. The unit of organization for the journal is the transaction. The journal shows all accounting information about a transaction in one place. To record a transaction in a journal in terms of debit and credit is referred to as making a journal entry or journalizing. A cash discount refers to a deduction from the gross invoice price that can be taken only if the invoice is paid within a specified period of time.It is stated as “2/10,1/20,n/30”, which means that a discount of 2% of the gross invoice price of merchandise may be deducted if payment is made within 10 days following the invoice date;a discount of 1% of the gross invoice price of merchandise may be deducted if payment is made within 20 days following the invoice date; no discount may be taken and the gross amount of the invoice must be paid on or before 30 days following the invoice date.Sales allowances refer to allowances at sale price to the buyer and agreed by the two sides because varieties, standards and qualities of goods are not in accordance with the buyers requirements after delivery.Sales allowances should offset sales revenue of the current period when occur.发生销货折让时,其销货折让金额应当在本期销货收入中扣减。 1. Deposit accounts, together with savings accounts, represent the simplest form of bank account. 2.The customer deposits funds and withdraws them as required. 3.No chequebook is issued on this type of account. 4.Therefore, the formalities of opening an account are simple, often there is no need for a reference, the customers name, address and occupation, together with a specimen signature and an initial deposit being all that are needed. 5.Payments into a deposit account, which can consist of cash, cheques, postal orders and so on, may be made at the branch where the account is maintained or at any other branch of the bank. 6.Funds may be withdrawn to the amount of the credit balance on the account normally only at the branch where it is maintained, although some banks do permit limited withdrawals at other branches. 7.Withdrawals are subject to the required period of notice - often seven days. 8. But in practice, prior notice is not always insisted upon, provided that the amounts required are not too large. 存款账户，和储蓄账户一起，是银行账户的基本形式，客户按规定存、取款。此种类型的账户不能开支票，所以，开户的手续很简单。一般无需证明人，只需客户的姓名、住址、职业，连同签字样本和开户金额即可。 客户可以用现金、支票、邮局汇款单等，在开户行或任何其他营业网点，向其存款账户上存款。客户一般只能从开户行有贷方余额的账户上取款，虽然有的银行确实允许在其他营业网点限额取款。取款需事先通知，一般要提前七天。但在实际操作中，只要提取的金额不大，并不一定非要提前通知。Chapter Three DividendsDividends refer to the cash that the corporation distributes to its stockholders . The dividends in the cash form is called cash dividends .(Dividends are generally paid in cash ,called cash dividends.)Dividends paid in treasury stocks or additionally issued stocks are called stock dividends. Dividends are retained earnings distributed to stockholders in proportion to the shares they hold.Three conditions:1. Sufficient retained earnings2. Sufficient cash3. Formal action by the board of directorsTypes of Dividends1. Cash 现金 dividends2. Property 财产 dividends3. Stock 股票 dividends4. Liquidating 清算 dividends5. 负债股利（Scrip or liability dividends）6. 建设股息（Dividend during construction period）Cash Dividends: Important DatesThere are three important dates:1. the declaration date 宣告日 (dividends are declared and accrued)（股东会通过之日）2. 停止过户日(除息日)：股利基準日之前五日3. the record date 股利基准日 (list of stockholders to whom dividends are to be paid is finalized)4. the payment date 股利发放日(dividends are paid to stockholders of record) . The announcement of Campbell Soup Co.Dear Stockholders: We declared a quarterly cash dividend of $ 0.225 per common share to you. the date of record: July 8 the date of ex-dividend: July 9 the date of payment: July 31 The board of directors of Campbell Soup Co. June 26Stock dividends refers to dividends paid in treasury.Stock or additionally issued stocks to replace cash dividends or be a supplementary of cash dividends.Stock dividends is a distribution of additional shares of stock to a corporations stockholders in proportion to their present holding.Commonly used ratios:1. Rate of return on equity 股东权益报酬率 :Net income Preferred dividendsAverage common equity2. Payout ratio 股利支付率 : = Cash dividends _Net income preferred dividends3. Book Value per share 每股账面价值 :=Common stockholders equityOutstanding shares Historically, a higher dividend yield has been considered to be desirable among investors. A high dividend yield is considered to be evidence that a stock is underpriced, whereas a low dividend yield is considered evidence that the stock is overpriced.Chapter fourfinancial ability 财力 financial affairs 财务 financial capital 金融资本 financial circles (=the financial world) 金融界 the financial condition situation 财政状况 financial crisis 财政危机, 金融恐慌 a financial magnate 金融巨头 financial statement 财务报表; 决算表(指资产负债表、损益计算书等) financial year 英(=美 fiscal year)财政年度, 会计年度 In addition, annual reports usually include the following sections. 1. Financial Highlights 2. Presidents Letter to the Stockholders 3. Management Discussion and Analysis 4. Independent Auditors Report 5. Historical Summary1.The accounting cycle refers to the steps of recording, classifying, and summarizing the accounting information.会计循环指的是对会计信息进行记录、分类和汇总的步骤。 2.The debit balances are listed in the left-hand column, and the credit balances in the right-hand column. 借方余额列在左手栏，贷方余额列在右手栏。 3.Making adjusting entries is very challenging, so it is usually done by the controller or an excellent accountant. 调整分录的编制非常具有挑战性，所以通常由审计主任或优秀的会计师承担。 4.A compound journal entry is an entry that includes debits or credits to more than one account, and it is an easy and time-saving method of closing the accounts. 复合日记帐分录是指一项分录中包含一个以上的借项或一个以上的贷项，结帐时使用既省事又省时。 5.An i