The Balance Sheet (Arnas feriyana putra 30107266)
Assets represent everything of value that is owned by a business, such as property, equipment, and accounts receivable. On the other hand, liabilities are the debts that a company owes-for example, to suppliers and banks. If liabilities are subtracted from assets (assets-liabilities) the amount remaining is the owners share of a business. This is known as owners’ or stockholders equity.
One key to understanding the accounting transactions of a business is to understand the relationship of its assets, liabilities, and owners’ equity. This is often represented by the fundamental accounting equation: assets equal liabilities plus owners’ equity.
ASSETS = LIABILITIES + OWNERS’ EQUITY
These three factors are expressed in monetary terms and therefore are limited to items that can be given a monetary value. The accounting equation always remains in balance; in other words, one side must equal the other.
The balance sheet expands the accounting equation by providing more informa- tion about the assets, liabilities, and owners’ equity of a company at a specific time (for example, on December 31, 1993). It is made up of two parts. The first part lists the company assets, andmthe second part details liabilities and owners’ equity. Assets are divided into current and fixed assets. Cash, accounts receivable and inventories are all current assets. Property, buildings, and equipment make up the fixed assets of a company. The liabilities section of the balance sheet is often divided into current liabilities
(such as bonds and long-term notes).
The balance sheet provides a financial picture of a company on a particular date, and for this reason it is useful in two important areas. Internally, the balance sheet provides managers with financial information for company decisionmaking. Externally, it gives potential investors data for evaluating the company’s financial position.
Comprehension
A.Answer the following questions about the balance sheet. Questions with asterisks (*) cannot be answered directly from the text.
1.What is the final product of the accounting process?
2.What is a balance sheet?
3.Does the balance sheet provide financial information for a long period of time (for example, January to June 1993) or does it provide information for a specific point in time (for example, on June 30, 1993)?
4.What is the difference between assets and liabilities?
5.How is owners’ or stockholders’ equity determined?
6.How can the relationship between assets, liabilities, and owners’ equity be repre- sented?
7.Does the accounting equation always remain in balance? *Why or why not?
8.How can business use a balance sheet? *As a manager, how would you find a balance sheet useful?
Answer:
1.The final product of the accounting process is the balance sheet.
2.A balance sheet is a final statement that provides a summary of what a company owns and what it owes on one particular day.
3.It provides information for a specific point in time, for example, on Jun 30, 1993.
4.Assets represent everything of value that is owned by a business, liabilities are the debts that is a company owes.
5.Owners’ or stockholders’ equity is determined by subtracting liabilities from assets.
6.It can be represented by the fundamental accounting equation assets equal liabilities plus owners’ equity.
7.Yes, it does. Because one side must equal the other. If not, it must be wrong with the recording.
8. A balance is useful for a business, because it provides a financial picture of a compa- ny on a particular day. It provides managers with financilal information for company decision making.
B.Complete the balance sheet by writing in the correct terms from the list bellow.
assets current liabilities long-term liabilities
liabilities fixed assets current assets
stockholders’ equity
Vocabulary Exercises
A. Write down any term that you did understand in the reading. Find each term in the reading, look at its context, and try to figure out the meaning. Discuss these terms with your classmates.
B. Look at the terms in the left-hand column and find the correct synonyms or definition in the right-hand column. Copy the corresponding letters in the blanks.
1. G property (line 6) a. assets equal liabilities plus owners’ equity
2. D equal (line 12) b. provide information item by item
3. F condition (line 2) c. indicate by words or symbols
4. B detail (line 21) d. have the same value as
5. A accounting equation (line 12) e. a series of transactions, changes, or functi-ons that bring about a particular result
6. H monetary (line 15) f. the existing circumstance
7. E process (line 1) g. anything owned by a person
8. C express (line 15) h. of or pertaining to money
C. Discuss the following questions with a partner. In giving your answers, try to use the italicized terms.
1.What is the difference between accounts receivable and accounts payable?
2.Why are accounts receivable and cash considered current assets while property and equipment are considered fixed assets? What do you think the difference between current and fixed assets?
3.The owners’ equity in a company equals assets minus liabilities. What is meant by owners’ (or stockholders’) equity?
4.If you were a manager, how would you use the balance sheet to evaluate you company’s financial condition?
5.What do you consider your personal assets? Do you have any liabilities? What are they?
Answer:
1.Accounts receivable is assets and accounts payable is liabilities.
2.Because they are easly changed into money.
3.Nett owning.
4.The manager know were the company is financial healthy.
5.Mobile.
Text Analysis
Look at the reading to answer these questions.
1.What does each of the following refer to?
LINES WORDS REFERENTS
1 they financial statement
9 this the owners’ share if a business
11 this the relationship of its assets
15 these three factors assets, liabilities and owners’ equity
2.In line 6, what are property, equipment, and accounts receivable examples of?
Assets
3.In line 7, what do suppliers and banks refer to?
To whom the company has depts..
4.In lines 5-7. two different phrases are used to incorporate example in the reading. What are these phrases?
a. Assets
b. Liabilities
5.Another method of clarification by example is the use of mathematical representations. From the reading, copy examples that use mathematical symbols.
a. The fundamental accounting equation.
b. Assets equal to liabilities plus owners’ equity.
6.In lines 28-31, two uses of the balance sheet are given. What are the key words that show each of these uses is in a different area? What uses does each word introduce?
KEYWORDS USES
Classification
Categories of the balance sheet can be classified to show the relationship between them. Fill in the following blanks based on the information provided in the reading and in Figure 1 (page 79).
Class: Assets Class: Liabilities
Members: Current assets Members: Current liabilities
Fixed assets Long-term liabilities
Class: Current assets Class: Current liabilities
Members: Cash Members: Accounts payable
Accounts receivable Income taxes payable
Inventories
Class: Fixed assets Class: Long-term liabilities
Members: Property Members: Bonds
Buildings Long-term notes
Equipment
Application
Using the information in the reading, answer the following questions. Give reasons to support your answers.
1.Which of the following is not a fixed assets: office equipment, machinery, marketable securities, land, and buildings? Why?
Marketable securities. Because its easy to change into money.
2.Are the following liabilities current or long-term: bank loans payable, accounts payable, mortgage bonds payable, taxes payable, and long-term notes payable? List each under the correct heading.
CURRENT LIABILITIES LONG-TERM LIABILITIES
Accounts payable Bank loans payable
Taxes payable Mortgage bonds payable
Notes payable
An Accounting Overview (Arnas Feriyana Putra 30107266)
AN ACCOUNTING OVERVIEW
Accounting is frequently called the “language of business” because of its ability to communicate financial information abaout an organization. Various interested parties, such as managers, potential investors, creditors, and the government, depend on a company’s accounting system to help them make informed financial decisions. An affective accounting system, therefore, must include accurate collecting, recording, classifying, summarizing, interpreting, and reporting of information on the financial status of an irganization.
In order to achieve a standardized system, the accounting process follows accounting principles and rules. Regardless of the type of business or the amount of money involved, common procedures for handling and presenting financial information are used. Incoming money (revenues) and outgoing money (expenditures) are carefully monitored, and transaction are summarized in financial statements, which reflect the major financial activities of an organization.
Two common financial statements are the balance sheet and the income statement. The balance sheet shows the financial position of a company at one point in time, while the income statement shows financial performance of a company over a period of time. Financial statement allow interested parties to compare one organization to another and/or to compare accounting periods within one organization. For example, an investor may compare the most recent income statements of two corporations in order to find out which one would be a better investement.
People who specialize in the field of accounting are known as accountants. In the United States, accountants are usually classified as public, private, or governmental. Public accountants work independently and provide accounting services such as auditing and tax computation to companies and individuals. Public accountants may earn the title of CPA(Certified Public Accountant) by fulfilling rigorous requirements. Private accountants work solely for private companies or corporations that hire them to maintain financial records, and governmental accountants work for governmental agencies or bureaus. Both private and governmental accountants are paid on a salary basis, whereas public accountants receive fees for their services.
Through effective application of commonly accepted accounting systems private, public, and govermmental accountants provide accurate and timely financial information that is necessary for organization decision making.
Comprehension
Answer the following question about accounting. Question with asterisks cannot be answered directly from the text.
why is accounting called the “language of business”?
How is a standardized accounting system achieved?
What are revenues and expenditures?
What do the balance sheet and income statement have in common? How are they different?
*How might the information contained in financial statements be useful to managers? *How might creditors use this information?
How are accountans classified in the United States?
What kinds of services do public accountants provide?
What is a CPA? *Do you have a similar type of position in your country? *Explain.
*Which type of accounting-public, private, or governmental-appeals to you the most? *Why?
*What are some management decisions that might be based on accounting information?
Answer :
1. According is called the “language of business” because of its ability to communicate financial information about on organization.
2. In order to achive a standardized accounting system the accounting process follows accounting principles and rules.
3. Revenues are incoming money and expenditures are outgoing money.
4. The balance sheet and the income statement are two common financial statement. They are different, the first shows the financial position of a company of one point of time, while the second shows the financial performance of a company over a period of time.
5. The information contained in financial statements might be usefull to creditors in help them to find out whether the company will be able to repay the credit on time or not.
6. In United States, accountants are classified as public, private, and governmental.
7. Public accountant provide accounting services such as auditing and tax computation to companies and individuals.
8. A CPA is a Certified Public Accountant. Yes, we had. Formerly faculty of economic graduates of 5 elite universities got ‘Drs….AK’ degree.
9. Personal question
10. In some company financial decision making might be based on accounting information. For example the management want to expands its business to build a bigger factory to introduce new variety of goods.
Circle the letter of the answer that best completes each of the sentences below.
Accounting information is used by ______to help them make financial decisions.
a. managers
b. potential investors
c. creditors
d. all of the above
Regardless of the type of business or the amount of money ivolved :
a. all companies use identical accounting systems
b. balance sheets are more important than income statements
c. common procedures are used in handling financial information
d. no standardized accounting system is employed
3. Business monetary transactions are summarized in :
a. bank books
b. financial statements
c. computers
d. cash registers
4. Public accountants may earn the title of CPA by :
a. becoming governmental accountans
b. paying a fee
c. fulfilling rigorous requirements
d. obtaining a Bachelor of arts degree in accounting
5. Private and governmental accountatnts are paid on a____basis.
a. salary
b. monthly
c. fee
d. weekly
Vacabulary Exercises
A. Subtitute appropriate terms for the italicized words or phrases in the sentences below.
status agencies monitored maintain independently
procedure fee hire rigorous solely
1. Many accounting departments have strict enterance requirements;
only the most qualified applicants are allowed to enter these
programs. rigorous
2. The particular method used to process employee insurance
claims may vary from company to company procedure
3. The stock market is closely watched every day. monitored
4. Rather than expand into foreign lines, the dress shop manager
chose to deal only with domestic fashion designers. solely
5. Although the consultant’s charge for services was high, his
guidance and advice were well worth the money. fee
6. The financial condition of a company is reflected in its financial
statements. status
7. When the business began to expand, a second bookkeeper was
brought in to help keep the books. maintain
8. In the United States there are numerous organizations that
provide services at the local, state, and national levels. agencies
B. Complete the sentences with the noun, verb, and adjective forms provided.
1. Communication/to communicate/communicative
a. Supervisor should strive for two-way communication with their
employees.
b. By using an overhead projector, the guest speaker was able to
communicate his statistical information clearly.
c. Because of the clerk’s highly developed communicative skills, she was
given a position that required her to deal directly with customers
2. Information/informed/informative
a. The owner informed his employees that they would all receive a 5 percent pay increase.
b. Getting Acquainted with Accounting, by John L. Carey, is very informative book.
c. Financial information is essential for organizational decision making.
3. Allowance/allowed/allowable
The supervisor lost control of his staff members after he allowed them to override his decisions.
When the factory was built 50 years ago, little allowance was made for remodeling and expansion.
Althought allowable, smoking was discouraged in the lunch room.
4. Fulfillment/fulfill/fulfilling
At times the assembly line worker felt a lack of profesiomal fulfillment
When he was promoted to production supervisor, however, his job became much more fulfilling.
Before the accountant could became a CPA, she had to fulfill a number of requirements.
5. Standars/has standardized/standard
The standard paper size in United States for business letters and memorands is 8,5 x 11 inches.
The computer department has standardized its procedures for storting and retrieving data.
Nowadays rigorous standards are enforced in the area of food processing and packaging.
C. Fill in the blanks below with the most appropriate terms the list.
parties financial statement reflected standardized allows
whereas interpretations informed communicates rigorous
An income statement is one example of a financial statement, it communicates financial information about a company over a period of time. A standardized format
Is used to present the financial information. This allows interested parties to compare one income statement to another in order to make informed financial decisions. But there is still a great deal of risk involved in financial decision making because the information reflected in an income statement is object to variety of interpretations.
Look at the reading to answer these questions.
What does each of the following refer to?
LINES WORDS REFERENTS
1 its accounting
4 them whereas parties
19 another corporation
21 one organization
Cukupkah jumlah Menteri kita???(arnas feriyana putra 30107266)
MURAL DO NOT BE ERASED (arnas feriyana putra 30107266 3db01)
Unlike graffiti, mural is the act of drawing or writing something on walls and pillars in public places with the use of aerosol spray and paints, and the muralist have permission to do it. Mural was founded firstly in united states in 1970. By someone who drew or wrote something on walls and pillars in public places with the use of aeorosol spray and paints, yet was permitted to do it by the government later called as “muralist”.
Refreshing our mind. It means mural can give us spirit especially when we are in the middle of a traffic jam, but if you see variety of pictures on the road, we can feel a bit better because we can see funny pictures and statement from variety of pictures in mural. A researcher once said that colors are very useful to refresh our mind, like the color of green. If you see the object which is green, you can she feel fresher. Because mural is full with of colors, mural is usefulto refresh our mind.
Helping us to get extra income. Mural can help you to get side job which is useful for increase your income. From some exhibition, we can get profit, we can join some events to show our mural to visitors. If we are lucky, we will be the winner and we can get much money from the exhibition. Besides that, we can get profit from competition. Not only money that we can have from competition., but also network among muralist. So, we can get ideas from other muralist. Take Carlos Almaraz who is a muralist as an example, since he was a child mural has become a part of is live because he loved it very much. One day, he drew mural, he took part in a competition and he became the first winner from the event. His mural was sold for $1000. He was very surprised and he was proud of himself. It is amazing that from drawing on the walls. Carlos almaraz can get an extra income although mural is only his hobby. Then, a muralist can get fee from public service advertisement, there for the government of Yogyakartahas a budget for muralist to make public service advertisement on the walls and pillars. For example, a muralist makes advertisement about prohibitive regulation for smoking in public area, because it is very important to reduce our generation to be a smoker. From that mural, the government hopes that poor people can understand the message of the advertisement even though they are illiterate.
Than, a muralist can get fee from commercial advertisement, like motorcycle advertisement. The muralist must have an idea to make the amazing and useful advertisement for people who read it. The muralist make colorful advertisement so that people can read the advertisement and they are interested in buying a product. Muralist not only delivers a message of buying a product that also create and important message, like using a helmet when riding a motorcycle. From that way, muralist can get money from commercial advertisement.
Helping us to increase our creativity. It means that mural is the right place to express our creativity. With mural, we can get our creativity, buy drawing or painting something that is useful for others. Moreover, mural can develop our sense of art. When you make mural, it can developes you sense of art indirectly because mural is an art. The art is divided into some parts such as; mural and graffiti. They are related each other and they cannot separated. Mural can develop your ability too, especially in drawing something. Mural is not only developing your sense of art but a also developing your ability.
Helping us to sharpen our brain. It means that mural can give us some exercise to sharpen our left brain, because the researcher said that if we draw something, it can help us to sharpen our brain, or if we do something with our left side of the body, it can help us to sharpen our brain, too. Not only our left brain that can sharpen mural from, but also mural can sharpen our right brain because if we draw or right something it means our right brain is working, indirectly.
In summary, mural can give us more advantages than disadvantages. Mural can make walls and pillars good. Besides that, mural makes our town full of colors. It is better than if we create something that is very useless and we just mess up our town. Therefore, mural is not vandalism because it is beautiful hand – writing and beautiful drawing. If we had a talent for drawing or painting, try to develop our strength, who knows our mural can make our life better. Read More......
