Apr 14, 2016

Finance English practice: Unit 4 — Bookkeeping
23 cards
, 80 answers
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  • Complete the sentences below. Use the key words if necessary.
    • Double-entry bookkeeping

      key words
      Bookkeepers      ○      transactions      ○      account      ○      Double-entry bookkeeping      ○      debit      ○      credit      ○      raw materials      ○      stock      ○      debtors


      A.J. works in the accounting department of a trading company:

      ‘I began my career as a bookkeeper. record the company's daily : sales, purchases, debts, expenses, and so on. Each type of transaction is recorded in a separate — the cash account, the liabilities account and so on. is a system that records two aspects of every transaction. Every transaction is both a — a deduction — in one account and a corresponding — an addition — in another. For example, if a company buys some — the substances and components used to make products — that it will pay for a month later, it debits its purchases account and credits the supplier's account. If the company sells an item on credit, it credits the sales account, and debits the customer's account. As this means the level of the company's — goods ready for sale — is reduced, it debits the stock account. There is a corresponding increase in its — customers who owe money for goods or services purchased — and the debtors or accounts payable account is credited. Each account records debits on the left and credits on the right. If the bookkeepers do their work correctly, the total debits always equal the total credits.’

      • Day books and ledgers

        key words
        day books      ○      journals      ○      nominal ledgers      ○      Creditors      ○      bought ledger


        'For accounts with a large number of transactions, like purchases and sales, companies often record the transactions in or , and then put a daily or weekly summary in the main double-entry records.
        In Britain, they call the main books of account . — suppliers to whom the company owes money for purchases made on credit - are recorded in a . They still use these names, even though these days all the information is on a computer.'

        • Balancing the books

          key words
          accounting period      ○      trial balance


          'At the end of an , for example a year, bookkeepers prepare a which transfers the debit and credit balances of different account onto one page. As always, the total debits should equal the total credits. The accountants can then use these balances to prepare the organization's financial statements.'

        • British English or American English?
          • debtors
            • American English
            • British English

          • accounts receivable
            • American English
            • British English

          • creditors
            • British English
            • American English

          • accounts payable
            • British English
            • American English

          • stock
            • American English
            • British English

          • inventory
            • American English
            • British English

        • Match the definitions with the words below
          • an amount entered on the left-hand side of an account, recording money paid out —  . . . 
            debit
            • stock
            • creditors
            • credit
            • ledger
            • debtors
            • debit

          • a book of accounts —  . . . 
            ledger
            • debit
            • debtors
            • ledger
            • creditors
            • stock
            • credit

          • customers who owe money for goods or services not yet paid for —  . . . 
            debtors
            • ledger
            • debtors
            • credit
            • debit
            • stock
            • creditors

          • an amount entered on the right-hand side of an account, recording a payment received —  . . . 
            credit
            • ledger
            • credit
            • creditors
            • stock
            • debtors
            • debit

          • goods stored ready for sale —  . . . 
            stock
            • stock
            • ledger
            • creditors
            • credit
            • debit
            • debtors

          • suppliers who are owed money for purchases not yet paid for —  . . . 
            creditors
            • credit
            • debtors
            • stock
            • debit
            • creditors
            • ledger

        • Complete the sentences. Use the words from the box if necessary.
          • box
            Double-entry bookkeeping      ○      account      ○      debit      ○      day books      ○      journals      ○      nominal ledgers      ○      bought ledger      ○      trial balance


            shows where money comes from and where it goes: it is always transferred from one to another one. Every event in entered twice - once as a credit and once as a .

            • Most businesses record very frequent or numerous transactions in or .

              • The main account books are called , and the book relating to creditors is called the .

                • In order to prepare financial statements, companies do a which copies all the debit and credit balances of different accounts onto a single page.

                • Complete the sentences using 'debit' or 'credit'
                  • If you buy new assets, you  . . . 
                    debit
                    the cash or capital account.
                    • credit
                    • debit

                  • If you pay some bills, you  . . . 
                    debit
                    the liabilities account.
                    • credit
                    • debit

                  • If you buy materials from a supplier on 60 days' credit, you  . . . 
                    debit
                    the purchases account and  . . . 
                    credit
                    the supplier's account.
                    • debit | credit
                    • credit | debit

                  • If you sell something to a customer who will pay 30 days later, you  . . . 
                    credit
                    the sales account and  . . . 
                    debit
                    the customer's account.
                    • debit | credit
                    • credit | debit

                tags: Business & Finance English • Professional English in Use Finance • Ian MacKenzie
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