To pass this unit, please study the 15 vocabulary words below.
- balance sheet
- CPA (certified public accountant)
- CFO (chief financial officer)
- credits
- debit
- deferral
- double taxation
- due diligence
- foreign currency
- in excess of
- LLC (limited liability company)
- reconcile
- record
- sole-trader
- trial balance
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a document which summarizes the assets, liabilities and equity of a business entity at a given time
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"The analysis of balance sheets for the last three months showed an increase in the value of the company."
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the American and Australian equivalent of a chartered accountant
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"After James passed his exams, he became a certified public accountant."
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the most senior financial manager, responsible for overseeing the financial activities of the entire company
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"The board of directors were satisfied with the CFO's explanation of the unexpected loss reported in the accounts."
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an entry showing the amount of money paid (or owed) to the company, entered on the right hand side
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"The sales ledger clerk totaled the credits and saw that the company was owed over $1 million."
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an entry showing an amount owed (due to be paid by the company), entered on the left hand side
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"Before we can pay the invoice, we need to record the invoice as a debit in the accounting system."
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the state of postponing the recognition of an asset or liability until a future time
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"As his accountant hadn't finished the tax calculations, he applied for a deferral."
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the state where income tax is paid twice (often to two different governments) on one income
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"A lot of countries now have double taxation agreements, so people should only pay the tax in the country where the money was earned."
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reasonable actions taken by a person to satisfy a law or regulation
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"The accountant suggested not signing the final contract until all due diligence was done to check that the company would be profitable."
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the money used in another country
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"Because the company had offices in Spain, Brazil and America, they had to deal with several foreign currencies including the Euro."
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more than, greater than
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"The most recent set of accounts reported a net profit in excess of $5 million."
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a business entity where the debts of the company are separate from the debts of the share-holder
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"As it was a Limited liability company, the creditors couldn't get at John's private assets when the company went bankrupt."
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to ensure that two figures agree with each other
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"A lot of accounting departments reconcile the bank account to the accounts every day."
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a written account of a transaction
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"The auditors went through every record of sale over the last decade before they were satisfied."
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a business which is owned and run by one person
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"Sole-traders don’t have to meet such strict accounting requirements as larger corporations."
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a statement of all debits and credits in the double-entry account book, with any discrepancies shown
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"The company accountant spent two days trying to get the trial balance to agree."