\,

! II

1,1 I I

u IT II

PURPOSES OF ACCOUNTING AND THE FUNDAMENTALS OF THE DOUBLEENTRY SYSTEM

PART 2. ADJUSTAMENTS ANALYSIS, WORK SHEET, FINANCIAL STATEMENTS, ADJUSTING AND CLOSING ENTRIES, AND POST-CLOSING TRIAL

BALANCE.

TOPIC 1. READING

Accounting performs several important tasks:

1. Recording daily business transactions in a signi flcant manner and in terms of mono ey.

2. Classifying the recorded information. 3. Summarizing the recorded and classified

inlormation. 4. Reporting the summarized information. 5. Interpreting and analyzing the reported in-

formation

Therefore, accounting miiY be definert, in an elementary way, as the systematic pro cess of recording, classifying, ~ummarizlng, interpreting, and analyzing financial informa tion for decision making and for future refe rence, regarding the economic activity of an organization .

The accounting process is based upon tile following five fundamental elements:

ASSETS

LIABILITIES

Everything of value a firm owns. The debts owed by a firm.

OWNER'S EQU~TY

REVENUES

EXPENSES

The economic rights or equities of the own-er or owners in the assets of a business. The products of the business. The cost incurred to produce revenues.

The relationship between the fundamen tal elements is shown by the accounting equation :

Assets = Liabiliti,''l + Owner's Equ ity + Reven ues - Expens8s.

The everyday business transactions are analyzed. Their effc", .. are recorded as increa ses or decreases in the five elements men tioned above.

Because the accounting process is ba sed on the fundam ental elements, which constitute the variables o f the accoun ting equation, til e entry made for each transac-tion is composed of two parts: one or more debits and one or more credits. This duality gave rise to the name of "doub le-entry system."

The increa es and decreases in ttl e ele-ments are related to th e equat ion as follows:

Assets accounts = Liabilities + Owner's equity + Revenue dccounts - Expenses accounts Increases : Decreases

I

I Increases I Decreases Decreases Increases I , I

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The left side of an account Is called DEB-IT and the right side is called CREDIT

Therefore, DEBITS are entries recorded in the DEBIT side and CREDITS are those re-corded in the CREDIT side.

Even though the fundamental elements change con stantly, as a result of the everyday business transactions, \he equality of the ba sic equation always holds.

TOPIC 2. ANALYSIS

A. GRAMMAR STRUCTURES Accounting performs . .. Recording, c lassifying, summarizing, re-porting, interpreting, analyzing . . . (ge-

B. EXPRESSIONS

decision making even though

C_ VOCABULARY

A) WORDS OTHER THAN VERBS above

fl

assets business constantly credit daily debts debit decreases duality each eflect entry equality equity

firm left liabilities owner owner's equity regarding relationship revenues

runds used as infinitives and as nouns) Accounting may be defined ... AccoUnting is based ... A firm owhs ... owed by .. .

, The cost Incurred ... The relationship is shown .. . Transactions are analyzed .. . effects are recorded .. . The entry is composed .. . The increases and decreases are rela-ted ... The left side is called . .. Debits are entries recorded ... The elements change ... The equality of the equation holds . ..

toma de decisiones aun cuando

arriba activo negocio, comercio, asuhto constantemente haber, abono, credito diario, cotidiano deudas debe, cargo dlsminuciones duaiidad cada efecto asiento, partida iguaidad equidad

~tQS. nn'8n 'leT\) firma, empresa izquierdo (a) pasivo propietario capi tal rel ativo a relacion entrada, in greso

I I

rights several side task terms therefore transactions value way

derechos varios lado tarea, labor termi nos por 10 tant o operaciones valor manera, forma

B) REGULAR VERBS

PRESENT PAST AND PAST PARTICIPLE SPANISH MEANING

analyze change classi fy compose incur interpret owe own perform record relate report summarize

analyzed changed classified composed incurred interpreted owed owned performed recorded related reported summarized

C) IRREGULAR VERBS

PRESENT

hold show

TOPIC 3. SUMMARY

PAST

held showed

Accounting performs the following tasks; recording, classifying, summarizing, in-terpreting, and analyzing information in mon-ey terms, for future reference and for deci-sion making , regarcjing th e economic activity of an organization.

The accounting process is based on the fundamental elements they are: assets, liabil -ities, owner's equity revenues, and expense. The rel ation shi p between th em is shown by the accounting equation: .

PAST PARTICIPLE

held shown

analizar cambiar clasificar com poner, formar incurrir interpretar deber po seer ejecutar, realizar regis trar referir, relacionar informar resum ir, compendiar

SPANISH MEANING

soslc:ner, reservar mostrar, exhibir

Asse ts = Liab iliti es + Own er's Equity + Revenues - Expenses.

The eff ec ts of business transactions are recorded as increases or decreases in the five elements.

As the accoun ting process is based on the fundamen tal elements, and they consti -tut e th e variab les of the accoun t ing equa tion, the entry made fo r each transac-ti on is com posed o f two parts: DEBITS and CREDITS.

Increases in the assets and expense ac-count s are recorded by debits, and decreases are recorded by credits .

9

1

I

Increases in liabilities, owner's equity and revenue accounts are recorded~y credits and dec reases are recorded by de~'its.

Debits are entries recorded in the left side. Th is side is called DEBIT.

TOPIC 4. EXERCISES.

A. GRAMMAR

Credits are entries recorded in the right side. This side is called CIiEDIT.

The fundamental elements change con stantly as a result of business transactions, but the equation must always be in balance .

a) Identify the subject and verb of each statement in TOPIC 1, and write them on a sepa~ate piece of paper.

b) Change the following statements as In the example. (See note below.)

Ex .: Som eon e record s e ff ects. _---.:E::.:.f.:..:fe:..:c:..:.t s::....::a:.:..re::'-:.r.:::.e .:::.co~r~d:.:::e:.:::d:...._ ____________ _

Someone shows the relationship .

Someone calls it. ______________________________ _

Something relates the increases and decreases.

Something composes the entry. ________________________ _

Something bases the accounting process.

Someone analyzes the transactions. _____________________ _ _

Note: This voice is used whenever the performer or producer of the action is unknown. Ex.: Tran sactions are analyzed. (Someone does it, but we do not know who.)

c) Fill in the blanks with the proper form of the verb in parentheses.

1. DEBIT ______ the left side of an account. (be)

2. CREDITS ______ entries recorded in the credit side (be)

3. A firm ______ things of value. (own)

4. The equality of the equation always _____ _ (ho ld)

5. The equation __ _ ___ the relation ship of the elements. (show)

6. Accountihg ______ important tasks. (perform)

7. The accountant ______ daily business transac tions. (record)

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B. COMPREHENSION

a) Write the Spanish equivalent of the fOllowing statements.

1. ASSETS means everything of value a firm owns.

2. LIABILITIES are the debts owed by a firm.

3. OWNER'S EQUITY means the economic rights or equities of the owner in the asset of a busi ness.

4. REVENUES are the products of the business.

5. EXPENSES are the costs incurred to produce revenues.

6. The accounting process is based upon the fundamental elements.

7. The fundamental elements constitute the variables of the accounting equation .

8. The effects of business transactions are recorded as increases and decreases in the five ele 'I ments .

11

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1' /1,11 II

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7 .=-o~~~~="-'-'-~~~._ ---~--.....-- -_ .

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9. The entry made of each transaction Is composed of two parts.

10. The fUndamental elements change constantly.

b) Answer the following questions in Spanish. Refer to TOPIC 3. Summary.

1. What tasks does accounting perform?

2. What is the accounting process based on?

3. What are the fundamental elements of accounting?

4. What does the accounting equation show?

-------------------------------------------------------------------- I

5. How are the effects of business transactions recorded?

6. What constitutes the fundamental elements?

7. What is the entry made for each transaction composed of?

12

I, i ~I"

Wbat are DEBITS?

9. What are CREDITS?

10. What are increases in assets accounts increased by?

13

UNIT III

THE FUNDA ENTAL ELEMENTS OF ACCOUNTING

I TOPIC 1. READING '--' ASSETS - As stated in Unit II. this term

refers to all the properties owned by a busi ness. They are commonly classified as current anq noncurrent.

CURRENT ASSETS - These consist of cash and other assets or resources that are reasonably expected to be converted into cash , or to be sold or consumed in the opera-tions of a business, within the accounting cy-cle, usually one year. Current assets include:

cash on hand or in banks marketable securities accounts and notes receivable

inve~tories, which include raw materials, goods in process, and finished goods. short-term prepayments, such as, insurance, interests, taxes, unused royalties, and current paid advertiSing services not yet received

NONCURRENT ASSETS - These are longlived assets not intended for sale, used in the operation of a business. They may be either tangible (Often referred to as FIXED ASSETS or PROPERTY, PLANT, and EQUIP-MENT) or intangible.

TANGIBLE ASSETS: Land Building Machinery and equipment

Small tools Furniture and Fixtures Automotive equipment Leaseholds and improvements

INTANGIBLE ASSETS - These are as-sets that do not have any physical features. Their value resides in the rights or bUSiness advantage that their possesion confers to their owner:

Patents Copyrights Trademarks Franchises Goodwill

LIABILITIES - These are debts or other obligations of a business that must be paid at a definite time in the future. Liabilities will re-quire the disbursements or utilization of the assets of the business. They are divided into two classifications, accorqing to the due date of the obligations: current liabilities and non-current or long term liabilities.

CURRENT LIABILITIES - These include all the obligations to be paid within a year from the date of the statement of finaRcial position (previously known a~ BALANCE SHEET), such as:

Notes payable Accounts payable Taxes payable Accrued liabilities (wages, interest, taxes, rent)

15

NONCURRENT OR LONG TERM LIABILI-TIES - These are debts or other due obliga-tions to be paid after the periods required for the current liabilities. Long-term liabilities are due more than a year from the date the state-ment of financial position is drawn up and include the following:

Mortgages payable Notes payable Contracts payable Bonds payable

OWNER'S EQUITY OR STOCKHOLDER'S EQUITY (in case of a corporation). This repre-sents the owner's economic rights or equities in the assets of a business. The ownership equity in a business is the residual interest in assets after Iiabil lties have been deducted.

REVENUE - It is defined as the product of the business organization, either the product it delivers or the service it renders.

B_ EXPRESSIONS according to the due date they are expected to be converted

C. VOCABULARY

A) WORDS OTHER THAN VERBS accounts payable advantage advertising automotive cash copyrights current assets current liabilities debts disbursements feature fixed assets franchises furniture and fixtures goods goodwill

16

EXPENSE - It is defined as the cost in-curred to produce revenue.

TOPIC 2. ANALYSIS

A_ GRAMMAR STRUCTURES As stated ... This term refers .. . Properties owned by a business. they are classified . .. these consist . . . Assets not Intended for sale, used in . . . THEY may be .. . Assets that do not have .. . Their value resides .. . Their possession confers . .. That must be paid . .. Liabilities will require . .. They are divided . . . These include .. . After the periods required ... It Is defined . . . either. . . or . ..

de acuerdo con la fecha de vencimiento

se espera que sean convertidos

cuentas por pagar ventaja publicidad automotriz dinero en efectivo, caja derechos de autor activo clrculante paslvo clrculante deudas desembolsos rasgo, facci6n caracter activo fiJo franquicias muebles y enseres articulos plusvalia

in-

os

t'

machinery Improvements Insurance inventory land leaseholds long-lived long-term marketable securities noncurrent notes payable ownership prepayments properties raw materials resources royalties sale short term statement. of fir,ancial position stoykholder's equity taxes tools trademarks wages within

B) REGULAR VERBS

PRESENT PAST AND PAST PARTICIPLE

accrue accrued confer conferred consist consisted deduct deducted deliver delivered expect expected incur incurred intend intended receive received refer referred render rendered represent represented reside resided require required use used

maquinaria mejoras seguro inventario terreno arrendamientos de larga vida a largo plaza valores comerciales no circulante documentos por pagar propiedad pagos adelantados propieqades materia prima recursos regalias venta I a corto plazo

estado de situaci6n financiera capital (de una corporaci6n) impuestos herrarT] ientas marcas comerciales salarios dentro de

SPANISH MEANING

acumular, redituar conferir consistir deducir entregar esperar, con tar con incurrir intentar recibir referir rendir, prestar servicios representar residir requerir, demandar usar

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C) IRREGULAR VERBS PRESENT PAST PAST PARTICIPLE SPANISH MEANING

draw up drew up drawn up girar, extender un documento

pay paid paid

TOPIC. 3 SUMMARY

Assets are propierties owned by a busi ness. They are classified as current and non current.

Current assets consist of cash and other assets that are reasonably ex~ected to be converted into cash, within the accounting cycle.

Noncurrent assets are long-lived assets not intended for sale.

They are also Known as fixed assets, or property, plant, and equipment.

Intangible assets are those that do not have any physical features.

Liabilities are debts of a business that must be paid at a definite time in the future .

TOPIC 4. EXERCISES.

A. GRAMMAR

pagar

They are divided into two classifications: current liabilities and noncurrent or longterm liabilities.

CUrrent liabilities ihclude all the obliga tions to be paid within a year from the date of the statement of financial position .

Noncurrent liabilities are those debts or other obligations to be paid after the periods required for the current liabilities.

Owner's equity or stockholder's equity represents the owner's economic rights or equities In the assets of a business.

Revenue is the product of the business organization.

Expense is the cost Incurred to produce revenue.

8) Identify the subject and verb of each statement in TOPIC 1, and write them on a separate piece of paper.

b) Complete the answers to the following questions as in the example. Ex .: What does this term refer to? It refers 10 all the properties .

1. What do assets consist of? ________ cash and other assets.

2. What does the value of intangible assets reside in? ________ the rights and business advantage.

3. What do liabilities include? ________ all the obl igations.

4. What does owner's equity represent? ________ the owner's rights.

5. What will liabilities require? ________ the disbursements of the assets.

,

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s: 11

a-:>f

or js

ty or

ss

ce

ate

6. What do intangible assets confer to the owner? ________ the rights or business advantage.

7. What may noncurrent assets be? ________ tangible or Intangible .

c) Change the following statements as in tile example.

Ex.: Someone does it It is done Someone classifies it. ____________________________ _ Someone divides tl1em. __________________________ _ Someone draws it up. ____________________________ _ Someone includes tl1em __________________________ _ Someone knows them ___________________________ _ Someone refers them to __________________________ _

B_ COMPREHENSION

a) Write the Spanish equivalent of the following statements.

1_ As stated in Unit II, tile term, assets, refers to the properties of a business.

2. Assets are classified as current and noncurrent.

3. Current assets consist of cash and other assets.

4. Noncurrent asse ts are long-lived assets not intended for sale.

5. Noncurrent assets may be tangible and intangible.

6. Intangible assets do not have any physical features .

7. Their value resides in the rights and advantages they confer to the owner.

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. ~. . .

8. Liabilities are debts of a business that must be paid at a definite time In the future.

9. Liabilities are divided into two classifications.

10. Revenue is defined as the product of the business organization.

b) Write in Spanish the definitions of the following terms, refer to TOPIC 3. SUMMARY.

Assets

Current assets

Noncurrent assets

Intangible assets

Liabilities

CUrrent liabilities

Long-term liabilities

Owner's equity

UNIT IV

THE ACCOUNTING Cy'CLE

PART 1. JOURNALIZING, POSTING, AND THE TRIAL BALANCE

TOPIC 1. READING

As mentioned in Unit II, business trans actions affect the fundamental elements as increases and decreases, through the ac counts established for each one of them.

The recording, classifying, and summariz ing of business , transactions fOllow a pro cess during the fiscal period, known as the "accounting cycle."

JOURNALIZING - This is the first step of the cycle and it consists of recording daily business transactions in a chronological or der, after they have been completely analyzed in terms of debits and credits, so as to show the effect of each transaction on the ac counts. This is made in a book known as a JOURNAL. This word comes from the French word jour meaning day.

As the initial record of each transaction is entered in a journal, this book is often called a book of ORIGINAL ENTRY. However, in business practice, a single journal 10 r~" cord all the transactions is seldom used. When numerous transactions of common ' characteristics occur, special journals can be deSigned, according to the nature of the busi' ness and for the accountant's convenl~nce, these are:

GENERAL JOURNAL - To record the opening entry, the adjusting, c losing, and reo versing entries, and unusual and non repetitive transactions.

CASH RECEIPTS JOURNAL - For all transactions involving receipts of cash .

}

CASH PAYM ENTS JOURNAL (OR CHECK REGISTER) - For all transactions in volving payments of cash.

PURCHASES JOURNAL (or VOUCHER REGISTER) - For all purchases of merchan dise, supplies, etc., on credit. (See Fig. IV 4.)

SALES JOURNAL - For sales of rnerchandiqe on credit. (See Fig . IV 5.)

COMBINATION JOURNAL - For record ing all types of transactions. This is prob ably the most efficient type of journal. It is sometimes called a combined cash journal if it has special debit and credit columns for the cash account, because Lr,:s account is fre-quently affected by business transactions. (See Fig . IV-q.)

POSTING - This is the next step in the cycle. After the transactions hi,ive been enter-ed in the journals, the informal ion is trans-ferred to individual accounts in the ledger. Each account contains stored information concerning a particular kind of asset, liability, owner's equity, revenue, or expense . The list of the accounts in an ?ccountinQ system is called CHART OF ACCOUNTS.

The basic form of the ledger account is the same as that of the "T" account, the left side being for debits and the right side for credi ts .

The process of tranferring the informa-tion to the ledger is called POSTING .

All en trie s recorded in the journals must be posted to the ledger, whi ch is called the

23

24

MI" ." .. --------------------------------~~

GENERAL JOURNAL .

Ii

JlCCOUNT TITLE POST. DEBIT CREDIT DJITE JlND EXPLJlNATION REF.

19-Feb. 1 C(/.~II . . . . . 1,500 00

Tools . . . . ... 2,500 00 Aeets. Pay./Jay Hatlcls . .. . 600 00 Karen Shultz, Capital . . . 3,400 00

2 Utilities Expense . . . . . I 45 00 Ca.,h .

. . . . 45 00

3 Equipment . .. . 450 00 Aeets. Pay./Jay HaneL, . . . 450 00

4 Ca.,h . . . . 550 00 Aeels. Ree./Grcgg McAndrew . 550 00

5 Tools . . . . . . . . . 75 00 Cash. . . 75 00

7 Aeels. Ree./Gregg McAndrew. . 700 ~O Sale., . 700 00

. . .

. ,.

8 Cash. . . . . . . . 955 100 Sale., I 955 00 . .

. .

9 Aeeis. Pay./Jay IJaneb . . . 35 100 Equipment.

. . . . . . 3500

11 Karen Slwliz, Capital .. . 400 ~O Ca~h .

. ... .. 400 00

14 A eels. Pay./Jay lTanel" ,

340 ~O . Cash.

. . ... .. . . 340 00

Fig. IV1 General Journal.

CASH RECEIPTS JOURNAL

Cowl, Bnlonrc . . .. . ... . 3 Marcy C .. ry . Caplrnl . .

6~~ . .. ... 8 Acc". Rec./G13 ~"', ............ . 15 Ace!:!. R,c./'\lUlio Shopp.

~ I ~- --r. 1.....,.,.. - -.. . -...,.

..... ,

"- ... N ... nON

$8,400 . . .. Acldlr/ohal'",,,.'me"' .. Ca," ,ol~, for week . . . IIpcelued on account . . Co.h .al l or ",eek . .

RM'~iocd on account . ('.."j, ..... f>r ....It "...,.,.,... --~

C>tI~ ................

... MOUN'

Fill . IV2 Cash Receipts Journal. , t I

To

CASH PAYMENTS JOURNAL

OAT. A CCOUNT 0 ,.,110 DPL .... ATto. CM.e.: ~'T.

..... . ....

19-Au,. 4 ~..,,~ ... . A ug'U' rent . 20/ 511

~ ,401';". Puy./ Vownwwn Mtuic . Ou Clceo ... ,., . .. 202 21l 16 Voided . . .. 203

-

18 O.lJioe EquJprrw:nl NlJlo (uu""g mac"'~ 204 132 IS Clumge } 'Uu.tl . UUlbUuI fund 20S 103 31 Suwna Puyr"-'", , Aug .... ' 28 pllyroll 206- 209 US JI Adt:dtl.'"g .rpeu..e ) jleplenl.h ".tty . 210 SH

M4wdlan.emu E.tptfn.e woh fv .. d ... - 515

31 Morey CaM:Y. Dra,ol,lC . WWwlruwul . 2JJ 302

3 1 C h C...IIt. . . "lo,a' pOY"'~'" . . . . . 101 t !

Fig. IY3 Cash Payments Journal.

Accounts Payable Subsidiary Ledger

Dowlilown Music

I 2,000 Phelps Supply

I 720-.--

1,800 ___

'Tappun Corportltion /

I 400' 152

OATil

~,. II '3 pj'. .. .. 31

~

PURCHAS.jf JOURNAL ,.vole.

... "COUIIT C OITIIO , .. MM' 00. OAT.

"/WIlI,... ~l'JIly .. /lSIJT lUIs 2/ /0. 0/3. DvwrIWWfI Mu.1c 8 ... 10/10 n/EOM TupP"" ~'JKlr(ljjOIl I'S78 10//3 1/10, ,1/30

Vluru~. I.te .. 1 ""A JO/18 2/10, >l/JO J'~I'I4 ' S"MJI!I .... 10/21 2/10, 11/30 lupPUli Corpur

N OJ

SALES JOURNAL

I IN'tOOCC ..,ST. "CCOUNT'I .... UlS TAX SAUS I

.... n 100. AceOUHT D rnD T ..... S .. ... , ... C&I'Y .... l. ~AYA.U C"_DfT I OOIT CiliUM,. :*- ;1 I

I lvL 102 Village Notes . . .. . . . . . . 2/10, n/30

"

1,6Dq IX 1 ,600~1 II iI

~ sale. on credit without sal tax.

General Ledger

,

, ... -

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" ~ I r--;:;;. .. r "' ..

.. 1/ I."!'" ,,, I ,.. ill ..,..,., UIY...,M.

-

P-....

I I ~nT1..a.&_U~~

, Ic..;._ . ....... .. ' 0 , ,.,..

... ~ .

3 jAI&Cirwy .w~ha"; 4 ! ~ Electronia_'nooO.c. lIfo . J I Rico Corp.-Inoote.

GENERAL LEDGER. However, when greater detail is needed for particular accounts includ ed in the general ledger, SUBSIDIARY LED GERS are se t up. The details of these ledgers support the main or CONTROLLING ac counts. Thus, the totals of the subsidiary led gers should agree with the corresponding controlling accounts in the general ledgers. Examples of this situation are: accounts reo ceivable, voucherf? payable, plant and equip

TOPIC 2. ANALYSIS

A. GRAMMAR STRUCTURES

As mentioned ... transactions affect. .. the accounts established .. . The recording, classifying ... follow it consists of. .. , They hav,e been completely analyzed ... This is fnade ... This word comes ... I t is entered ... This is often called ... A single journal is seldom used ... When transactions occur. . . special journals can be designed ... For transactions involving ... For recording ... I t is sometimes called ... This account is frequently affected ... Transactions have been entered .. . The information is transferred .. . Each account contains ... The list of accounts is called .. . The process of transferring .. . All entries must be posted .. . A greater detail is needed .. '. SUBSIDIARY LEDGERS are set up ... The details support ... Tile totals should agree ... Which are supported ... a TRIAL BALANCE is taken ... total must equal. ..

B. EXPRESSIONS

so as to it is the same as that in order to

ment, and capital stOCk controlling accounts, which are supported by subsidiary ledgers.

TRIAL BALANCE - In order to prove the accuracy of the recording and posting pro cess, a TRIAL BALANCE is taken. This is a list of the ledger accounts and their debit and ere dit ba lances. The total of debit balances must equal the total of credit balances. (See Figs. IV1 to IV5.)

a fin de es el mismo que a fin de

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C. VOCABULARY r

A) WORDS OTHER THAN VERBS ( accuracy exactitud, precision adjusting entry aslento de aJuste balance balanza, balance, saldo cash payments journal dlarlo de egresos de caja cash receipts journal diarlo de Ingresos de caja chart of accounts calalogo de cuenlas closing entry asiento de cierre combination journal dlario comblnado combined cash journal diario de caja combinado detail detalle during durante general journal diario general general ledger mayor general ledger mayor main principal merchandise mercancfas nature naturaleza often a menudo opening entry asiento de apertura payment pago posting pase al mayor purchases compras purchases journal dlario de compras receipts recibos, cobranzas reversing entry aslento inverso sales ventas sales journal diario de ventas seldom rara vez single LJnico, sofo step paso, peldano subsidiary ledgers mayores subsidiarios supplies articulos, provisiones trial balance balanza de comprobacion vouchers payable documentos por pagar vouchers register registro de documen tos

B) REGULAR VERBS.

PRESENT PAST AND PAST PARTICIPLE SPANISH MEANING

affect affected afectar agree agreed concordar call called !lamar, denominar concern concerned concernir design designed dlsenar enter entered asentar, dar entrada equal equaled igualar

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follow need occur post prove

followed needed occured posted proved

C) IRREGULAR VERBS PRESENT

can come mean must

TOPIC 3. SUMMARY

PAST

could came meant

Business transactions affect the fynda-mental elements, as increases and decreases through their corresponding accounts.

The accounting process, carried out within the fiscal periods iSi known as the "ac-counting cycle."

Journalizing is the first step of the ac-counting cycle. It consists of recording everY-day business transactions in a chronological order in a book called a "journal," This book is also known as the book of original entry. In business practice the following journals are used:

general journal cash receipts journal cash payments journal (or check regis-ter) purchases journal (or voucher register) sales journal combination journal The combination journal is probably the

TOPIC 4. EXERCISES

A. GRAMMAR

segu ir necesitar acontecer pasar al mayor probar, comprobar

PAST PARTICIPLE SPANISH MEANING

come rneant

poder venir significar deber

most efficient type of journal. It is sometirnes called "combined cash journal."

Posting is the second step in the cycle. It is the act of transferring the information en-tered in the journals to the ledger.

The ledger is a collection of accounts. The basic torm of the ledger account is the same as that of the "r' account. The I ist of accounts is known as CHART OF AC-COUNTS.

In business practice a general ledger is used, to which all entries recorded in the jour-nal must be posted. .

There are also subsidiary ledgers that support the main or controlling accounts in the general ledger. These ledgers are set up to support the following accounts: Accounts Receivable, Vouchers Payable, Plant and Equipment, and Capital Stock.

The trial balance is taken to prove the ac-curacy of the journalizing and posting pro-cess. It is a list of the ledger accounts to-gether with their debit or credit balances, which totals must equal.

a) Identify the subject and verb of each statement in TOPIC 1, and write them on a separate piece of paper.

b) Fill In the blanks with: sometimef'!. seldom! fr~quently, according to the sense of the sentence.

1. f'o. cash account is ______ affected in bUSiness practice.

2. The general Journal is used to record all the transactions.

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3. Subsidiary ledgers are ______ used.

4. Combination journal is ______ called a combined cash journal.

5. A cash payments journal is _____ called check register.

c) Fill in the blanks with can, must, or should .

(can = ability or power) (must, should = obligation or necessity)

1. Business transactions _____ be journalized in a chronological order. 4

2. Special journals ______ be designed In business practice.

3. Debit and credit balances in the ledger _____ agree.

4. Subsidiary ledgers ______ be used when necessary.

5. The accountant ______ deSign an accounting system.

6. Journal entries _____ be posted to the ledger.

7. A trial balance ______ be taken to prove the accuracy of the recording and posting procedure.

a) Change the following sentences from the active to tha passive, as In the examples. Ex.: they have analyzed the transactions .

----------~---

They have prepared the information. The information has been prepared 7 They have posted the journal entries. _____________________ _ They have recorded the transactions. _____________________ _

They have prepared the trial balance. _____________________ _ 8

They have proved the accuracy of the ledger. __________________ _

They have summarized the information. _____________ -;-______ _

9 B. COMPREHENSION.

a) Write the Spanish eqUivalent of the following sentences.

1. Jornalizing consists of recording the dally business transactions after they h ~l.Ve been analyzed . , , 10

30

d.

2. In business practice a single journal is seldom used.

3. When numerous transactions of common characteristics occur, special journals can be de signed .

4. A combination journal is sometimes called combined cash journal.

5. After the transactions have been entered in the journals, the information is transferred to the ledger.

6. The totals of the subsidiary ledgers should agree with their controlling account~ in the gene ral ledger.

7. All entries recorded in the journals must be posted to the ledger.

8. The total of debit balances must equal th~ total of credit balances.

9. The basic form of the ledger account is the same as that of the "T" account.

10. The trial balance is a list of the ledger accounts and their debits and credit balances.

31

'" b) Answer the following questions in SpaniSh. Refer to TOPIC 3. SUMMARY. '

1. What Is the accounting process known as?

2. What is journalizing? t:xplain.

3. How many journals are there? Mention them.

4. What is probably the most efficient type of Journal?

5. What is the second step in the accounting cycle?

6. What Is posting? Explain.

7. What is a ledger?

8. What journal entries must be posted to the ledger?

9. What are subsidiary ledgers set up for?

10. What is a trial balance? Explain.

32

UNITV

THE ACCOUNTING CYCLE

PART 2. ADJUSTEMENTS ANALYSIS, WORK SHEET, FINANCIAL STATEMENTS, ADJUSTING AND CLOSING ENTRIES, AND POSTCLOSING TRIAL !3ALANCE.

TOPIC 1. READING

The trial balance is usually taken when the fiscal period comes to an end. It .shOVIS the balances of the assets, liabilities, owner's equity, revenue, and expense accounts at t~at time .

ADJUSTMENTS ANALYSIS - The next step in the cycle consists of obtaining anq analyzing information from the trial balance, for adjusting certain account balances, as well as determining the entries required to be recorded thereby. The adjustments serve tre purpose of recognizing deferred costs and reo venues which were not recorded in ordinary dail.y routine and which at the beginning of the period were considered to be part of as-sets or liabilities and at the time of closing operations became expenses or revenue. Examples: office supplies used, rent expense, expired insurance, depreciation expense,' tax expense, interest expense, salary expense, and Interest earned.

WORK SHEET - This is a form, which constitutes a valuable tool for accountants, on which the information for the preparation of statements is organized. It contains the following columns: account title, account number, and five two-column sections Intend-eel for trial balance, adjustment~, adjusted trial balance, earnings statement (income state-ment), and statement of financial position (bal-ance sheet). (See Fig. V-1.) to prepare the work sheet the next procedure is followed:

1. The Information contained ill the trial bal-ance is emptied or transferred into the trial balance section.

2. The information gathered for adjustments Is shown in the adjustments section in terms of debits and credits. I

3. The adjusted trial balance s~ction is pre-pared by adding or dedu~ting the amounts In the trial balance and adjustment sec-tions. Items that do not require adjusting are extended to the adjusted trial balance section as they are shown in the trial bal-ance section .

4. After totaling tre adjusted trial balance, the work sheet is completed by classifying an extending each item to either the earn-ings statement section or the statement of financial position section.

FII';IANCIAL STATEMENTS - Once the work sheet has been completed the financial statements are prepared from the information contained in the respective columns of the work sheet.

EARNING STATEMENT or INCOME STATEME/IIT.- The purpose of this state-ment is to report upon the profitability of a business enterprise for a given period of time. It Is taken, of course, from the earnings state-ment section. The illustration of an earnings statement (Fig. V-2) will show you the classifi -cation of the expenses incurred during a fis -cal period.

STATEMENT OF FINANCIAL POSITION. -This is prepared using the information in the

33

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,

, . , ,

, , ,

,.

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..

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..

..

..

..

to to ..

" .. I, ..

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to

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34

.CC.V .. , f"L. ... cef

-.

e",,., rr"Y C II , .. Gllff"l!" ,. .. ,wI 1O,' A.m,,,"" "I'('('il''''''~

"' "rr'{'h""tllJ( '"I''''''Ury III ,"",oirl ,,."',""' III .'it.""II" f',. HaM

"' ... nd 121 B"ilrli"~ .. IJI OJ' ~vl,"","' IJ. S'orclroorn F..qvi"...,." , 133 hxr .... r"Y(lbk .01 Af'iC'O',"" ""'.1""" , til Silk. nun ''''yah'' tI. Fei! ,"C. TlJu. rtf'l' W FICA To.n ray.b/, ... ,C;''''e 1rtC. TOlff!1l " ... y, m F","ol lrnempl. Tu" r(JY.

'" S''''e lrnempl. Tuf" roy, ft' Sctlorid ro,-hk ...

Alfff'~tI~t roy"bw '31 Morey C....-y. CttpHoI . 301 M(lP'CY c.""Y, Oro"""1 ' JO.

,~ Sum,"." . . . J .. So... . . . . . . . '01 Scrk. "dv" ... nJ A'''_~ '0' .~k. DllCo",,' 'OJ "'''''''- . 501 ''''PO'''''''on ''' ... 50. "u..a.n~ "d"mII (I"" .4.1;"",. 50J

"'rcA~ DfK'Otl"' .. .. ,0< AdWf"'u,,., UpntM . 5IJ c..Jt sl.01'f .owI ~ 5U

OdiwryF~ . $/' lovul'O"Cf' &ptruc ,

'" HillCd'~IW'OU' S~ $/' rO!f",ll TI'UftI F.rpm"'! $/, s"lnria~ .. 5" Svppl'", &,-w 51. (hill,l,. E.tpnuoe 51'

I

Ne"~ . . . ... .

Fig. V1 Worksheet.

IIf1lu,' "/li,,w,tl U'", ..... T I

v .... AI.". "'OJv.~.n. AO,IV.n. 'fti ... L L ..... e ntlAt. .... UK. ... "

OW JO .,.

3.'" 7.'" "'. 350

..... 12,000

I.boo 1,7(}()

')00 -

100

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~ 8',111

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CII.O'l' 0 ' C""'" .. - C .... "

"'00 3. 3S

3,1)00 Iff,IIOO ~,400 (I., .. u. ,., ,. 300

'.'" 11,000 ' .. 00 ',700

'.'" ' .boo $.500 , , .... .00 .00 ,.. JOO ... , "0 ". " . ,. ,.

'" '" - -14,000 11.000 1IiI.1J1 'liI,lJI

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,

respective section of the work sheet. Assets are classified as current , noncurrent, and in' tangible. The counter balancing portion of the statement is generally subdivided into current liabilities, noncurrent or longterm liabilities, and owner's equity or stockholqer's equity. (See Fig. V3)

ADJUSTING ENTRIES -r- The next ~tep consists of journalizing and posting the aq justlng entries.

CLOSING ENTRIES - The next step con sists of journalizing and posting the closing entries. This serve:; the purpose of closing out all the earnings statement accounts and reo corqing net earnings in the corresponding ca pltal account. The following explanation corresponds to the four closing entries of a fiscal period in sole proprietorship account ing: 1: It closes out all the cost and expense ac

counts as a debit to Expense and Revenue Summary account.

2. It closes out all the revenue accoun,ts as a credit to E:xpense and Revenue Summary account. .

3. It closes out the net e~Hnings remaining in the Expense and Revenue Summary ac count, as a credit to the Drawing account.

4.lt is the transference of the balance of the Drawing account to tre owner's capital ac-count. (See Fig. V4)

After the clOSing entries are posted, all the cost, expense, and revenue accounts are ruled off and closed. The assets, liabilities, and owner's equity accounts are balanced and ruled, and the new balances must be brought down for the new fiscal period.

POSTCLOSING TRIAL BALANCE - In order to prove the accuracy of the ledger, af ter having posted closing entries and balanc-ed and ruled ail the accounts, the post-closing trial balance is taken.

ILLUSTRATION 2.4 JANE'S, INC.

A.uel.l Current AMeta; Ca.!b .. .. . . . . . . ..... . . . . .. .... . . Supplies on hand .. ...... . .......... .. Unexpired iruurance .. ........ .. ...... .

Property, Plant and Equipment; Equipment. ... .. ........ .. ........ . $40,000

Less: Allowance for depreciation.... 4.000 Fixtures .... .. _. . . . . .. . . . . . . .. .. . . . .. $20,000

Less: Allow&DC

CLOSING ENTRIES EXPENSE ACCOUNTS

Debit Credited balances to close

I I

REVENUE ACCOUNTS Debited to

close Credit balances

EXPENSE ANd J=tEVI:NUE SUMMARY Debited with

expense account '---- balances

Debited for nel earnings for the period

CreOited with revenue account balances

RETAINEb EARNINGS

Source:A Survey of Basic Accounting. Salmonson, Hermanson Edwards. Richard D. Irwin, Inc. Homewoods, iii , 1977, page 42

TOPIC 2. ANALYSIS

A. GRAMMAR STRUCTURES

Debited for dividends (if any)

The trial balance is usually taken ... It comes to .. .

B.

It shows ... It consists of obtaining ... For adjusting ... Entries required to be recorded .. . Th ey se rve . . . Whi ch were not recorded .. .

EXPRESSIONS

as well as intended for o f course

c.. ~0CA8\J~~'f

A) WORDS OTHER THAN VERBS adjustment

36

adjus ted trial balance amounts balance sheet

Beginning balance

Credited with ----' net earnings

Flo. V4 Scheme of clos ing entries

They were considered ... They became ... Which constitutes . . . It Is organized ... They are intended ... It is followed .. . It is emptied .. . It has been completed . . . It will show ... The expenses incurred .. . It closes oul . .. After having posted ...

asi como deslinadas, dedicadas a par supuesto

ajuste balanza de saldos ajustados cantidades balance general

( E E

g j( a o p re re re ru S to

B)

business enterprise counterbalancing deferred costs depreciation drawing account earnings E)arnings ~tatement expense and revenue summary Income statement items office supplies post-closing trial balance procedure profitability proprietorship rent sole statement work sheet

REGULAR VERBS

emprf:!X1 COmf:fC\al compensacion, equilibrio costos dlferidos depreciaci6n cuenta personal ganancias e:;tado d~ (perdidas y) ganancias

, . ,.- . . . " sumarlb de gastos e ingresos , estado de ingresos partidas utiles de oficina balanza post-cierre procedimiento productividad capital renta unico, solo estado hoja de trabajo

PRESENT PAST AND PAST PARTICIPLE SPANISH MEANING add added close out closed out complete completed consider considered determine determined discuss discussed earn earned empty emptied extend extended gather gathered journalize journalized obtain obtained organize organized prepare prepared recognize recognized remain remained report reported rule ruled serve served total totaled

C) IRREGULAR VERBS PRESENT PAST bring bring down get to

brought brought down got to

PAST PARTICIPLE brought brought down got, gotten to

_~I:::"" _________________ 'It""'''i._''''''' .... ; ........ +,i"" .... , ...... ...-.-,.

sumar, adicionar liquidar complet!lr considerar determinar comentar, discutir ganar (dinero) vaciar extender recoger, inferir asentar en el diario obtener organizar preparar reconocer quedar, sobrar informar, relatar rayar servir totalizar

SPANISH MEANING traer bajar, prolongar alcanzar, lIegar

37

-TOPIC 3. SUMMARY

The trial balance is usually taken when the cycle comes to an end. It shows the balanc-es of the ledger accounts at that time.

It is necessary to make an analysis of certain accounts that need to be adjusted, as well as to determine the entries required to be recorded in order to accomplish those adjust ments . The adjustments serve the purpose of recognizing deferred costs and revenues and recording accrued expenses and revenues, which were not recorded in the ordinary daily roUtin e, and which at the beginning of the pe riod were considered as part of assets or liabll ities and at the time of closing operations be came expenses or revenue.

In order to organize the inform~tion for 1e preparation of statements, accduntants

use a form called a work sheet. This is a work-

TOPIC 4. EXERCISES

A_ GRAMMAR

ing tool used to clas'sify accounts , to make adjUstments, to compute the earnings, and to get the necessary informatidri for preparing the earnings statement and the statement of financial position.

The next step is journalizirlg the adjust ing and closing entries and posting them to the ledger. "

After posting is made, all the ledger ac-couhts are balanced and ruled . All the tempo rary expense and revenue accounts are clos-ed and double ruled. The assets and liabil-ities accounts, as well as owher's equity ac counts, show new balances to start the new fiscal period .

Alter having posted Ihe adjusting and closing entries, and balanced and ruled the remaining accouhts, the post-closing trial bal ance Is taken in order to prove the accuracy of the ledger.

a) Identify the subject and verb of each statement and underlihe the complement. Refer to TOPIC 1.

b) Use gerunds after of, for before, after, by as in the EXAMPLE.

Ex.: The trial balance is taken before analyzing adjustment. (analyze)

1. The first step in the cycle consists of ____ _ the dairy business transactions in the (record)

journal.

2. The second step consists of ______ the journal entries to the ledger. (pos t)

3. The post-closing trial balance is taken after _______ closing entries. (post)

4. The adjusted trial balance is taken by ____ _ and _~ ____ the amounts in the (add) (deduct)

trial balance and adjUStments sections. 5. The new balances are brought down after ______ and ______ the accounts. ,

, I (balance) (rule)

6.

7.

8.

B_ t

1.

2.

3. 1

ring t of

Jst-I to

ac-po-os-bil-ac-ew

nd he ,al -ICY

10

1e

The work sheel is elaborated before .~ ____ the statements. (prepare)

7. The earnings statement is accomplished for ______ the earnings of a business. (compute)

8_ The adjustments serve the purpose of ______ deferred costs an revenues. (recognize)

c) Change thfl following sentences from the active to the passive as in the examples.

Ex.: They follow a procedure . A procedure is followed

They followed a procedure . A procedure was followed

They organize the information. ________________________ _

They posted one closing entry . ________________________ _

They empty the trial balance .

They computed net earning .

They recorded the transaction. _______________________ _

B_ COMPREHENSION

a) Write the Spanish equivalent of the following statements.

1. The trial balance is usually taken when the fiscal period comes to an end.

2. The adjustments serve the purpose of recognizing the deferred costs and revenues and re-cording accrued expenses and revenues.

3_ The work sheet is a form which cons titutes a valuable tool tor accountants.

39

. ________ . ___ . _ ________ ....... .6=

..

-. 4. The information contained in the trial balance is emptied or transferred Into the trial balance section.

5. The information gathered for adjustements is shown In the adjustments section, In terms of debits and credits .

6. Items that do not require adjusting are extended to the adjusted trial balance section as they are shown in the trial balance section .

7. Once the work sheet has been completed the financial statements are prepared.

8. After totaling the adjusted trial balance, the work sheet Is completed.

9. After the closing entries are posted, ail the cost, expense, and revenue accounts are ruled off and c losed.

10. The purpose of the earnings statement is to report upon the profitability of a business enterprise for a given period.

40

b) Answer the following questions ill Spanish. Refer to TOPIC 3. SUMMARY.

1. When is the trial balance usually taken?

2. What does the trial balance show?

3. What is it necessary to do with certain accounts?

4. What purpose do adjustments serve?

5. What do accountants use to organize the information for the preparation of statements?

6. What is the work sheet for? Mention the activities involved .

7. What are the financial statements?

8. What is the next step after preparing the financial statements?

9. What accounts are closed out and double rUled?

10. What is the post-closing trial palqnce taken for?

41

I

t r \ I

I t,

1 \

\

IT j

HISTORIC BACKGROUNrJ OF ACCOUNTING

TOPIC 1. READING

I , ( "I ,

Man, since early times, has struggled to satisfy his requirements for makln~ a liv.lng . Litte by little, the se requirements ~ecarne greater, and the interchange of ,goods among individuals was necessary. I, j.

As a result of this, trading ,began to ap-pear. Simultaneously, numerical . records of some kind began to arise, too.l, .1.

Evidences of the above 'statement are the discoveries made by archeologists, such as bricks inscribed in cuneiform characters in Ba-bylon, detailed accounts for farms and states, in Greece and Rome and the l,trib4teroll of Moctezuma:in pre-Columbiaf'\ North Ameri -ca. This roll gave an account/li n a, pictorial way, of beadwork, feather work, 'weapons, and food, which constituted the tribute of other Mexican nations to Moctezuma . .

Nevertheless, these and many similar rec-ords are not accounting records in the mo-dern sense. Accounting, from the modern ac-countants point of view, really began with th e developmen t of the commercial reRublics of Italy. " (' 1'1\ 1\. .

Massari of Genoa, in 1340,'wa,s the' first to keep double entry bool(s, t/lls . ln~o,rJnatio n being contained in Edward Pe,ragollq's book Origin and Evolution of Double' Bookkeeping.

However, the first printed ! text, con-taining accounting and inc luding the double entry system, known to exist is that of Luca Pacioli (1445-1514), Summa ete ' Arithmetica, Geomt;tria, Proportione e Proportionalitate

: ,

Pac ioli was a true representative of the scien-tific culture at the time of the Italian Renais-sance. He taught at monasteries, universities, and royal courts, and he wrote the book in 1494. _ _

Some centuries later, in 1776, the in-dustrial revolution arose beginning in Great Britain . A series of Inventions in a large num-ber of industri es took place. It then became necessary to improve accounting tecniques and systems and establ ish new ones.

At present, changes in political and eco-nomic organizations based upon the interests and needs of society, have given rise to an im-portant increase in technology.

So far as accounting is concerned, a new system of data processing, based on ac counting principles and accomplished by means of electronic computers, has been used in recent years. " Data" is a synonym for "information" and "processing" is a synonym for " handling" .

Nowadays, a great number of institu-tions of various types use this system.

TOPIC 2_ ANALYSIS

A. GRAMMAR STRUCTURES Man has struggled . . . The interchange was .. . Trading began to appear .. . Records began to arise . . . Evidences are . . . Made by Archelogists . .. This roll gave an account. ..

1

....

Which constituted . .. these are not. .. Text containing and inc luding ... He taught. ..

B. EXPRESSIONS

for making a living known to ex is t little by little so far as accounting is concerned. to give rise to

C. VOCABULARY

A) WORDS OTHER THAN VERBS

2

accounts accou nting bead work bricks cent ury courts data processing detailed development doubleentry

J ear ly es tates farms fea th er work food greate r however increase interchange needs ~ nevertheless

princip les records renai ssance require ments roya l statement times trading tributeroll weapons

A series of inventions took place Changes . . . have given . . . based on .. . It has been used .. .

para ganarse la vida que se sabe exist/eron poco a poco por 10 que respec ta a contab/lidad dar origen a

cuentas conta~iI/dad bisuteria ladrillos, losas . s/glo cortes procesamiento de datos detallado desarrollo partida doble prim/t/vo, temprano ' bienes, propledades granjas, haciendas trabajo en plumas alimento, com/da mas grande, mayor no obstante aumento, incremento intercambio necesidades sin embargo principios reg istros renaclmiento 'requisitos, necesidades real aseveraci6n, planteamlento ti empos comercio

. lisla de tributos armas

~a) REGULAR VERBS . ill

PRESENT PAST AND PAST PARTICIPLE SPANISH MEANING

i:\ccQmplish appear base constitute contain establish improve include Inscribe satisfy struggle

C) IRREGULAR VERBS

PRESENT

arise be (am, is, are) become give have keep know make ' take place teach write

TOPIC 3. SUMMARY

accomplished appeared baseq constituted contained established improved included inscribed satisfied struggled

PAST

arose was, were became gave had kept knew made took place taught wrote

I

Man, since early times, has struggled to make a living. The interchange of goods among individuals was necessary.

Trading began to appear, and at the same time, numerical records began to arise.

Old numerical records were discovered by archeologists in different places.

Accounting, in the modern sense, began w th the gevelopment of the commercial re-publics in Italy.

efectuar, cumplir aparecer, mostrarse basar, fundar constituir contener establecer, crear mejorar, perfeccionar incluir grabar satisfacer, saciar luchar, esforzarse

PAST PARTICIPLE SPANISH MEANING

arisen surgir, subir been ser 0 estar become lIegar a ser, volverse given dar had haber 0 tener kept Ilevar libros, guardar known saber, conocer made hacer, elaborar taken place suceder, ocurrir taught ensei'lar written escribir

The first printed book containing account ing and including the double-E:ntry system was written by Luca Pacioli.

After the industrial revolution arose, it was necessary to improve accounting tech-niques and systems and to establish new ones.

Changes in political and economic orga-nizations have given rise to an increase in technology.

Nowadays a great number of institutions use the data processing system, accomplished by means of electronic computers, which will be discussed in UNIT XIV.

3

,. ..... __________ .... _____ ... ~ _____ ._ ""'""f""""" ..,.",...,.". .. I!!t"!I_m!'l~.."..._ ...... _ .... _ . _

TOPIC 4. EXERCISES.

A. GRAMMAR

a) Identify the subject and verb of each statement In TOPIC 1, and write, them on a separate piece of paper.

b) Fill the blanks with is, isn't, are, aren ' t, was, according to the sense of the statement. . .'

1. The interchange ______ necessary in early times. 2. Numerical records of Babylon accounting records in the moderns sense. 3. Accounting records necessary in Institutions. 4. Data processing a system. 5. The doubleentry system new.

cJ Fill in the blanks with the proper tense of the verb in parentheses according to the time expression.

'---' 1. Trading ______ to appear many years ago. (begin)

2. The industrial revolution ______ in 1776. (arise)

3. Man ______ to make a living since early times. (struggle)

4. Pacioli ______ to teach at royal courts in 1490. (use)

5. He ______ his book Summa in 1494. (write)

6. Changes in economic organ izations rise to changes In technology. (give)

7. A series of inventions 'place in the eighteenth century. (take)

B. COMPREHENSION.

1. Man, since early times, has struggled for satisfying this reqUirements for making a livihgq

2. The interchange of goods among individuals was necessary . .

3. As a result of this , trading began to appear.

4

, \

I I

h 4. Evidences ot the above statements are discoveries made by archeologis ts. !

,5. Nevertheless, these and manv similar records are not accounting records in the modern sense.

,.

tJ,. The first printed text, containing accounting and including the double-e ntry system is that of ;., Luca Pacioli.

7. He used to teach at monasteries, univer s ities, and royal courts, and he wrote his book in 1494.

8. A series of inventions in a large number of industries took place.

9. Changes in political and economic organizations have given rise to an important increase in technology.

10. A new system of data processing has been used in recent years .

b) Answer the following questions in Spanish. Reter to TOPIC 3. Summary.

1_ What has man done since early times?

2. What was necessary among individuals?

3. What began to appear?

5

I' -------

4. What began to arise, at the same time?

5. What was discovered by archeologists?

6. When did accounting, in its modern sense begin?

7. What did Luca Pacioli write?

8. What was it necessary to do after the industrial revolution arose?

9. What have changes in political and economic organizations given rise to?

10. What system do a great number of modern institutions use?

, J

6

able above abroad accompany accomplish accomplishment account accounting ac(;ounts payable accounts rece ivable qCCOU n tant accrue accuracy accurate aChieve achievement acquire acronym act actual actually add addition adjusted tri al balance adjustment adjusting entry advance advantage advertising advice aqvocate affect agains t agg regate

"A"

GLOSSA Y

- capaz, apto, be able poder - arriba de, susodicho, precilado - en el extranjero, fuera del pais - acompanar, concomitar - efectuar, cumplir - realizacion, ejecucion - cuenta - contabilidad - cuenlas por pagar - cuentas por cobrar - contador - acumularse, redituarse - exactitud, precision - exacto, preciso - lograr, lIevar a cabo, reali zar - logro, ejecucion, realizac ion - adquirir - acr6nimo - obrar, actuar, acto, disposicion - real, verdadero, existente - real mente, verdaderarnente - sumar, adicionar - sLima - balanza de saldos ajustados - ajuste, adap tacion - asiento de ajuste - avanzar, avance - ventaja - propaganda, publicidad - consejo, aviso, noticia - de fender: abogar por - afectar - contra, en contra - agregado, unido, agregar, juntar

123

agree agreement aim allocation allocative allow alone always among amount analysis analyze ancient appear appl ication apply appraise approach arise, arose, arisen assets assign associate attain attempt automotive availability available avoid awareness

balance balance of payments balance of trade balance sheet bar-code scanner base be, was, were been be able be willing bead work becom e, became, becom e beforehand beginner beginning behal f behave behavior beliefs

124

"8"

- estar de acuerdo, coincidit - acuerdo, convenlo _ asplrar a, pretender, mira, prop6slto - asignaci6n, distribucl6n - distributivo - permltir, conceder - solo - siempre - entre, en medio de - cantidad - analisls - analizar - anti guo, vetusto - parecer, presentarse - aplicaci6n, uso, solicitud - aplicar, dar - valorar, estimar - acceso, acercamiento - surgir, subir - acti vo - asignar - asociar, asociarse - lograr, alcanzar - intentar, probar - automotriz - disponibilidad - disponible, accesible - evitar _ conoclmiento, conciencia de un hecho

- balance, balanza, saldo - balanza de pagos - balanza comercial - balance general - rastreador de caracteres - basar, fundar, apoyar - ser 0 estar - poder - es tar dispuesto - bisuteria - volverse, Ilegar a se r - cie antemano - principian te - principio - favor, on behalf, a favor - comportarse - comportamiento, conducta - c reenc ias, convencimien to

belong benefits bE)sides better between bind, bound, bound blending board of directors brand bricks bring down broader budget build, built, buill building burden business enterprise buy, bought, bought buyer

call can capital goods card-punch card-reader carry out cash cash on hand cash payments journal cash receipts journal cause century certain change charter chart of accounts cheap check register check up choice chore classify clerical clerks close close out closing entry coach

"C'!

- pertenecer - beneficios, servicios - ademas, tam bien - mejor - en medio, entre dos - atar, juntar, unir - mezcla - consejo directivo - marca - ladrillos, losas - bajar, prolongar - mas amplio, mas ancho - presupuesto, presupuestar - construir, edificar - edificio - carga, peso - empresa comercial - comprar - comprador

- Ilamar, nombrar, gritar - poder, lata - bienes de capital - perforadora de tarjetas - lectora de tarjetas - Ilevar a cabo, realizar - dinero en efectivo, caja - dinero a la mano, disponible - diario de egresos de caja - diario de ingresos de caja - causa, causar - siglo, centuria - alguno, cierto - cambio, cambiar - cedula, titulo, estatuir - catalogo de cuentas - barato - registro de cheques - verificar, comprobar - elecci6n - tarea domestica, faena - clasificar - de dependientes, relativo al trabajo de oficinas - empleados de oficina, dependientes - cercano - saldar, liquidar - asiento de cierre - preparar, aleccionar

125

.'

code combined cash journal come, came, come command commodities comparative advantage compete compiler complexity compose computer concern confer consent constantly constitute consume consumption contain content cou nter-balanc i ng continuum convert copartnership copyright counsel course courts cover create credit currency current customs

daily data processi ng deal, dealt, dealt death debit debt decrease deeper deferred costs degree delegate deliver demand and supply

126

"0"

- codlflcar - diario de caJa comblnado - vehir - dar 6rdenes - artlculos de consumo - ventaja comparatlva - competir - recopilador - complejidad - componer -,- computadora - concernir, Importar - conferir - consentlmlento, consentlr - constantemente - Constltuir - consumlr - consumo - cohtener - contenido - contrapeso, equilibrio - continuo - convertir - compania, asociacion - derechos de autor - consejo, determinacion, aconsejar - curso - tribunales, juzgados - cubrir - crear - credito, haber, abonar, acreedor - moneda corriente - circulante - costumbres, usanzas, aduanas

- d iari o, cotidiano - procesamiento de datos - tnltar, traficar - muerte - debe, cargo, cargar, deudor - cleuda - disminuir - mas profundo - gastos diferidos - grado - de legar - entregar - demanda y oferta

design designate desire develop developing countries development device devote differ disability disbursements discounts disk disposal double-entry drawing account draw up duality during

each early earn earnings earnings statements economics economists effort either employ employee employment empty encourage end enterprise entity entrepreneur entry equality equitable equity

establish esteem estates evaluate

"E"

- ae iii c, Qi;lOl cJ - OIsei'lar, inventar - designar - desao, dS80ur - desarrollar - paises en desarrollo - desarrollo - aparato, dispositivo - dedicar - diferir - impotencia, incapacidad - desembolsos - descuentos - disco - disposicion - partida doble - cuenta personal - extender un giro, tirar hacia arriba - dualidad - durante

-- cada, todo - primitivo, temprano - ganar (dinero) - ganancias - es tado de perdidas y ganancias - economia - economistas - esfuerzo - uno u otro - dar empleo, emplear - empleado - empleo - vacio, vaciar - alentar, animar - final, terminar - empresa - entidad - empresario - asiento, entrada - igualdad - equitativo - equidad, diferencia entre el valor de una pro-

piedad y la cantidad que se debe establecer - establecer. - aprecio, estima, estimar - bienes, raices - evaluar

127

__ iIi ________ .---- ,.-

even evolve exceed exchange exchange rate expand expect expenditures expense expense and revenue sumary account explain extent

face fact factory farms feather-work features feed back financial find , found, found firm fit fixed fixed assets float flow of trade focus follow following food foreign for-p rofit fram e framework franchi ses free en terprise freedom fun ction funds furnish furniture and fixtures

gain gap gather

128

" F"

- llano, liso aun _ evolucionar, desarrollarse - exceder - cambio, intercambio - tipo de cambio _ expanderse, extenderse _ esperar, con tar con _ gastos, desembolsos - ga5to, coste _ cuenta sumaria de gastos e ingresos - explicar - extension

- cara, faz - hecho, realidad - fabrica - granjas _ trabajo en plumas _ caracteristicas, rasgos - retroalimentar - tinanciero _ descubrir, encontrar - firma, compaf'lla _ ajustar, encajar, acomodar - fiJo ...:.. activo fijo - flotar - flujo del comercio - enfocar, concentrarse - seguir - siguiente - alimento - extranjero, exterior - lucrativo _ enmarcar, encuadrar _ sistema, forma (de gobierno) - franqulcias - empresa libre -- Ilbertad - funcion, func iona r - fondos -' su rtl r, su pi i r - muebles y enseres

"G" _ ganancia, beneficio - vacio, laguna - reunir, recoger

general journal generate get, got, got (ten) get to give, gave, given goal goods good will grant greater grievance grow, grew, grown growth guide

handle hardware

heading hear, heard, heard help hierarchy high hold, held , held holder hole hope Ilousehold however

image implement import tariff impose improve improvements include income income statement increase increasing returns to scale incur inequality immaturity input

"H"

"I"

I - diario general - generar - obtener, adquirir - lIegar, ir a - dar - meta, fin, objeto - mercancias - plusvalia - conceder, permitir - mas grande, mayor - injusticia, agravio, of ens a - crecer - crecimiento - guia, guiar, dirigir

- manipular, manejar - nombre que se Ie da al equipo fisico de un siste-

ma de procesamiento - encabezado - oir, oir decir - ayuda, ayudar - jerarquia - alto, elevado - coger, tener, sostener - tenedor, poseedor - agujero, orificio - esperanza, esperar - casa, familia - sin embargo

- imagen - utensilio, poner en ejecuci6n - arancel - imponer - mejorar, perfeccionar - mejoras - incluir - ingreso, renta - estado de ingresos - aumentar, incrementar - rendimientos crecientes a escala - incurrir - desigualdad - inmadurez - elemento de entrada

129

inscribe intend interchange interprete intersect inventory investment investor involve Isolate issue item

job journal journalize

keep, kept, kept key components kind know , knew, known

land latter law lead , led , led leadership learn leasehold ledger left less level liable liabilities library likewise limit line organization list loans

130

"J"

UK"

"l"

- inscrib ir, grabar - intentar - intercamblo, intercambiar - inte rpretar - intersecar - inventario - inversion - inverslonista - involucrar - ais lar - expedir, arrojar, emitir - partida, deta lle, renglon

- empleo, tarea - dlario - asentar en el d iario

- guardar"lIevar libros - componentes claves - genero, clase - conocer, saber

- tierra, terreno - posterior, mas reciente - ley - gular, dirigir - dlreccion, jefatura, autoridad - aprender - arrendamlento - mayor - Izquierdo - menos - nivel - responsable, obligado - obllgaciones a pagar, pasivo - biblioteca - asimismo, tambien - limite, limitar - organizaci on de la li nea (de una empresa) - lista - pres tamos

machine machinery main mainframe mainly maintain maintenance major make up manage management managerial manor market marketable securities marketing marketing mix match mature maturity matter may, might mean, meant, meant meaning means of production measure medi tate meet meeting member merchandise message mid-sized misfortune mixed-economy morale most motivate move must

- de larga vida - de largo alcance - perder - perdida - inferior, mas bajo - suerte

- maqulna - maquinaria - principal, de mayor importancia - unidad central de procesamiento - principal mente - sostener, guardar, mantener - mantenimiento - principal, mayor en importancia - componer - manipular, manejar, dirigir - gobierno, dlrecci6n, administracl6n - dlrectivo, admlnistrativo - feudo - mercado - valores comerciales - mercadotecnia, mercado - mixtura de mercadotecnia - Igualar, equiparar - maduro - madurez, vencimiento - materia, asunto ' - poder, tener facultad 0 permlso - slgnlflcar - significado - medlos de producci6n - medlda - medltar - encontrarse con, lIenar requisitos - sesi6n, asamblea - mlembro - mercancia - mensaje - de tamano medlano - Infortunlo, desgracia - economia mlxta - estado de animo, espirltu - 10 mas, los mas - motivar - moyerse - deber, tener que

131

"N"

nature - naturaleza need - necesltar needs - necesidades network - cadena de trabajo, sistema nevertheless - sin embargo next - pr6xlmo, siguiente noncurrent - no circulante, fijo not-for-proflt - no lucratlvo notes payable _ documentos por pagar nowadays - hoy en dla number - numero, cantidad

"0"

obtain - obtener occur - ocurrir, suceder officers - oficiales, funcionarios office supplies - utlles de oficina often - a menudo oldest - el mas viejo once - una vez

opening entry - asiento de apertura operate - operar orderly - ordenado organize - organlzar output _ producto, elemento de salida overcome - vencer, superar owe - deber, adeudar own - propio, poseer owner - propietario owner's equity - capital ownership - propiedad

"P"

pace - paso, marcha package - paquete, empaquetar parties - partidos, partes partners - socios partnership ,_ , sociedad de personas, compai'lia patterns _ modelos . muestras, palrones pay, paid, paid - pagar payments - pagos perform - ejecu\ar, realizar performance - ejecuci6n , realizacibn phase - aspecto, fase piece - pieza, pedazo

132

plac e plus policy post post-closing trial balance posting power prepare prepayments prevail principles printer procedure process produ ce prof it pro fitability prof itable promote promotion prompt property proprietorship prove provide provision publish punch purchase purpose put, put, put

quick quite

range rate rational raw materials read, read, read realize reason receipt receive recent

"a"

UR"

- lugar, colocar - mas - politica - pasar al mayor - balanza post cierre - pase al mayor - poder - preparar, elaborar - pagos hechos por anticipado - prevalecer - principios - impresor - procedimiento - proceso - producir - utilidad, ganancia - productividad - productivo - promover - promocion - pronto, lis to, expedito - propledad - capital - comprobar, demostrar - proveer, proporcionar - medida, disposicion, provision - publicar - perforar - comprar - proposito - poner

- rapldo - completamente

- recorrer, fluctuar - tasa, tarifa - racional - materias primas - leer - darse cuenta - razon - recibo - recibir - reciente

133

recognize record reduce refer reflect regarding regardless regulations relate relationship remain remark renaissance render rent repair report request require requirement research reside resources restrict retailers retained retirement revenue reversing entries review rise, rose, risen risks role royal royalties rule

sake sale sales journal salesman same satisfy say, said, said scarce scarcity s c he

s.ecurities seek, sought. sought seem seldom self-actualization self-control sell, sOld. sold seller sense serve set set up several share shareholder shop shorten short-range short term show side sight since single ski lis slowly small software

sole solve sort spend, spent, spent staff stage state statement statement of financial position step stock-stockholder stockholder's equity storage stripcard strive, strove, striven strong struggle student-oriented submit

- val ores - bus car. esfoaarse par - pcuecer - lara vez - autorrealizaci6n - autocontrol - vender

, - vendedor - percibir - servir - juego, serie - erigir, instituir - varios - . compartir - accionista - tienda, taller - acortar, encoger - de corto alcance - a plaza corto I - mostrar - lado - vista - desde - unico, solo - habilidades, destrezas - lentamente - pequei'lo - nombre que se Ie da a un conjunto de programas,

procedimientos y documentos que se asocian con la operaci6n de un sistema ',procesamiento

- solo, unico ' - resolver - clase, especie, genero - gas tar, pasar el tiempo - personal, proveer de personal - etapa - manifestar, enunciar - aseveraci6n - balance general - paso - abasto, acci6n - accionista - capital en acciones

, - almacenamiento, almacenaje - tarjetas con faja - esforzarse - fuerte - lucha, luchar - orjentado hacia el estudiante - someter, referir

135

_______ .:l1li.

subsidiary ledgers success successful sue summarize supplies support surplus surprising syntactic

tactical take, took, taken take place tape task taste taxes tell, told, told terms therefore think, thought, thought though thoughtful through thus . together toil tools toward trade trademark train t ransac tion transfer trea t trial balance tribute-roll truthful

undertake

"T"

"U"

understand ,'~nderstood, understood unemploymei!t unstable unusual 13R

- mayores subsidiarios - exlto - exitoso - demandar, entablar juicio - resumlr - suministro, provision - sostener, aguantar - excedente, superavit - sorprendente - slntactlco

- tactico - tamar - realizarse, tener lugar - clnta - tarea - gusto - implJestos - declr, relatar, contar - termlnos, condiciones - par 10 tanto - pensar - aun, aunque - precavido, considerado - a traves de - asl, de esta manera - junto - trabajo , faena - herramlentas - hacia - comercio - marca comercial - entrenar, adiestrar - operacion - transrerir - tratar - balanza de comprobacion - lista de tributos - veraz, verdadero

- emprender, intentar - comprender. en enoer - desemp\eo - inestable - no usual

I Up041

- , .11 ' use

- , 1I~"', WiU useless

- inu!ll usually - usual mente

"V"

valuable - valioso value - valor varied - variados vehicle - vehiculo views - vistas I voice-response - respuesta con voz I voucher register - registro de comprobantes vouchers payable - documentos por pagar

'~ "w"

wages - salarios want - desear, querer, deseo, demanda want-satisfying - que salisface demandas, deseos warehousing - almacenaje waste - desperdicio way - manera, modo weapons - armas welfare - bienestar whatever - cualquiera whereas - en vista de que wholesaler - comerciante al por mayor j willing - dispuesto within - dentro de work - trabajo, trabajar work sheet - hoja de trabajo worthlessness - falta de merito 0 de valor write. wrote, written - escribir

137