Word study
1. Match the words with their definitions
CREDIT SALE, QUICK RATIO, LIABILITIES, OPERATING EXPENSES, WORKING CAPITAL, RECEIPT. PURCHASES JOURNAL, NET SALES, BAD DEBT, CURRENT RATIO
Gross sales reduced by amounts allowed to customers as credits for goods returned, goods over-invoiced, etc.
A formal acknowledgment that money due has been paid or that goods have been received.
A sale for which payment will be made later, either as a lump sum on a certain date or by regular installments over a period. Goods bought in this way become the property of the buyer as soon as they have been delivered to him.
A book of prime entry, being that section of the day book in which a listing is made daily of all goods bought on credit by business. Each entry is posted as a credit to the supplier's account in the purchases (or bought) ledger, and totals are posted periodically to the debit side of the purchases account in that ledger.
The expenses of running a business, such as salaries and wages, rent, rates, telephones, postages, advertising and distribution, but not including direct cost of factory labour, materials, and other manufacturing costs.
A ratio used as a test of solvency ratio (relation) between current assets and current liabilities.
A test used in deciding solvency, by relating a concern's most liquid assets (usually its bank balance, money due from customers, cash, and quickly saleable investments) to its current liabilities.
The stock of money needed by a business in order to keep trading or to carry on production. It consists of stocks and liquid resources (cash and things that can quickly be turned into cash); and it is equal to the difference between the current assets and the current liabilities.
Debts that are likely never to be paid and must be treated as worthless by being entered as written off in a bad debts account.
The sums of money which a company or organization owes, for example because it has made promises or signed agreements.
2. Supply the sentences with the missing words
The ... of debts must not be delayed.
I may not have drawn it ... enough.
You must ... giving any unnecessary information evaluation.
A realistic ... of the working of Britain's economy was done by the government.
I have a bank ... at the start of every month.
The company announced a huge ... for the first half of the year.
Industrial expansion was a ... investment.
... is all the merchandise you have on hand for sale.
Businesses which make regular use of ... must have good credit ratings.
Credit, statement, inventory, sound, payment, avoid, loss, accurately, evaluation
3. Choose the best alternative to complete the sentence.
It's up to the accountant to ... the various financial statements.
a. interpret b. intercept c. invent d. translate
The bookkeeper keeps a record of every financial ... .
a. action b. transaction c. entry d. transcription
It's essential to ... the invoice number in any correspondence.
a. estimate b. quote c. say d. tell
One ... of the invoice goes to the customer, another copy goes to Sales and we keep the other one here in Accounts.
a. photocopy b. issue c. top copy d. account
We're in ... with our supplier over this invoice so don't pay it until you hear from me.
a. argument b. dispute c. agreement d. distress
We send a ... to customers who haven't settled their accounts.
a. reminder b. remainder c. remembrance d. memory
If these figures could be ... into parts and labour, it would make them easier to understand.
a. set up b. broken down c. rounded up d. laid down
This company has a weekly ... of about $100,000.
a. pay b. payroll c. salary d. wage
Buying that new machinery has seriously ... our reserves.
a. depreciated b. depleted c. depressed d. deprived
By examining the balance ... and other documents we were able to find out that the company was not doing as well as they claimed.
a. slip b. ledger c. account d. sheet
Surely we can set some of these expenses ... tax.
a. against b. for c. on d. from
The rent for the office is already 3 months ...!
a. overtime b. in the red c. in demand d. overdue
Due to the economic climate we have had to ... more bad debts this year than ever before.
a. tell off b. write off c. find out d. note down
Do they have enough working ... to keep trading?
a. capital b. expenses c. accounts d. currency
Such items as buildings and machinery are known as ... assets.
a. current b. hidden c. fixed d. liquid