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P R I M I C I A S
Es un esfuerzo editorial, sin precedentes, presentamos hoy con orgullo el libro de Texto, preparado y editado por un valioso elemento del CENTRO DE
INVES-
TIGACIONES de la Facultad.
CECILIO ALCOCER, acucioso Profesor, ha querido var la enseñanza extra-muros.
lle-
Su experiencia de mu-
chos años en el salón de clase lo comparte no tan so lo con sus alumnos, ahora la lleva hacia ese que se convierte en un estudiante
lector,
anónimo.
La contribución del Maestro, es valiosa no tan sólo porque aborda el difícil tema de la enseñanza del -idioma
Inglés, especialmente orientado a las Cien-
cias Contables y Administrativas.
Su trabajo es im-
portante, porque está metodológicamente preparado en la más moderna técnica de la enseñanza por
objetivos.
Sabemos sin embargo, que su obra es perfectible.
Pe
ro lo importante es que dá el paso'kás
en
el desarrollo del magisterio.
importante
'Ese cambio
trascenden
tal que convierte al Profesor en autor y que dá una fuerza ilimitada a la enseñanza.
- C 0 N
Con CECILIO ALCOCER, nuestra Facultad, a través de
T E N T S -
su CENTRO DE INVESTIGACIONES, entra en la etapa del desarrollo definitivo, que será alcanzado en plenitud cuando los contenidos de nuestra enseñanza, sea
Page
el producto de la experiencia propios y satisfaga los reclamos de nuestro medio, sin adaptaciones
improvisaciones CHAPTER
precipitadas.
I
BOOKKEEPING
SYSTEMS
The Work of the Accountant Accounting Concepts Branches of the Accounting The Fubdamenta1 Bookkeeping Equati on. Rev i ew 1 .6 1 .7 Solve the Following Problems 1 . 8 Solve the Following transactions 1 .9 Vocabulary I
1. 1 1. 3 1 .4 1. 5
LIC. RAUL S. MONTOYA
RETTA
CHAPTER
II
FINANCIAL 2.1 2.2 2.3 2.4 2.5 2.6
CHAPTER III
STATEMENTS
Income Statement Vocabulary II Balance Sheet Vocabulary III The Balance Sheet Vocabulary IV
CLASS I FY INE TRANSACTIONS 3.1 3.2 3.3 3.4
The "T" Account The Double - Entry System The Chart of Accounts Numbering Accounts in the Ledger
3.5 3.6 3.7 3.8
CHAPTER
IV
The trial Balance The Work Sheet Summary Vocabulary V
RECORDING 4.1 4.2 4.3 4.4
1 . 1 Taylor's Scientific Management Work Methods 1 .2 Fayol's General Principles 1 .3 of Management 1 .4 Vocabulary
V
The Journal Journalizing Debits and Credits Vocabulary VI
REPETITIVE
CHAPTER
II
THE FUNCTIONS OF THE MANAGER 2.1
TRANSACTIONS 2.4
5.1 b.I
The Functional Approach to Management 0 The Relationship Between Organizational Functions and Management Functions Vocabulary II
VI
SUMMARIZING AND REPORTING VIA THE WORKSHEET 64 6. 1 6.2
6.3
107
107
110 126
Advantages of Special Journals Vocabulary VII
ELECTRONIC DATA CHAPTER
92 99
TRANSACTIONS
2.3 CHAPTER
OO CO
Page
Worksheet Procedures Service Business Vocabulary VIII Chart of Accounts
MANAGEMENT
CONCEPTS
for a 64
66 69
VOCABULARY
PROCESSING 133
P R E F A C I O
En virtud de que en México se sigue contando con es casa
literatura para
la profesión de Contador Pííbl i
co y Administrador de Negocios, toda vez que la mayor parte proviene de
los Estados Unidos de Norte-
américa y con el afán de superación nos hemos
fija-
do la meta de contar con un cuaderno de apuntes que-
i
sea adecuado a las necesidades académicas de nuestra Facultad.
Dedicamos con cariño y respeto
la presente obra a
nuestro Director C.P. JOSE CARDENAS CAVAZOS por su gran dinamismo y entrega absoluta a esta
Facultad.
Adaptador:
PROFR. CECILIO ALCOCER
LLANAS
Colaborador:
PROFR. ARTKM10 BALDÉRAS SAENZ
CHAPTER
the first
I
step in the accounting
process.
The information provided by accounting BOOKKEEPING
is used as --
SYSTEMS follows.
BOOKKEEPING gement
RECORDS.
The key to good business mana-
is good bookkeeping
records.
Bookkeeping
re-
Direct users.
O w n e r s , Managers Customers
Employees,
taxing authorities Suppliers, Creditors.
cords can show whether a business operates at a profit or at a loss.
Studies show that
the success or
the failure of a b u s i n e s s may often be traced kind of records that are
to the
indirect users. nancial
Labor u n i o n s , Stock exchanges, fi-
press, trade
associations^«.
kept. The field of accounting
THE WORK Pi- THE A C C O U N T A N T .
One who records all
business affairs of a business is called
an accountant.
a c c u r a t e , understand should•do work.
in an orderly
the
it, and be systematiç ,neat
A person who knows bookkeeping
into separate -
branches.
manner
An accountant must be - -
what he is to do and
has expanded
how he
and rapid
Branches.
- -
in his
can m a n a g e bu-
TeachinB.
Accountants teach accounting
universities
and junior
nnvrnmental
accounting.
courses
in -
colleges.
s i n e s s a f fa ir s. Accountants working i n
deral, state, and local government units are ACCOUNTING The individual, an entire
in governmental
CONCEPTS
industry
or government -
branch has to m a k e d e c i s i o n s on how to allocate resources.
Accounting
aids thesç decisions by
d i n g , c l a s s i f y i n g , s u m m a r i z i n g , and reporting ess transactions.
This d e f i n i t i o n m a k e s
its Recor
Accountants employed by an enter
prise to work on its own affairs are engaged
in Eli-
vate account ing.
busin-
it clear -
of d a t a , or Jookkeeping
engaged
accounting.
Private accounting.
Public that the recording
fe-
their proenga services to the public for a fee, are
accounting,
is only fessional
Accountants who offer
ged
in public accounting.
These are Certified
Public
accounts payable, notes payable, mortgage payable -bonds payable.
Accountants.
i
Capital.
The Branches of accounting.
The amount that would remain if all the --
liabilities were paid is known as Capital. There are six principal accounting
specialization of private --
these are indicated
nt of the Capital
The amou
is obtained by subtracting the to-
belw. tal liabilities from the total assets. interest of the owners
CONTROLLER
in an
Capital.
The
enterprise.
Assets, Liabilities, Capital, These elements are Connected by a fundamental
relationship Called the -
Costs Taxes Budget s Account i ng Andi t i ng Sy s t cms bookkeeping '
2.
2
These same specializations may be performed branches of accounting. performed
tal
equation.
in other
For example, auditing
by public accountants, by private
ts who are called
or accounting
v
internal
is -
accountan
auditors and by governmen
This equation expresses the equality of the assets on one side with the claims of the creditors and owners on the other
side:
auditors. ^
The fundamental bookkeeping *
fAccording to the accounting
This equation is true of all balance sheets. therefore known as the fundamental bookkeeping
equation, a firm
is assu*
It is equa-
"med to possess its assets subject to the rights of -J the creditors and
tion . Assets.
ASSETS = LIABILITIES + CAPITAL
equation
owners.
Properties that are owned and have monetary
value: For Instance, Cash, buildings, office equipm e n t , accounts receivable,
inventory.
If a business owned assets of $ 150,000, owed creditors $ 100,000, and owed the owner $ 50,000.
Liabilities.
Amounts owed to outsiders, such as - -
accounting
equation would
be:
The
a
ASSETS W LIABILITTES + CAPITAL
$ 150,00
$100,000
ASSETS = LIABILITIES + CAPITAL
—
$ 50,000 ^CASH
Any business event which alters the amount of assets, liabilities or capital
is called a transaction.
Exam
pie B, We show how the accountant makes a meaningful
+
$ 5,000
Transaction
2Bought
* $
5
>°00;
supplies for Cash $ 300.
In
record of a series of transactions, reconciling then* step by step with the accounting
this case, Mr. Kelly is substituting one asset for
equation.
another: he is reciving hxample
paying out
B:
( + ) the asset Supplies and -
(-) the asset Cash.
Note that the capi-
tal of $ 5,000 remains unchanged. During
the month of January Mr. John Kelly, Physician,
1. Opened his practice by investing busi ness. 2. Bought supplies cash $ 300,
ASSETS = LIABILITIES + CAPITAL
$ 5,000 in the
(stationery, pencils, etc ) for -
J. KELLY CAPITAL
GASH + SUPPLIES + $ 5,000
3. Bought office equipment form Cindy Furniture Company on account, $ 2,500. 4. Received
$ 2,000 in fees earned during the month.
5. Paid office rent
- 3 00
+„¿00
$ 4,700
300
5,000
for January $ 500.. Transaction 3.- Bought office equipment from Cindy -
We show how these transactions might be analyzed and recorded.
Furniture Company on account $ 2,500. ving the asset Equipment;but with the asset Cash.
Transaction his practice.
1.- Mr. Kelly invested
$ 5,000 to open
There are two accounts that are affec
ted; the asset Cash is increased, and the capital the firm
of
He is r e c e i -
is not paying for it
-
Instead, he will owe the money
to the Cindy Furniture Company.
Therefore he is lia
ble for this amount in the future, thus creating the liability Accounts Payable.
is increased by the same amount. ASSETS = LIABILITIES * CAPITAL
CASH + SUPPLIES + EQUIPMENT CASH + SUPPLIES + EQUIPMENT
ACCOUNTS PAYABLE
$ 300
$ 5,000 $ 2,500
$ 2,500
$ 2,500
$ 7,000
- 500
; 500 rent expense.
$ 2,500
$ 5,000
+
$ 6,200 + $ 300 +
$ 2,500
$ 2,500
$ 6,500
4.- Received $ 2,000 in fees earned du-
ring the month. asset Cash
$ 300
$ 2,500
$ 4,700 + $ 300 + $ 2,500 =
Transaction
J. KELLY CAPITAI,
J. KELLY CAPITAL $ 6,700
$ 4,700
^
ACCOUNTS PAYABLE
Because he received
$ 2,000, the -
increased and also his capital
It is important
REVIEW
increased.
to note that lie labels the $ 2,000
1. The phases of accounting are
fees income to show its origin.
2. The accounting equation is
ASSETS = LIABILITIES + CAPITAL /i CASH + SUPPLIES + EQUIPMENT $ 4,700 +
$ 300
$ 2,500
ACCOUNTS PAYABLE
J. KELLY CAPITAL
$ 2,500
$ 5,000
are hnown as
.
2,000 l;ees incc
2,000 $ 6,700
3. Items owned by a business that have monetary val'ie
+ $ 300 + $ 2,'500
=
$ 2,500
+
$ 7,000
4.-
is the interest of the owner in a busi ness.
Transaction
5.- Paid office rent
for January $ 500.
When the word "paid" is stated, you know it means a
5. Money owed to an outsider
is a
deduction from Cash, since he is paying out his asset Cash.
Payment of expense is a reduction of Capital.
It is termed rent
6. The difference between assets and liabilities
is -
expense. 7. Financial events that occur in a business are ter-
ASSETS = LIABILITIES + CAPITAL med
8 . An investment
in the business
increases SOLUTION
and
1 . - Increase at
4 . - Decrease
2.- Decreaseiisvi«^«
5.-
3. - Decrease
6.- No e f f e c t s «ftc-u
9. To purchase "on account" is to create a 10. When the word
"Paid" occurs, it means a deduction
Increase
of
Answers:
1.- recording, classifying, summarizing, re
porting; 2.- Assets, liabilities, Capital; 3.4.- Capital; 5.- liability; 6.- Capital; 7.-
SOLVE THE FOLLOWING
assets
TRANSACTIONS
transac-
tions; 8.- assets, capital; 9.- liability; 10.- Cash.
1. Paid a Creditor money
owed
2. Paid rent expense for month 3. Cash fees collected SOLVE Till- FOLLOWING
PROBLEMS 4. Bought equipment
What
effect do the transactions below have on the - -
owner's
for the week
on account
5. Bought medical equipment, paying
cash
equity?
1. The owner invested 2. He paid office rent
$ 10,000 in business $ 300.00
3. He withdrew $ 500 from the business
SOLUTION: 1. Decrease in cash and
in account
payable.
2. Reduction of cash an capital.
4. He paid salaries for the week $ 700.00 3. Increase in cash and 5. He received
capital.
$ 2,500 in fees
6. He bought equipment on account $ 3,000
4. Increase in equipment and in account
payable.
5. Increase in quipment, reduction in cash.
21.- BY SUMMARIZING VOCABULARY
- al
resumir
I 22.- BY REPORTING
- al reportar
23.- BUSINESS TRANSACTIONS
- transacciones
comerciales
- A 24.- BOOKKEEPING
- registrar operaciones « teneduría de libros
1.- ACCOUNTING
- Contabilidad 25.- BOTH - por ambas partes
2.- ACCOUNTING CONCEPTS
- principios, labilidad
- de uno y otro
lado
conceptos 26:- BECOME - llegar a ser 27.- BROADENED - ensanchado
- ampliado
3.- AIDS - Ayuda 28.- BUDGETS - presupuestos 4.- AFFAIRS
- asuntos 29.- BUSINESS ENTERPRISE
- Empresa comercial
5.- AS - como 30.- BUILDINGS - edificios 6.- ACCOUNTANT
- contador 31.- BONDS - bonos
7.- AS DOES
- como
lo hace
8.- ACCOUNTING COURSES - Cursos de Contabilidad
32.- BASIC
- básico
f
33.- BILL - cuenta, estado de cuenta, pagare, 9.- AUDITING
letra
- Auditoria 34.- BOUGHT - compró, comprado.
10.- ACCOUNTING EQUATION 11.- ASSETS
- Ecuación Contable
- activos
12.- ACCOUNTS PAYABLE
- cuentas por pagar
- C -
13.- ACCORDING TO - según, conforme a 14.- ALTERS - altera
35.- CUSTOMERS - clientes
15.- AMOUNT - cantidad
36.- CONTROLLERS - Contralores,
16.- AFTER TAKING
37.- CERTIFIED PUBLIC ACCOUNTANT
- después de llevar a cabo
17.- A S FOLLOWS - como
sigue
Directores - Contador Titulado
3 8.- CALLED - llamó 39.- CASH - Caja, efectivo, dinero contante - B -
40.- CALL - llamar 41.- CREDITORS
18.- BRANCH - sucursal, dependencia, rama 19.- BY RECORDING
- al registrar
20.- BY CLASSIFYING
- al clasifica-
42.- CLEAR
- acreedores
- aclarar, poner en claro
Publico
- CH 43.- CHIEF
- Jefe
59.- FURTHER - más aún, promover, además llevar lante
ade-
60.- FIRM - firma
44.- CHANGES - cambios
61.- FEE - honorarios, cuota 62.- FIXED ASSETS - activos fijos 63.- FINANCIAL ANALYSTS - analizadores - D -
45.- DATA
64.- FINANCIAL POSITION
- situación
65.- FOR INSTANCE - por
ejemplo
financieros
financiera
- información 66.- FURNITURE
46.- DIRECTLY
- mobiliario, mueblería
- directamente 67.- FOUND - encontró, encontrado ' 68.- FINANCIAL PRESS - prensa
financiera
- E - G -
47.- ENTIRE - entero, completo, perfecto 48.- EMPLOYEES - empleados 69.49.- EMPLOYED
GOVERNMENTAL
- Gubernamental
- empleó, empleado 70.- GOVERNMENT
- Gobierno
50.- EVEN - aún o todavía 51.- EXPANDED
- ensanchado,
52.- EQUALITY
- igualdad
alargado - H -
53.- EXPRESSES - expresa 54.- EVENT - acontecimiento, suceso, evento
71.- HIGH SCHOOL - Escuela
55.- EARNED - ganó, ganado
72.- HOW - como
56.- EXAMINATION
73.- HAVE PASSED - han pasado, hemos pasado
- examen
Secundaria
57.- EXPENSE - gasto
- I - F -
58.- FINANCIAL
INFORMATION - información fi
74.-
INDIVIDUAL
- particular,
7
INDIRECTLY
- indirectamente
5.-
individual
76.-
INDICATED
- indicado, señalado
77.- INCOME TAX - impuesto sobre la renta
91.- MEANINGFUL
78.- INVESTED
92.- MEANS - significa
79.- INCREASED
- invirtió,
invertido
- aumentó, aumentado
93 - MANAGERS
- significativo
- Gerentes, Administradores
80.- ITEMS - bienes, partidas 81.-
1
INTO - en, dentro
- N 94.- NATURE - Naturaleza l
- J -
9 5.- NET - neto, liquido, limpio 82.- JUNIOR COLLEGE
- Colegio
Universitario
96.- NOTES PAYABLE - documentos por pagar
- K -
/ 83.- KEY - referencia, guía, clave
97.- OWNERS - dueños 98.- OWN - propio 99.- OFFER
- L -
- ofrecer
00.- OUTSIDERS
- Acreedores
01.- ON ACCOUNT - a crédito 84.- LAWYER
- abogado
02.- OWE - deber
85.- LABOR UNIONS - Sindicatos 86.- LIABILITIES 87.- LAW PRACTICE 88.- LABELS
- pasivos - Bufete
- P -
- clasifica, señala 03.- PRIVATE ACCOUNTING
89.- LEFT - dejó, dejado
- M 90.- MONETARY VALUE - valor monetario
- Contaduría
privada
04.- P A R T M E
HELP - empleado de jornada
0 5.- PERFORMED
- ejecutó, ejecutado
incompleta
06.- PAID - pagó, pagado 07.- PROVIDED
- recabada, proporcionó,
proporcionado
18
1 08
PURCHASED
109
12 5.- SPECIALIZATIONS
- especi al izaci ones
PHASES - fases
126.- STOCK EXCHANGES
- bolsa de acciones o valores
110
PROCESS - proceso
12".
111
PROPERTIES
128.- SHOWED - mostró, mostrado
- compro, comprado
- propiedades
SIDE - lado
129.- SUPPLIES
- Artículos,
130.- STATIONERY 131.- STATED
- Q "
suministros
- papelería
- estableció,
establecido
13 2.- SINCE - ya que, puesto que 112.- QUANTITY
- cantidad
133.- STATE - estatal
R 113.
RESOURCES
114.
REGULATORY AUTHORITIES - autoridades
115.
REALLY
- realmente
116.
RATHER
- más bien
117.
RECORD
- registro,
118.
RECEIVED
119.
REMAINS - queda
1 20.
REDUCES - reduce
1 21 .
RELATIONSHIP
- T -
- recursos
134.- TAXING AUTHORITIES - autoridades de regulado
135.- TEACHING
- enseñanza
136.- TRADE ASSOCIATIONS - asociaciones 137.- TERMED registrar
- nombrado,
13 8.- TO ALLOCATE
llamado
- distribuir,
- recibió, recibido
- U -
- relación 139.- USERS
- usuarios
- S - W 1 22.
SIMPLEST
1 23 .
STEP - paso
140.- WORTH - valor
1 24.
SUPPLIERS
141.
- el más
simple
-proveedores
WITHDREW
impuestos
- retiró
aplicar
mercantiles
CHAPTER IfsT«. FINANCIAL
ACCOUNTS
II
Q STATEMENTS
ASSETS
CASH
$ 4,7 00
SUPPLIES
100
EQUIPMENT
2,500
There are two questions that the owner of a busi- -
ACCOUNTS PAYABLE
ness makes to the accountant
JOHN KftLLY, .CAPITAL
periodically:
LIABILITIES AND C A P I I M
(1) What is my profit ?
TOTAL:
'
$ 1,500 5,800 |=Z*$2g
|,Z*3QQ
(2) What is my Capital?
The simple balance of assets against capital, provided by the accounting sufficient
liabilities ami equation,
to give complete answers.
INCOME
STATEMENT
is in
(A) We must -
The
income statement may be defined
know the type and amount of income and the type and
the revenue, expenses, and net
amount of each expense
for a specific
for the period
in question -
(B) It is necessary to obtain the type and amount -
lied a Profit
of each asset, liability, and Capital account at -
Operations.
the end of the period.
ts.
This
information
by the income statement and the balance
is provide sheet.
income of a business
period of time. and
as a s umiliar y ol
This may be also ca
Loss Statement, or Statement
of -
Let us know the meaning of the eleinenJ
Revenue.
The
increase
in capital
resulting
from -
the delivery of goods or .rendering of services by Example :
the business.
In amount, the revenue
is equal
After the transaction for the month of January has
the cash and receivables gained
been recorded
the goods d e 1 i v e r ed or se r v ices re n d. e red .
in the books of Mr. John Kelly, the -
accounts show the following
to -
in compensation
for
balances. Net
Income.
The increase
in Capital
profitable operations of a business; excess of revenues over expenses peri od.
rculting It
form
is -the - -
for the accounting
Expenses.
The decrease
VOCABULARY
in Capital caused by the bu
business's revenue-producing
operations.
II
In amount,
the expense is equal to the value of goods and services used up or consumed
in obtaining
- A -
revenue.
Note that, borrowing cash from a bank does not con-
1 . -ASK
tribute to revenue and
2.- AT THE BEGINNING OF
only if it decreases
a cash payment
is an expense
A.- AT
capital.
- pedir, rogar, preguntar
THE END OF - a fines de
4. - ACCOUNTING PERIOD In many companies there are hundreds and perhaps in one
thousands of income and expense transactions month.
5.- ALREADY
ACCRUED
account would be very cumbersome and would,
tion, make it impossible to show relationship the various
AFFECT
in addi_
- ejercicio o período
- ya, antes de ahora
/ 6 . - AVAILABLE
To lump all these transactions under one -
- a principios de
- disponible, útil, ventajoso
ITEMS - partidas
acumuladas
- afectar
among
items. B 9. 10.
BALANCE
- saldo
BALANCE SHEET - balance general
1 1 . BUSINESS - negocio 12.
BEGINNING
- principio, origen
13.
BORROWING
- pedir
14. - BEYOND
- más
prestado
adelante, más allá
- C 15.- CONTAINS
conti ene
A 6.- CAPTIONS
t ítulos
contabl
17.- CURRENT
- circulante
18.- CURRENT ASSETS
- activos
circulantes
34.-
19.- CONTRIBUTE - contribuir 20.- CURRENT LIABILITIES
- pasivos
- 3 3 . - GAINED
- ganado
GOOD WILL - crédito mercantil
circulantes
21.- CASH RECEIPT - ingreso en caja 22.- CUMBERSOME
- H -
- embarazoso, pesado 35.- HEADING
- encabezado
3(i.- HUNDREDS - cientos - I) -
HTCHFR
- más alto
23.- DEFINED - definió, definido 24.- DELIVERY - entrega - I -
25.- DUE - exacto, debido, oportuno, vencido 26.- DETAILS - detalles
- E 27.- EQUAL -
29.-
IN PREPARING
39.-
INCURRED
40.-
IN ADDITION
41.- INSTEAD 4 2.-
i gua 1
28.- ENTER - entrar,
3 8.-
INDEX
- al
preparar
- causó,
incurrió
- además
- en lugar, en vez de
- relación,
índice
introducir
EARLIER - al principio - T 4 3.- .JOURNAL - diario, libro auxiliar - F -
30.- FOR INSTANCE i
v
- por
ejemplo
31.- FIXED ASSETS - activos
- K -
fijos 44.
- G GOODS - mercancías,
artículos
KNOWN - conocido
- L -
60.- ON HAND
- existencia
61 . - OUGHT - deber 4 5.- LET US REVIEW - repasemos 46.- LUMP 47.- LOWER
- amontonar, agregar - más bajo
- P -
48.- LESS - menos, inferior 49.- LONG LIVED ASSETS - activos a largo plazo 50.- LONG-TERM LIABILITIES - pasivos
62.-
PROFIT AND LOSS
STATEMENT - estado de pérdidas y ganancias
fijos 63. - PROFIT
- ganancia
PRODUCE - producir
1)5. - PREPAID RENT - renta pagada por adelantado
- M -
66. -
51.- MORTGAGES PAYABLE
- hipotecas por
pagar
PREVIOUS - previo, de antemano
67.- PREPAID EXPENSES
- gastos pagados por
adelantado
5 2.- MUST - deber {$)- MEANINGS -54.- MATCHED
- significados - Q ~
- igualado 68.- QUALIFIES
- califica
- N 5 5.- NET INCOME
- utilidad
- R -
neta '69.- REVENUE - entrada
- O -
70.- RENDERED - prestado,
suministrado
O . - REVENUE - ingreso 56.- OVER - sobre
72.- RELATE - estar en relación
57.- OTHER ASSETS - otros activos
73.- RECEIVABLES - cuentas y documentos por cobrar
58.- ORIGINAL
74.- RELATIONSHIP - relación PN 75.- RATIO - cantidad, número, relación
59.- OPERATING
- primera, original - operación
BALANCE SHEET - S 76.- SET UP - establecer Use- of the balance
77.- SET - juego, serie
sheet
By studying the balance sheet, the proprietor can obtain information that - T -
is useful to him in the. ma-
nagement of his business.
He can observe whether -
he has sufficient cash on hand or. will collect
enough
78.- TYPE - tipo
0
from the accounts receivable to enable him to pay his liabilities when they are due. . - THUS - asi, de este modo
80.- THOUSANDS - millares
The balance sheet may then be defined as a statment showing the assets, liabilities, and capital of a -
- II 81.- UNDER
- bajo, debajo
business at a specific date.
This statement is al-
so called a statement of financial position or statement of financial
condition.
Example "C"
(9
JOHN KELLY Balance Sheet January 31, 197
ASSETS Cash
$ 4,700 100
Supplies Equipment Total Assets
2,500 $
7,300
.
VOCABULARY
LIABILITIES AND CAPITAL
III
Liabilities , \)
Accounts Payable
- A -
$ 1,500
Cap i ta1 Balance January Net
1, 197
Income of January
3 00
Increase in Capital
c
800
Total Capital liabilities
2.- APPARENT - claro, patente, manifiesto
$ 1,100
Less Withdrawals
Total
1.- ACCOUNT FORM - forma de cuenta
$ 5,000
$ 5,800 and Capital
$ 7,3 00
3.- CLASSIFY
- clasificar
4.- CONNECTING The close relationship of the income statement and the balance sheet
is apparent.
:S.
- conectar, enlazar
- COSTLY - costoso, caro
The net income of
$ 1,100 for January, shown as the final figure on the income statement of Example "B", is also shown as a separate figure on the balance sheet of Example "C".
- D 6.- DECREASES - disminuciones
The income statement is thus the connec-
ting link between two balance sheets.
As discusse
earlier, the income and expense items are actually a further analysis of the capital
- G -
account. 7.- GREAT MANY - gran número
The balance sheet of Example "C" is arranged
in re
port form, with the liabilities and capital
sectio
shown below the asset section. arranged
It may be also -
in account form, with the liabilities and
capital sections to the right of, rather than beloi the asset
- L -
section.
8.- LINK - cadena, enlace o 9.- LOST - perdió, perdido
32 THE BALANCE. SHEÉT - O 10.- OBTAINED
OT ' V
- obtenido
The balance sheet becomes a more useful
statement -
for comparison and financial analysis where the - assets and liability groups are classified.
For -
example, an important
state
- P 11.- REPORT FORM - forma de reporte
of business, derivable
index of the financial from the classified
balance
sheet, is the ratio oi current assets to current liabilities. - T -
This current
be at least 2 to 1; that be twice currcnt
12.- TIME CONSUMING
--
ratio ought generally to j • ' •
is, current assets
liabilities.
- tiempo gastado
should
Fo^r ourTtcporpose we
will designate the following c lassifications. Current assets. - W -
converted
Assets reasonably expected
into cash or used
of the business. 13.- WAY - m o d o , forma, camino 14.- WITHDRAWAL
- retiro
taken as one year.
in the current
The current period
(prepaid
operation
is generally -
Examples are cash, inventory, -
notes receivable, accounts receivable, and expenses
to be -
insurance, prepaid
prepaid
rent, etc.) icU
Property plant, and equipment.
Long-lived
^tW^ assets -
used in the production of goods or services. assets, sometimes called ts,are used
These
fixed assets or plant
asse
int$. the operation of the bussines ra-
ther than being held for sale, as are i t em s . ,i fs Other assets.
inventory
I
Various assets other than current -
34
y
/
assets, fixed assets, or assets to which
specific
VOCABULARY
IV
captions are given. V; Current
liabilities
- A - .
Debts which must be satisfied from current assets -
AT LEAST - poi
I< menos
within the next operating period, usually one year. Examples are accounts payable, notes
payable. - B -
Long-term
liabilities.
Liabilities which are paya-
ble beyond the next year. ble and mortgages
Examples are bonds paya-
BEYOND
- más allá, más
adelante
payable. - C COMPÁRTSTON
- comparación, confrontación
CAPTIONS -títulos, membretes
- D DESIGNATE
- apuntar, señalar
DERIVABLE
- derivable, deducible
- F FINANCIAL STATE - estado
— - — - —
financiero
/ - T CHAPTER 8.-
INDEX - indicio, señal,
III
índice CLASSIFYING
TRANSACTIONS
- O After each transaction would be cumbersome and costly to prepare a new equation. / -. - '
|. - OIJGI1T - deber
An efficient way is
to classify the transactions according the balance sheet and income statement. - P -
to items on The
ses and decreases are then recorded according
increa to -
type of item by means of a summary called an account 10.- PURPOSE
- propósito o fin
11.- PLANT ASSETS
- activos de
fabrica
12.- PROPERTY PLANT - propiedades del
The "t" Account negocio This account is known as the "t" account because it resambles the letter "t".
parts (1) the name of the account and the account -
- S -
number Ú . - SOMETIMES
This account has three -
- algunas veces
(2) The debit side
credit side
(right side).
(left side), and
The abbreviations
debit and credit are Dr. and Cr., T j 4.- TAKEN
The Double - Entry
- tomado
for --
respectively.
System
When an amount is entered on the left side of an -
15.- TWICE - dos veces, al doble,
duplicadamente
account, it is a debit and k e debited.
- U 16.- USEFUL - útil
(3) the
the account
is said to -
When an amount is entered on the right
side, it is a credit and the account is said to be credited.
/ - T CHAPTER 8.-
INDEX - indicio, señal,
III
índice CLASSIFYING
TRANSACTIONS
- O After each transaction would be cumbersome and costly to prepare a new equation. / -. - '
|. - OIJGI1T - deber
An efficient way is
to classify the transactions according the balance sheet and income statement. - P -
to items on The
scs and decreases are then recorded according
increa to -
type of item by means of a summary called an account 10.- PURPOSE
- propósito o fin
11.- PLANT ASSETS
- activos de
fabrica
12.- PROPERTY PLANT - propiedades del
The "t" Account negocio This account is known as the "t" account because it resambles the letter "t".
parts (1) the name of the account and the account -
- S -
number Ú . - SOMETIMES
This account has three -
- algunas veces
(2) The debit side
credit side
(right side).
(left side), and
The abbreviations
debit and credit are Dr. and Cr., T j 4.- TAKEN
The Double - Entry
- tomado
for --
respectively.
System
When an amount is entered on the left side of an -
15.- TWICE - dos veces, al doble,
duplicadamente
account, it is a debit and k e debited.
- U 16.- USEFUL - útil
(3) the
the account
is said to -
When an amount is entered on the right
side, it is a credit and the account is said to be credited.
Increases and
receiving m o r e supplies.
Decreases JO*"?
Asset and expense
increases arc recorded
liability, capital
and
we are paying
tV
We credit
cash, because -
out cash.
as debits,
income increases arc recordo CASH
as credits. Asset and expense decreases are recor cr ded as credits 1 iabil i ty , capital, and income de-
SUPPLIES ON
HAND
f/V
creases are recorded
as debits.
DR.
CR.
DR.
+
-
+
CR. -
Example A: Transaction
1.- Mr.
Kelly opened
ting $ 5 , 0 0 0 in cash. cu-Vw'*are cash and Capital. an asset tal
yxe^cC'ti his preactice
$
T h e two accounts affected Jieojevd* Remember that an increase i
(cash) is d e b i t e d , and an
increase
in Capi
is credited.
Transaction
3.-
Bought
DR. +
$
CR . -
5,000
Transaction
+
-
$
2.- Bought
we are substituting asset
CR .
therefore debit equipment
(equipment) and
(supplies).
We are receiving
We are not paying c a s h , but
liability, thereby
EQUIPMENT
(accounts
increasing
an to - -
the -
payable)
ACCOUNTS
PAYABLE.
5,000
supplies for cash $ 300. Her
one asset
Eurnitu
asset
liability account
DR.
from Cindy
$ 2,500.
creating a new CAP 1TAL
equipment
re Company on account
show the increase. CASH
$ 300
$ 3 00
5,000
invc
$
DR.
CR.
DR.
CR.
+
-
-
+
2,500
$
2,500
(cash) for another -
We debit supplies because we are Transaction
4.- Rece ved $ 2,000 in fees earned du-
account cash, as we have received
asset
tl?e°rAefor^°,C we debit
it.
equity
in NI EX PENSI-. S
CASH
$ 2,000 - -
We are increasing
tal, vet we do not^credit capital. temporarily
4
In this case we are injcr.eas^
ring the month,
the capi
It Js better -
DR.
CR.
+
-
to separate the income from the owhe.i^
(capital) and create a new account, Fees In-
$ 5,000
$ 300
$ 2,000
$ 500
CR
l)K . •
$ MUI
come.
ACCOUNTS
CASH
PAYABLE Order of arrangement of accounts
$
DR .
CR.
+
-
DR . -
accounts of one kind are e r o m u ' d t her in the c/As-á ' AO'AAOS
ness.
2. Enter the
ledger.
adjustments.
3. Compute the ad.i ust ed . t r i a 1 balances. 4. Extend the adjusted trial balance figures to - .jjc »v. • ' " either the income statement or balance sheet coNpL «QW* -T ^ ,1c 505