Профессионально–ориентированный иностранный язык для экономических специальностей

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Министерство образования и науки республики Казахстан

Таразский государственный университет им. М.Х. Дулати

Кафедра иностранных языков

Учебно-методическое пособие к дисциплине

«Профессионально – ориентированный иностранный язык»

для экономических специальностей: финансы, УиА, экономика, менеджмент.

                                                                                                    Составители: Ким И.А.

                                                                                                     Кантаева Г.Г.

                                                                                                             Рахимова Ю.С.

Тараз 2016


Unit I   Company structure


Unit II  Management


Unit III Accounting and Auditing


Unit IV Finance




Unit I  Company structure


•Which department - production, finance, accounting, marketing, sales, human resources, etc. - of an organization do you think is the most interesting to work in?

•Is it better to have one immediate boss or to work for more than one manager?

•Do you prefer to work alone or in a team?

•Is it more motivating to be responsible to someone for your work, or responsible for people who report to you?


Ex. 1 Match the departments with their responsibilities

a - Human Resources

b - Marketing

c - Research and Development

d - I.T. (Information Technology)

e - Maintenance

f - Sales

g - Customer Service

h - Finance

i - Dispatch Department

j - Production Department

Responsible for taking care of customer needs

Responsible for selling the product/service

Responsible for making the product

Responsible for how a product/service is advertised and promoted

Responsible for hiring new staff

Responsible for the company's computers and network

Responsible for the office/building

Responsible for discovering new knowledge about the product, improving it and creating new products

Responsible for payments, bills and expenses

Responsible for the delivery of orders

Ex.2 Before reading about traditional company organization check your understanding of some basic terms by matching up the following words and definitions.


to delegate   to report to      autonomous            line authority

function hierarchy or chain of command                        function

1 ___________  a system of authority with different levels, one above the other, e.g. a series of management positions, whose holders can make decisions, or give orders and instructions.

2 ____________ a specific activity in a company, e.g. production, marketing, finance.

3 ___________ independent, able to take decisions without consulting someone at the same level or higher in the chain of command.

4 _______________ the power to give instructions to people at the level below in the chain of command

5 _______________ to be responsible to someone and to take instructions from them

6 _______________ to give someone else responsibility for doing something instead of you


Company structure

The chain of command

Traditionally, organizations have a hierarchical or pyramidal structure, with one person or a group of people at the top, and an increasing number of people below them at each level. This is sometimes called line structure. There is a clear chain of command running down the pyramid. All the people in the organization know what decisions they are able to make, who their line manager (or boss) is (to whom they report), and who their immediate subordinates are (over whom they have line authority, and can give instructions to).

Functional structure

Yet the activities of most organizations are too complicated to be organized in a single hierarchy. Most large manufacturing companies, for example, have a functional structure, including, specialized production, finance, marketing, sales, and human resources departments. This means, for instance, that the production and marketing departments cannot take financial decisions without consulting the finance department. Large organizations are often further divided into separate operating divisions.

A disadvantage of functional organization is that people are often more concerned with the success of their own department than that of the company as a whole, so there are permanent conflicts between departments over what the objectives are.

Flattening hierarchies and delegating responsibility

A problem with very hierarchical organizations is that people at lower levels can't take important decisions, but pass on responsibility to their boss. However, the modem tendency is to reduce the chain of command, take out layers of management, and make the organization much flatter. Advanced IT systems reduced the need for administrative staff and enabled companies to remove layers of workers from the structure. Many companies cut back and eliminate jobs in recessions. Typically, the owners of small firms want to keep as much control over their business as possible, whereas managers in larger businesses want to motivate their staff and often delegate decision making and responsibilities to other people.


1What is the main advantage of a chain of command?

2Why is it not usually possible to organize a large organization in a single hierarchy?

3In what ways can dividing a business functionally cause problems?

4What factors might lead companies to flatten their hierarchies?

5According to the text, what kind of managers might not want to delegate decision making?

Reading 2

Managers, executives and directors

Managers and executives in the UK

All the directors together are the board. They meet in the boardroom.

Non-executive directors are not managers of the company; they are outsiders, often directors of other companies who have particular knowledge of the industry or of particular areas.

The marketing director is the head of marketing; the IT director is the head of IT, etc. These people head or head up their departments. Informally, the head of an activity, a department or an organization is its boss.

An executive or, informally, an exec, is usually a manager at quite a high level (for example, a senior executive). But 'executive' can be used in other contexts to suggest luxury, as in 'executive coach' and 'executive home', even for things that are not actually used by executives.

Managers and executives: US

In the US, the top position may be that of chairman, chairwoman or president. This job is often combined with the position of chief executive officer or CEO. Some companies have a chief operating officer to take care of the day-to-day running of the company. The finance director may be called the chief financial officer.

In the US, senior managers in charge of particular areas are often called vice presidents (VPs).

Ex.1. Look at the managers listed in A. Match each task (1-6) to the manager most likely to be responsible for doing it.

1Meet with advertising agency to discuss new advertisements for the company's holidays.

2Study possible new holiday destinations in detail.

3See the research director to discuss new holiday destinations.

4Contact newspapers to advertise new jobs.

5Deal with complaints from customers.

6Discuss sales figures with sales team.

Ex.2 Who's who on this company board? Look at В opposite and complete the diagram.

A name's Montebello and I'm president and CEO. We have some excellent people on our board, including two who are not involved in the day-to-day running of the company: Gomi and Jones.

B My name's Smith and it's my job to look after the accounts and balance the books. I work closely with Chang and Roberts, as they tell me what their departments need for marketing and research, and I allocate them an annual budget.

3 My name's Dawes and I head up personnel, on the same level in the company as Chang and Roberts.


Match up the verbs and nouns below to make common word combinations.



Makedecision making





Write notes for a short presentation on your company or a company you would like to work for. You should mention:

•what it does:

It designs / makes /provides / distributes/sells / offers / organizes / invests in, etc.

•where it is located:

It has offices / branches /subsidiaries / factories /stores, etc. in ...

•how it is structured and whether this a reason for its success: It consists of I includes / is divided into / is organized in, etc.

•why you want to work for this company.

Then give a short presentation to the class.

Unit II    Management

Lead in

Describing companies

  1. Which of these companies do you or would you like to work for?

1 a family-owned company

2 a multinational company

3 your own company (be self-employed)

  1. Can you name a company in each of these business sectors? Is there one that you would like to work for?

• Telecommunications/Media • Banking and finance

• Food and drink • Engineering

• Transport • Retailing

• Pharmaceuticals/Chemicals           • Manufacturing

• Another service industry           • Construction

• IT/Electronics • Tourism

Ex.A. Complete the chart with the information in the box below. Then write sentences about the companies.

EXAMPLE: Sisco systems in an American company which supplies Internet equipment

American Express container-ship operator fashion/retail Finnish

Japanese Korean Nokia oil and gas pharmaceuticals Toyota

CompanyMain activityNationality

Cisco Systems                Internet-equipment supplierAmerican

___________                     Car manufacturer______________


___________Travel and financial services providerAmerican


SamsungElectronic-goods maker______________


Hapag-Lioyd           _____________________German


Ex.B. Complete the sentences below with the words and phrases in the box.

head office         market share                net profit                   parent company

share price         subsidiary                    turnover                     workforce

1 The amount of money a company receives from sales in a particular period is

called its: turnover.

2 The money a company makes after taking away its costs and tax is its . . . . . . . . . . . . .

3 A company which owns another company is called a . . . . . . . . . . . ..

4 The employees in a particular country or business are called the . . . . . . . . . . . . .

5 The percentage of sales a company has in a particular market is its . . . . . . . . . . . . .

6 The main building or location of a large organization is its . . .. . ... . . . ..

7 The cost of a company's shares is its . . . . . . . . . . . . .

8 A company which is more than 50% owned by another company is called a . . . .

Ex.C Complete this extract from a company report with appropriate words or phrases from the box in Exercise B.

Financial performance

I am pleased to say theparent company(1) has continued its excellent performance. We are changing, growing and doing well at a difficult time for the industry.  ............. (2) was €57.2 million - an increase of 15% on last year, and ........... (3) rose by 5% to €6.4 million.

We are a highly competitive business. We have increased our............ (4) to 20%.

Consequently, our........... (5) has risen and is now at an all-time high of €9.6.

Increased production and strong demand have had a positive effect on our cash now, so we are able to finance a number of new projects. We have successfully moved to our new. .. . . . . . . . .. (6) in central London. We are now planning to start full production at the recently opened Spanish. .. . .. .. . . . . (7) in October.

Finally, thanks once again to our loyal and dedicated............. (8) Our employees will always be our most valuable asset.

Ex.E Now talk in the same way about your own company or one you know well.

Which other companies in your country are doing well or not doing well at the moment?

CD1.18 Listen to the first part of an interview with Susan Barratt, the Chief

Executive Officer of Nature's Way Foods, and correct the six mistakes in this


Nature's Way Foods is a drinks-manufacturing company based on the east coast of Ireland. They put chilled product, the majority of which is milk and cheese, into various types of packaging for the major retailers and various food-service companies in Ireland.

CD1.19 Listen to the second part, where Susan talks about the reasons for the company's success, and complete these notes with one word in each gap.

First reason for success: the . . . . . . . . . . . .

• Health - desire to eat healthy. . . . . . . . .. . .

• Convenience - . . . . . . . . . . . . -poor

• Sustainability- low level of food . . . . . . . . . . .

• Indulgence - diet Monday to Friday, but have several pieces of cake on Friday night

Second reason for success: the way they . . . . . . . . . . . . the business

• High-. . . . . . . . . . . . business

• Produce hundreds of . . . . . . . . . . . . of units

• Need to be very . . . . . . . . . . . . in the way they produce them

• Invested heavily in . . . . . . . . . . . . and processes

CD1.20 Listen to the third part and answer these questions.

1 What two things has Susan enjoyed the most when running a company?

2 What does she not enjoy about running a company?

CD1.21 Listen to the final part and complete this extract.

I've learned a lot of lessons from the companies I've worked for. I think the key thing is that you have to make sure your . . . . . . . . . . . . in the organization are engaged with the organization and have a clear . . . . . . . . . . . . of what that organization is trying to . . . . . . . . . . .?.

If you can get that clarity of . . . . . . . . . . . . and . . . . . . . . . . . . from the people within the organization, then that will help move the business forward in itself.

Speaking 1:Which of the five famous managers below do you find the ' most interesting and impressive?

Akio Morita co-founded a company in Tokyo in 1946, and later changed its name to Sony. He moved to the US, where he had the original ideas for the Walkman and the video cassette recorder. Sony acquired music and film companies, and developed video games. (co-found –совместноосновывать, acquire –приобретать)

While Jack Welch was Chief Executive Officer (CEO) of General Electric in the 1980s and 1990s, its market value increased from $14 billion to more than $410 billion. He fired 10% of the company's managers each year. (market value –рыночнаяцена, fire -увольнять)

Steve Jobs was first the co-founder and later the CEO of Apple. He was fired from his own company (!) in 1985,and co-founded Pixar Animation Studios, but rejoined Apple in 1997, and helped develop the iPod and the iPhone. (CEO – chief executive officer –главныйуправляющий,директорпредприятия)

In 1998, Meg Whitman joined a start-up company called eBay in Silicon Valley as President and CEO. She resigned ten years later, when it was a hugely successful business, planning to run for Governor of California.(start-up company –начинающаякомпания, resign –уходитьвотставку,run for –выставлятькандидатуру )

Carlos Ghosn, born in Brazil, but a French and Lebanese citizen, became the CEO of the Nissan car company in 2001. In 2005, he also became CEO of Renault. At Nissan, he converted huge debts into huge profits. (convert –превращать, debt –долг, profit –прибыль)

Speaking 2: Which of the qualities are most important for managers?

A good manager should:

1 follow the company's goals

2 help subordinates to accomplish their own goals and objectives

3 help young colleagues to develop

4 know how to lead people

5 know how to motivate people

6 make a maximum profit for the owners (the shareholders)

7 meet the targets they have been set

8 successfully execute plans and strategies


Ex.1 Read the text summarizing the different functions of management. Which of the qualities do you think are particularly necessary for the five tasks described by Peter Drucker?

What is management?

Management is important. The success or failure of companies often depends on the quality of their managers. But what do managers do? One well-known classification of the tasks of a manager comes from Peter Drucker. Drucker was an American business professor and consultant who is often called 'The Father of Modern Management'.

Drucker suggested that the work of a manager can be divided into five tasks: planning (setting objectives), organizing, integrating (motivating and communicating), measuring performance, and developing people.

•First of all, senior managers and directors set objectives, and decide how their organization can achieve or accomplish them. This involves developing strategies, plans and precise tactics, and allocating resources of people and money.

•Secondly, managers organize. They analyze and classify the activities of the organization and the relations among them. They divide the work into manageable activities and then into individual tasks. They select people to perform these tasks.

•Thirdly, managers should have skills of motivation and communication. They also have to communicate objectives to the people responsible for attaining them. They make the people, who are responsible for performing individual tasks, form teams. They make decisions about - pay and promotion.

•Fourthly, managers have to measure the performance of their staff, to see whether the objectives or targets set for the organization and for each individual member are achieved.

•Lastly, managers develop people - both their subordinates and themselves.

A company's top managers also have to consider the future, and change the organization's objectives when necessary, and introduce the innovations that will allow the business to continue. Top managers also have to manage a business's relations with customers, suppliers, distributors, bankers, investors, neighboring communities, public authorities, and so on, as well as deal with any crisis that arises.

Although the tasks of a manager can be analyzed and classified, management is not entirely scientific. There are management skills that have to be learnt, but management is also a human skill. Some people are good at it, and others are not. Some people will be unable to put management techniques into practice. Others will have lots of technique, but few good ideas. Excellent managers are quite rare.


Ex.1 Match up the following words and definitions.

  1. 1. consultant
  2. 2. crisis
  3. 3. innovation
  4. 4. objective (noun)
  5. 5. promotion
  6. 6. public sector
  7. 7. strategy
  8. 8. subordinate
  9. 9. integrating
  10. 10. attain
  11. 11. staff
  12. 12.customer
  13. 13. supply
  14. 14. Distribute

Aa plan for achieving success

Вa new idea or method

Сa person with a less important position in an organization

Da person who provides expert advice to a company

Ea situation of danger or difficulty

F         something you plan to do or achieve

Gthe section of the economy under government control

Hto make available for use;

I         to achieve or accomplish (a task, goal, aim, etc)

J         a person who uses goods or services

K        a group of people employed by a company,

L       motivating and communicating

M       when someone is raised to a higher or more important position

N        to supply (goods) to retailers

Ex.2 The text contains a number of common verb-noun combinations. Use the word combinations in the box to complete the sentences below.


allocate resources deal with crises make decisions perform tasks measure performance set objectives supervise subordinates

1After an organization has _________ _________, it has to make sure that it achieves them.

2Managers have to find the best way to ___________ all the human, physical and capital_________ available to them.

3Some people __________ ________better on their own while others work better in teams.

4Managers __________ the work of their _________ and try to develop their abilities.

5Managers ___________the _______of their staff to see whether they are reaching their targets.

6Top managers have to be prepared to _____ ______ ________

if they occur and then have to _________ quick_________.

Ex.3 Summarizing the information from the text, complete the following sentences

1. Setting objectives involves _____________.

2. Organizing function includes ______________.

3. Communicating objectives to the people, managers ___________.

4. Measuring the performance of the staff means ____________.

5. Developing people, managers develop _____________.

6. Excellent managers are quite rare because ______________.

Ex.C Tape script

I am pleased to say the parent company has continued its excellent performance. We are changing, growing and doing well at a difficult time for the industry. Turnover was €57.2 million, an increase of I5% on last year, and net profit rose by 5% to €6.4 million.

We arc a highly competitive business. We have increased our market share to 20%. Consequently, our share price has risen and is now at an all-time high of €9.6.

Increased production and strong demand have had a positive effect on our cash flow, so we are able to finance a number of new projects. We have successfully moved to our new head office in central London. We are now planning to start full production at the recently opened Spanish subsidiary in October.

Finally, thanks once again to our loyal and dedicated workforce. Our employees will always be our most valuable asset.

CD1.18 Tape script

I: Can you tell us about your company?

SB: Nature's Way Foods is a food-manufacturing company based on the south coast of England. We put chilled product, the majority of which is lettuce and fruit, into various types of packaging for the major retailers and various food-service companies in the UK. Examples of retailers would be Tesco\ Morrison's and Waitrose, and in terms of food-service companies, our biggest customer is McDonald's, which I'm sure most of you will be familiar with.


1: What are the reasons for the company's success?

SB: There are various reasons for the company's success. I think one of the major ones is the markets in which we operate. There are some, what we call 'big marketing themes; which are: health, convenience, sustainability and indulgence. We think the products we produce in both leaf and fruit a lot of those themes. So a majority of the UK population have a desire to eat healthy products. They tend to be what we call 'time-poor', i.e. they haven't got much time in their lives for creating great food, so they want to be able to buy a convenient product of good, healthy food.

There was also a theme for sustainability, so people want to feel like they are contributing towards a sustainable world, and a lot of our product has a fairly low level   we call food miles and therefore is fairly sustainable.

Some of our products also have a fairly indulgent feel, so the UK population, has a habit of wanting to be indulgent at certain times.

So they might diet on a Monday to Friday, but when it gets to Friday night, they will have several pieces of cake and maybe a few drinks. I think the other reason for our success is the way we run our business. We arc a high-volume business, so we're producing hundreds of millions of units, so we need to be very efficient in the way we produce them. So we've invested heavily as a business in systems and processes, to make sure we are very efficient in the manner in which we produce

the products for our customers.


1: When running a company, what have you enjoyed most and least?

SB: I think most is achieving what you set out to achieve. So when you're running a company, one of your key objectives, or key roles, is to set the strategy for the company, and then make sure the building blocks arc in place to achieve that strategy. And that l find very satisfying – to set a clear goal for the business and then watch the business, and help the business go and achieve that goal.

I think the other thing which I find very satisfying is creating a team ethic and watching the people grow, and watching people develop and work towards the goals that you set as a business, and work as a team and get enjoyment out of that, and develop as people and as businesspeople within the organization.

I : And least?

SB: I think least is probably the relentlessness of the role as a chief executive. You're never actually off duty, and a business like ours, which is a food-manufacturing company, it's running 364 days a year, so there's always something to be responsible for and something that's happening within your organization. So I think that can be quite tiring. And also, the other thing that sometimes can be wearing, is it is quite a lonely life. You know, you have to make decisions, sometimes you can't talk to other people about them, and they have to be your decisions.


I : What lessons have you learned from the companies you’ve worked for?

SB: I've learned a lot of lessons from the companies I've worked for. I think the key thing is that you have to make sure your people in the organization are engaged with the organization and have a clear understanding of what that organization is trying to achieve. If you can get that clarity of direction and enthusiasm from the people within the organization, then that will help move the business forward in itself.

Unit III  Accounting and auditing

1. Accounting and accountancy

A. Accounting

■Accounting involves recording and summarizing an organization’s transactions or business deals, such as purchases and sales, and reporting them in the form of financial statements. In many countries, the accounting or accountancy profession has professional organizations which operate their own training and examination systems, and make technical and ethical rules: these relate to accepted ways of doing things.

■Bookkeeping is the day-to-day recording of transactions.

■Financial accounting includes bookkeeping, and preparing financial statements for shareholders and creditors (people or organizations who have lent money to a company).

■Management accounting involves the use of accounting data by managers, for making plans and decisions.

B. Auditing

Auditing means examining a company’s systems of control and the accuracy or exactness of its records, looking for errors or possible fraud: where the company may have deliberately given false information.

■An internal audit is carried out by a company’s own accountants or internal auditors.

■An external audit is done by independent auditors: auditors who are not employees of the company.

The external audit examines the truth and fairness of financial statements. It tries to prevent what is called ‘creative accounting’, which means recording transactions and values in a way that produces a false result - usually an artificially high profit.

There is always more than one way of presenting accounts. The accounts of British companies have to give a true and fair view of their financial situation. This means that the financial statements must give a correct and reasonable picture of the company’s current condition.

C. Laws, rules and standards

In most continental European countries, and in Japan, there are laws relating to accounting, established by the government. In the US, companies whose stocks are traded on public stock exchanges have to follow rules set by the Securities and Exchange Commission (SEC), a government agency. In Britain, the rules, which are called standards, have been established by independent organizations such as the Accounting Standards Board (ASB), and by the accountancy profession itself. Companies are expected to apply or use these standards in their annual accounts in order to give a true and fair view.

Companies in most English-speaking countries are largely funded by shareholders, both individuals and financial institutions. In these countries, the financial statements are prepared for shareholders. However, in many continental European countries businesses are largely funded by banks, so accounting and financial statements are prepared for creditors and the tax authorities.

Ex.1.1. What type of work does each person do, and what is the name of each job? Look at textsA andB to help you.

1. Irecord all the purchases and sales made by this department.

2. This month, I’m examining the accounts of a large manufacturing company.

3. Ianalyze the sales figures from the different departments and make decisions about our future activities.

4. Iam responsible for preparing our annual balance sheet.

5. When the accounts are complete, I check them before they are presented to the external auditors.

Ex.1.2.Match the two parts of the sentences. Look at textС to help you.

1In Britain

2In most of continental Europe and Japan

3In the USA

4In Britain and the USA

5In much of continental Europe

  1. accounting rules are established by a government agency,
  2. companies are mainly funded by shareholders or stockholders,
  3. accounting rules are set by an independent organization,
  4. the major source of corporate finance is banks,
  5. accounting rules are set by the government.

Ex.1.3.Find verbs in texts A, В and С that can be used to make word combinations with the nouns below.

1. An audit                          3.Rules

2. Standards                       4.Transactions

Over to you

Is accounting in your country based on standards, rules, laws, or a mixture of these? What accounting system do international companies in your country use?

2. Bookkeeping

A.Double-entry bookkeeping

ZaheerYounis works in the accounting department of a trading company:

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

BrE: debtors; AmE: accounts receivable

BrE: creditors; AmE: accounts payable

BrE: stock; AmE: inventory

B.  Day books and ledgers

‘For accounts with a large number of transactions, like purchases and sales, companies often record the transactions in day books or journals, and then put a daily or weekly summary in the main double-entry records.

In Britain, they call the main books of account nominal ledgers. Creditors - suppliers to whom the company owes money for purchases made on credit - are recorded in a bought ledger. They still use these names, even though these days all the information is on a computer.’

Note: In Britain the terms debtors and creditors can refer to people or companies that owe or are owed money, or to the sums of money in an account or balance sheet.

C.  Balancing the books

‘At the end of an accounting period, for example a year, bookkeepers prepare a trial balance which transfers the debit and credit balances of different accounts onto one page.

As always, the total debits should equal the total credits. The accountants can then use these balances to prepare the organization’s financial statements.’

Ex.2.1. Match the words in the box with the definitions below. Look at textsA andB to help you.



1an amount entered on the left-hand side of an account, recording money paid out

2a book of accounts

3customers who owe money for goods or services not yet paid for

4an amount entered on the right-hand side of an account, recording a payment received

5goods stored ready for sale

6suppliers who are owed money for purchases not yet paid for

Ex.2.2.Complete the sentences. Look at textsA, В andС to help you.

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

2Most businesses record very frequent or numerous transactions in ……….. ……….. or ……….. .

3The main account books are called………. ………, and the book relating to creditors is called the ……… ……… .

4In order to prepare financial statements, companies do a ……… ……… which copies all the debit and credit balances of different accounts onto a single page.

Ex.2.3.Complete the sentences using ‘debit’ or ‘credit’. Look at textA to help you.

1If you buy new assets, you ……….the cash or capital account.

2If you pay some bills, you ………. the liabilities account.

3If you buy materials from a supplier on 60 days’ credit, you ………. the purchases account and the supplier’s account.

4If you sell something to a customer who will pay 30 days later, you ……… the sales account andthe customer’s account.

Over to you

What qualities does a good bookkeeper need? Would you like to work as a bookkeeper? If not, which type of accounting do you think is the most interesting, and why?

3. Auditing

A.Internal auditing

After bookkeepers complete their accounts, and accountants prepare their financial statements, these are checked by internal auditors. An internal audit is an examination of a company’s accounts by its own internal auditors or controllers. They evaluate the accuracy or correctness of the accounts, and check for errors. They make sure that the accounts comply with, or follow, established policies, procedures, standards, laws and regulations. (See Units 7 and 8) The internal auditors also check the company’s systems of control, related to recording transactions, valuing assets and so on. They check to see that these are adequate or sufficient and, if necessary, recommend changes to existing policies and procedures.

B    External auditing

Public companies have to submit their financial statements to external auditors - independent auditors who do not work for the company. The auditors have to give an opinion about whether the financial statements represent a true and fair view of the company’s financial situation and results.

During the audit, the external auditors examine the company’s systems of internal control, to see whether transactions have been recorded correctly. They check whether the assets mentioned on the balance sheet actually exist, and whether their valuation is correct. For example, they usually check that some of the debtors recorded on the balance sheet are genuine. They also check the annual stock take - the count of all the goods held ready for sale. They always look for any unusual items in the company’s account books or statements.

Until recently, the big auditing firms also offered consulting services to the companies whose accounts they audited, giving them advice about business planning, strategy and restructuring. But after a number of big financial scandals, most accounting firms separated their auditing and consulting divisions, because an auditor who is also getting paid to advise a client is no longer totally independent.

BrE: stock take;

AmE: count of the inventory

Ex.3.1. Match the job titles (1-4) with the descriptions. Look at textsA andB to help you.

1bookkeepers     a company employees who check the financial statements

2accountants     b expert accountants working for independent firms who review

companies’ financial statements and accounting records

3internal auditors   c people who prepare financial statements

4external auditors   d people who prepare a company’s day-to-day accounts

Ex.3.2.Match the nouns in the box with the verbs below to make word combinations. Some words can be used twice. Look at texts A and В to help you.

accounts           procedures                  opinions

systems of control   regulations               policies

stock                     takeadvice                                   laws

1. check                                3. examine

2. comply with                      4. give

Over to you

Would you like to work as an external auditor? Do you think they get a very friendly welcome at the companies whose accounts they audit? If not, why not?


A.     Assets, liabilities and capital

Balance Sheet, 31 December 20($'000)

Current assets 3,500                                Liabilities6,000

Fixed assets     6,500                                Shareholders' equity4,000

Total assets10,000                  Total liabilities and Shareholders ‘equity 10,000

Company law in Britain, and the Securities and Exchange Commission in the US, require companies to publish annual balance sheets: statements for shareholders and creditors. The balance sheet is a document which has two halves. The totals of both halves are always the same, so they balance. One half shows a business’s assets, which are things owned by the company, such as factories and machines that will bring future economic benefits. The other half shows the company’s liabilities, and its capital or shareholders’ equity (see below). Liabilities are obligations to pay other organizations or people: money that the company owes, or will owe at a future date. These often include loans, taxes that will soon have to be paid, future pension payments to employees, and bills from suppliers: companies which provide raw materials or parts. If the suppliers have given the buyer a period of time before they have to pay for the goods, this is known as granting credit. Since assets are shown as debits (as the cash or capital account was debited to purchase them), and the total must correspond with the total sum of the credits - that is the liabilities and capital - assets equal liabilities plus capital (or A = L + C).

American and continental European companies usually put assets on the left and capital and liabilities on the right. In Britain, this was traditionally the other way round, but now most British companies use a vertical format, with assets at the top, and liabilities and capital below.

BrE: balance sheet; AmE: balance sheet or statement of financial position

BrE: shareholders' equity; AmE: stockholders' equity

B.   Shareholders' equity

Shareholders’ equity consists of all the money belonging to shareholders. Part of this is share capital - the money the company raised by selling its shares. But shareholders’ equity also includes retained earnings: profits from previous years that have not been distributed - paid out to shareholders - as dividends. Shareholders’ equity is the same as the company’s net assets, or assets minus liabilities.

A balance sheet does not show how much money a company has spent or received during a year. This information is given in other financial statements: the profit and loss account and the cash flow statement.

Ex.4.1.Are the following statements true or false? Find reasons for your answers in texts A andВ.

1. British and American balance sheets show the same information, but arranged differently.

2. The revenue of the company in the past year is shown on the balance sheet.

3. The two sides or halves of a balance sheet always have the same total.

4. The balance sheet gives information on how much money the company has received from sales of shares.

5. The assets total is always the same as the liabilities total.

6. The balance sheet tells you how much money the company owes.

Ex.4.2.Complete the sentences. Look at textsA andВ to help you.

1. ……….are companies that provide other companies with materials, components, etc.

2. ……….are profits that the company has not distributed to shareholders.

3. ……….are things a company owns and uses in its business.

4. ……….consist of everything a company owes.

5. ……….consists of money belonging to a company’s owners.

Ex.4.3.Make word combinations using a word from each box. Then use the word combinations to complete the sentences below. Look at textsA andВ to help you.











1. We ………… a lot of our ………. because we don’t ………… any of our ………. to the shareholders.

2. Most businesses have customers who………. ……….., because they ……….. them 30 or 60 days’ ………. .

3. We have a lot of ……….. that we’ll have to …………later this year.

Over to you

Look at the balance sheets of some large companies. What are the most common sub-divisions of these categories: assets, liabilities, and shareholders' equity?

5. BALANCE SHEET 2: assets

  1. Fixed and current assets

MacKenzieInc, New YorkBalance Sheet 31 December 20_ _ ($’000)

Current assets

Cash and equivalents                                                                                        3,415

Accounts receivable                                                                                         8,568

Inventory                                                                                                         5,699

Other current assets                                                                                          5,562

Total current assets                                                                                         23,244

Non-current assets

Property, plant and equipment                                                                        4,500

Goodwill                                                                                                          950

Long-term investments                                                                                   6,265

Total non-current assets                                                                                   11,715

Total assets                                                                                                   34,959

In accounting, assets are generally divided into fixed and current assets. Fixed assets (or non-current assets) and investments, such as buildings and equipment, will continue to be used by the business for a long time. Current assets are things that will probably be used by the business in the near future. They include cash - money available to spend immediately, debtors - companies or people who owe money they will have to pay in the near future, and stock.

If a company thinks a debt will not be paid, it has to anticipate the loss - take action in preparation for the loss happening, according to the conservatism principle. (See Unit 7) It will write off, or abandon, the sum as a bad debt, and make provisions by charging a corresponding amount against profits: that is, deducting the amount of the debt from the year’s profits.

B.   Valuation

Manufacturing companies generally have a stock of raw materials, work-in-progress - partially manufactured products - and products ready for sale. There are various ways of valuing stock or inventory, but generally they are valued at the lower of cost or market, which means whichever figure is lower: their cost - the purchase price plus the value of any work done on the items - or the current market price. This is another example of conservatism: even if the stock is expected to be sold at a profit, you should not anticipate profits.

C.   Tangible and intangible assets

Assets can also be classified as tangible and intangible. Tangible assets are assets with a physical existence - things you can touch - such as property, plant and equipment.

Tangible assets are generally recorded at their historical cost (see Unit 7) less accumulated depreciation charges - the amount of their cost that has already been deducted from profits. This gives their net book value.

Intangible assets include brand names - legally protected names for a company’s products, patents - exclusive rights to produce a particular new product for a fixed period, and trade marks - names or symbols that are put on products and cannot be used by other companies. Networks of contacts, loyal customers, reputation, trained staff or ‘human capital’, and skilled management can also be considered as intangible assets. Because it is difficult to give an accurate value for any of these things, companies normally only record tangible assets. For this reason, a going concern should be worth more on the stock exchange than simply its net worth or net assets: assets minus liabilities. If a company buys another one at above its net worth - because of its intangible assets - the difference in price is recorded under assets in the balance sheet as goodwill.

Ex.5.1.Find words and expressions in textsA, В andС with the following meanings.

1. an amount of money that is owed but probably won’t be paid

2. the accounting value of a company (assets minus liabilities)

3. a legal right to produce and sell a newly invented product for a certain period of time

4. the historical cost of an asset minus depreciation charges

5. the amount a company pays for another one, in excess of the net value of its assets

6. a legally protected word, phrase, symbol or design used to identify a product

7. to accept that a debt will not be paid

8. to deduct money from profits because of debts that will not be paid

9. products that are not complete or ready for sale

10. he amount of money owed by customers who have bought goods but not yet paid for them

Ex.5.2Match the two parts of the sentences. Look at textsA, В andС to help you.

1. A company’s value on the stock exchange is nearly always

2. Brand names, trade marks, patents, customers, and qualified staff

3. Cash, money owed by customers, and inventory

4. Companies record inventory at the cost of buying or making the items,

5. Companies write off bad debts, and make provisions

6. Land, buildings, factories and equipment

a)are current assets.

b)are examples of intangible assets.

c)are examples of tangible, fixed assets.

d)by deducting the amount from profits.

e)higher than the value of its net assets.

f)or the current market price, whichever is lower.

Ex.5.3.Sort the following into current, fixed and intangible assets. Look at textsA andС to help you.

buildingscash in the bankdebtors

goodwillhuman capitalinvestments

stockland                        reputation

Current assetsFixed assetsIntangible assets

__________         _________       ____________

__________         _________       ____________

__________         _________       ____________

Over to you

Think about the company you work for, or your place of study. What are its most valuable assets? Are they shown on the balance sheet?

6. BALANCE SHEET 3: liabilities

A.    Liabilities

Liabilities are amounts of money that a company owes, and are generally divided into two types - long-term and current. Long-term liabilities or non-current liabilities include bonds. (See Unit 33)

Current liabilities are expected to be paid within a year of the date of the balance sheet.

They include:

■ creditors - largely suppliers of goods or services to the business who are not paid at the

time of purchase

■ planned dividends

■ deferred taxes - money that will have to be paid as tax in the future, although the

payment does not have to be made now.

Current liabilities

Short-term debt1,555

Accounts payable5,049

Accrued expenses8,593

Total current liabilities15,197

Non-current liabilities

Deferred income taxes950

Long-term debt3,402

Other non-current liabilities1,201

Total non-current liabilities5,553

Total liabilities 20,750

Shareholders’ equity

Common stock10,309

Retained earnings3,900


Total liabilities and Shareholders’ equity  34,959

B.    Accrued expenses

Because of the matching principle, under which transactions and other events are reported in the periods to which they relate and not when cash is received or paid, balance sheets usually include accrued expenses. These are expenses that have accumulated or built up during the accounting year but will not be paid until the following year, after the date of the balance sheet. So accrued expenses are charged against income - that is, deducted from profits - even though the bills have not yet been received or the cash paid. Accrued expenses could include taxes and utility bills, for example electricity and water.

C .    Shareholders' equity on the balance sheet

Shareholders’ equity is recorded on the same part of the balance sheet as liabilities, because it is money belonging to the shareholders and not the company.

Shareholders’ equity includes:

  • the originalshare capital (money from stocks or shares issued by the company)
  • share premium: money made if the company sells shares at above their face value - the value written on them
  • retained earnings: profits from previous years that have not been distributed to shareholders
  • reserves: funds set aside from share capital and earnings, retained for emergencies or other future needs.

BrE: share premium;

AmE: paid-in surplus

Ex.6.1.Are the following statements true or false? Find reasons for your answers in textsA, ВandС.

1. A current liability will be paid before the date of the balance sheet.

2. A liability that must be paid in 13 months time is classified as long-term.

3. A company’s accrued expenses are like money an individual saves to pay bills in the future.

4. Shareholders’ equity consists of the money paid for shares, and retained earnings.

5. If companies retain part of their profits, this money no longer belongs to the owners.

6. Companies can sell shares at a higher value than the one stated on them.

Ex.6.2.Find words in textsA, Вand С with the following meanings.

1. money that will be paid in less than 12 months from the balance sheet date

2.the money that investors have paid to buy newly issued shares, minus the shares’ face value

3. delayed, put off or postponed until a later time

4. built up or increased over a period of time

Ex.6.3. Sort the following into assets and liabilities. Look at textsAand В to help you.

Accounts payableLand and buildings Inventory

Accrued expensesInvestments Deferred taxes

DividendsCash and equivalents               Accounts receivable

Long-term debt

    Assets                                    Liabilities

_____________                      ____________

_____________                      ____________

_____________                      ____________

_____________                      ____________

_____________                      ____________

Over to you

Look at the last two annual reports and balance sheets of your company or one you would like to work for. What differences do you notice in the balance sheets and what reasons can you find for these?


A.    Direct and indirect costs

Cost accounting involves calculating the costs of different products or services, so that company managers can know what price to charge for particular products and services and which are the most profitable. Direct costs - those that can be directly related to the production of particular units of a product - are quite easy to calculate. Examples include manufacturing materials and manufacturing wages. But there are also indirect costs or overheads - costs and expenses that cannot be identified with particular manufacturing processes or units of production. Examples include rent or property taxes for the company’s offices and factories, electricity for lighting and heating, the maintenance department, the factory canteen or restaurant, managers’ salaries, and so on.

Costs such as these are often grouped together on the profit and loss account or income statement as Selling, General and Administrative Expenses.

B.    Fixed and variable costs

Companies also differentiate between fixed costs and variable costs. Fixed costs are those that do not change in the short term, even if the production level changes, such as rent and interest payments. Variable costs are those that change in proportion to the volume of production, such as components and raw materials, and overtime payments.

Manufacturing companies have to find a way of allocating fixed and variable costs to the various products they make: that is, they divide up the costs and charge them to the different products. Absorption costing attempts to charge all direct costs and all production costs, and sometimes all indirect costs such as administrative expenses, to each of the company’s products or services. Activity-based costing calculates all the costs connected with a particular activity (e.g. product design, manufacturing, distribution, customer service), even if they are carried out by different departments in the company. Most companies have departments or functions that do not generate any profit but only incur costs (e.g. accounting and legal departments). For accounting purposes, companies often make these departments into cost centres, and allocate or charge all the costs related to them separately.

C.     Breakeven analysis

When deciding whether it would be profitable to produce a product, or offer a service, companies do a breakeven analysis. This compares expected sales of the new product with expected costs - both direct and indirect - at various production levels. The breakeven point is the sales volume - the number of units sold - at which the company covers its costs - pays all its expenses. To make a profit, it is necessary to sell more than this.

Although cost accounting allows companies to calculate production costs, pricing decisions also depend on:

  • the level of demand
  • the prices of competitors’ products
  • the company’s financial situation
  • the company’s objectives - the goals or aims it wants to accomplish
  • the company’s marketing policies - whether it is interested in maximizing sales or maximizing profit.

Ex.7.1. Match the words in the box with the definitions below. Look at textsA,B andC to help you

breakeven pointcost centrefixed costs

overheadsvariable costsprofitable

1. expenses that are not clearly related to production or manufacturing

2. a unit of activity in an organization for which costs are calculated separately

3. costs that depend on the amount produced

4. adjective meaning providing income for a company

5. costs that do not change according to the production volume

6. the sales volume at which a company doesn’t make a loss, but doesn’t make a profit

Ex.7.2.Sort the following into direct, indirect, fixed and variable costs. Look at textsA andВ to help you.






Advertising expenses

Bad debts






Electricity to run machines

Electricity for heating

Equipment repairs

Factory canteen

Overtime pay

Raw materials

Property tax


Ex.7.3.Which of the following statements describes:

1. absorption costing?

2. activity-based costing?

a) As well as direct manufacturing costs - materials and labour - we allocate part of our fixed and variable manufacturing overheads to the cost of every product.

b) We identify all the different functions within the company, and assign costs to products and services according to how much these functions are involved in the process of providing the products and services.

Over to you

What do you think were the most important factors in the pricing of:

■ this book?           ■ two other products you bought recently?





бухгалтер/ есепші


счет /шот

board of directors

совет директоров/директорлар кеңесі


капитал /капитал


служащий /қызметкер

current account

текущий счет /ағымдағы шот

deposit account

депозитный счет /депозиттік шот


вкладчик /салымшы


дивиденд/ дивиденд

draw upon an account (v)

снимать со счета /шотынан шешу

invest (v)

инвестировать /инвестициялау


процент, процентный доход /пайыз, пайыздық табыс

joint stock

акционерный капитал /акционерлік капитал


ссуда, заем, кредит /ссуда, қарыз, несие


прибыль /пайда


резерв, запас /резерв,қор

run the hank (v)

управлять банком /банкті басқару


акции/ акциялар


акционер / акционер


выписка из банковского счета /банкшотынан көшірме

standing order

постоянное поручение клиента банку / клиенттің банкке тұрақты тапсырмасы

Ex.1 Read the text.

The English commercial banks have branches in all the major towns and a similar structure and mode of working is common to them all. The owners are the shareholders. At the outset they provide the necessary capital. They are all organized on the joint stock principle and are registered public companies. The Chairman and Board of Directors are elected by the ordinary shareholders at the Annual General Meeting and are responsible for the efficient management of the bank. The Board is concerned with the overall policy of the bank and the major decisions which put that policy into effect. The Board will appoint a Managing Director who is directly responsible to them and a member of the Board. They will also appoint the most senior executives who in turn appoint the rest of the clerical staff who will be responsible in different capacities for the day to day running of the bank. The essence of a bank's activities is the collection of deposits through current accounts and deposit accounts and the use of these funds to provide loans or funds for investment. The current account is the one commonly held and is drawn upon by cheques and standing orders. The deposit account is more in the nature of a savings account. The pattern of investments which a bank decides upon is crucial because, on the one hand, the bank must use the funds wisely to make a profit and, on the other, funds must be available for depositors to withdraw when they wish to do so. At the end of each business year the Directors recommend and the Annual General Meeting decides how much of the profit should be distributed to the shareholders as dividend, and how much should be retained in the business. In preparation for the Annual General Meeting, a bank publishes its Report and Accounts. These must be sent to every share holder and are also available for anyone with an interest in the affairs of the bank. From the published accounts shareholders can easily determine the total profits the bank has earned and how much is available for distribution,

Ex.2 Answer the questions:

  1. Who owns the English commercial bank?
  2. How does a bank start?
  3. Who chooses the Board?
  4. What is the Board's task?
  5. Who hires the employees?
  6. What are the bank's main activities?
  7. How are the profits distributed?
  8. How are the shareholders kept informed?

Ex. 3 Using suffixes-er, -or, -ier, -ent, -ial,bank      invest    direct      office    execute  work     cash    manage        deposit     own         hold

Ex.4 Explain the following:

  1. to raise capital
  2. to become a public company
  3. to put money into business
  4. an account in a bank from which money can be drawn by cheque!-
  5. profits not paid out as dividends

Ex.5.  Match the method of payment with the definition.

Credit card

a. A piece of paper which transfers money from your account to

somebody else's account.

2. Debit card

3. Charge card

b. Similar to a credit card, but usually operated by a chain of shops or

other retailer.

4. Cheque

5. Traveller's cheque

c. The money is deducted from your bank account almost immediately.

6. Charge account

d. These can be exchanged for foreign currency, or in some cases


accept a bill (v)

акцептовать вексель /вексельдіқабылдау

bank draft

банковская трата /банктікшығын

bank money order

банковский денежный перевод /банктік ақша аударымы

bank knoll, note, bill (US)

банкнота / банкнот(қағаз ақша)


предъявитель, держатель /ұсынушы,иеленуші

bill of exchange

переводной вексель /аудармалы вексель

cash (v)

получать наличные, обналичивать / қолма-қол ақша алу

cashier's check (US)

кассирский чек/ кассалық чек


сертификат, свидетельство /куәлік, сертификат

certified check;.-

удостоверенный чек /куәландырылған чек

certify (v)i

заверять, удостоверять / куәландыру

cheque, check (US)

чек / чек

traveller's cheque

дорожный чек  /жол чегі


монета /тиын


кредитор / кредитор

credit standing

кредитоспособность /несие қабілеттілігі


денежное обращение, деньги, валюта / ақша айналымы, ақша, валюта


достоинство, ценность; деноминация / құны, құндылығы; деноминация

discount a bill (v) endorse/indorse (v)

дисконтировать вексель,  индонсировать, делать передаточную надпись\вексельді дисконттау,индоссолау

forms of exchange

формы обмена / алмастыру формалары

identification in lieu of issue (v)

идентификация ценных бумаг /бағалы қағаздарды сәйкестендіру

legal tender mature (v)

выпускать в обращение законное платежное средство / заңды төлем құралын айналымға шығару

negotiable payee

ремитент, получатель платежа по кредитным обязательствам /кредиттіккарточка  бойынша төлем алушы

payer sight

наступать (о сроке платежа)

плательщикпо кредитным обязательствам /келуі (төлем мерзімі туралы)

кредиттік міндеттемелерді төлеуші


вексель на предъявителя /ұсынушығаарн.вексель

Ex 1.  Read the text

The work of bank is focused on money and financial services. Virtually any actively involving money or advice about financial matters is undertaken by all the commercial banks. The immediate service offered by the bank is the receipt for deposit of coins, notes and cheques and the cashing of cheques, through current accounts. Coins and notes in circulation have the status of "legal lender" that is to say they must be taken in payment of a debt although the extent to which this applies in the case of coins is deliberately restricted for the sake of convenience. The most common means of payment, particularly for significant sums of money, is the cheque since it is both safer and more convenient than using cash. However, it is not legal lender and creditors can refuse to accept it if they wish. Normally both national cheques and traveller's cheques are readily negotiable if the bearer has some means of proving his identity and the creditor can be sure that the cheque will be «honored». To assist the use of cheques, banks now provide their customers with bankers cards which, when used in association with a cheque, will guarantee it up to a stated maximum. If a customer wishes to make payments of large amounts of money by cheque and is not known to the creditor, then he may obtain a «certified cheque» from his bank. Such a cheque is signed by the bank and therefore payment is guaranteed. Those trading overseas, or in conditions where there may be a significant time lapse between sending out goods and their receipt by the customer, may use a Bill of Exchange as a means of payment. This is really a post dated cheque which assures the creditor payment but also gives the buyer opportunity to inspect the goods before the transaction is completed. Those whose credit standing is unknown may have to get the Bill «accepted» before a creditor will take it. Such a process guarantees payment and most work of this kind is undertaken by the merchant banks. Because Bills are post dated creditors may have to wait some time for their money. They can overcome this problem by endorsing the Bill and then either discounting it with a Discount House or a bank or passing it on to another trader in settlement of a debt of their own. By the time it comes to maturity a Bill may have passed through several hands and on each occasion it must be endorsed. The commercial banks participate in this activity in two ways: in part by lending money to the discount houses and in part by discounting bills for their own customers.

Ex. 2 Answer the questions on the text:

  1. What forms of money are called legal lender?
  2. Why are cheques a common form of exchange?
  3. What is the main purpose of a banker's card?
  4. What is the special feature of a certified cheque?
  5. What is the main use of a Bill of Exchange?
  6. Why does a Bill sometimes have to be "accepted"?
  7. In which two ways might a creditor who needed the money indispose of a Bill?

Vocabulary Exercises

Ex.3 List all the forms of money mentioned in the passage and match them with the following definitions:

1.A bank's unqualified guarantee to pay a specified sum to a specified individual or organization.

  1. A negotiable instrument issued only by the Bank of England and signed by the -Chief Cashier of the Bank.
  2. A written order to a bank to pay a stated amount of money.
  3. A negotiable instrument issued by a bank in exchange for cash and readily usable in most parts of the world.
  4. Taken money largely used for small purchases and transactions.
  5. A written order to a bank to pay a stated amount of money to a stated person or, after endorsement, to the bearer on or within a stated time after a given date.

Ex.4 Say what is true and what is false. Correct the false sentences:

1.Coins and bills of every denomination are called legal lender.

  1. Cheques are rarely accepted in lieu of currency.
  2. To cash a traveller's cheque the bearer need only present proper identification.
  3. Bills of Exchange are not legal lender.
  4. A cheque is always guaranteed by a bank.
  5. Certified cheques are always guaranteed by a bank.

Ex.5 For each of the following phrases find another one in the text that explains it:

  1. A piece of currency made of metal.
  2. Unit of the bank note's value.

3.A document in settlement of a large debt guaranteed by the bank.

4.A document which establishes the identity of a person settling by cheque.

5. Cashing in a Bill of Exchange before it is due for payment.

6. The bank's readiness to accept a cheque for payment.

bank     notes     honored    bearer    identification    coins  issued    currency    traveller's cheques

1. While travelling I do not like to carry large amounts of………

  1. I prefer to havewhich arc immediately negotiable.
  2. Traveller's cheques are ..... in different denominations.
  3. To cash the traveller's cheque theshould present proper identification.

5.However, there are merchants who will not accept traveller's cheques even though you present proper

6.I collectof every denomination.

Ex.7 Write sentences of your own:

  1. to sign a cheque
  2. to accept a cheque
  3. to cash a cheque
  4. to make payment by cheque
  5. to certify a cheque
  6. to endorse a cheque
  7. to make out a cheque
  8. to accept liability for
  9. to present your identification document

10.to settle business accounts

3. DepositingMoneywithaBank

active account

активный депозитный счет /белсенді депозиттік шот

accrue (v)

накапливаться / жинақталу

balance (v)

сальдировать, подводить итог, закрывать счета /қортындылау, шоттарды жабу

cancel a cheque (v)

аннулировать чек /чекті жою

compound interest

сложные проценты / күрделі пайыздар

credit (v)

кредитовать / кредиттеу

debit (v)

дебетовать / дебеттеу


вклад, депозит,задаток / салым, депозит, кепілпұл


запас, резерв / қор, резерв,


подлинный, неподдельный / түпнұсқа, шынайы


страхование / сақтандыру

insure against (v)

страховать(ся) / сақтану

interest on bank credits

процентпо банковскому  кредиту / бірақ банк несие пайызын

joint account

совместный счет /Бірлескен тіркелгі


бухгалтерская книга /есепке алу кітабы


жидкий / сұйық


срок платежапо векселю/толем мерзімі


извещение, уведомление / хабарлама


выпущенный в обращение / айналымға шығарылган

overdraft (v)

превышение кредита /несиенің асуы

overdraw (v)

превышение кредитного лимита /кредиттікнесиенің асуы


банковскаярасчетнаякнижка,-депозитнаякнижка,сберегательнаякнижка /банктікесепайырысукітапшасы,-депозиттіккітапша,жинақкітапшасы

per annum

Ежегодно /жыл сайын


номинал векселя 2) капитал 3)основной должник / вексель номиналы 2) капитал 3)негізгі борышкер


Проводка /сым

rate of interest

процентная ставка / пайыздық мөлшерлеме

reconcile (v)

выверять счет / шот шығыспен


комиссионный счет / комиссиялық шығыстар


срок выполнения обязательств / мерзімді міндеттемелер

time certificate

срочный сертификат / Жедел сертификаты


Переводной / аударма

Ex 1. Read the Text

There are two general reasons for using a bank account. The first and most common is the convenience and safety provided by a current account at a bank. The second is that small and perhaps regular surpluses are available to be saved, and for this purpose a bank provides deposit accounts.

A deposit account will not offer a high rate of interest and would not be the best way to save large sums of money for any long period of time, but it is designed to make saving simple, convenient and safe. It is especially appropriate for those who may save small amounts from time to time without any planned regularity or for those who wish to save for a particular purpose in the immediate future, for example for; annual holidays or for the purchase of a major item such as a car. Most customers of a bank who have opened a deposit account will also have a current account and this makes the transfer of amounts of money from one to the other an easy matter. Regular payments in deposit account can be made through a standing order lo the bank that will automatically transfer the agreed amount according to your instructions. Other payments are made on standard forms but it is most convenient and provides a useful record if the depositor uses a paying in book. Interest is calculated every six months and added to the account. The rate of interest varies from time to time and is publicly advertised in any bank. Because the bank uses money deposited with them to lend to others it normally requires about seven days notice of intention to withdraw money from a deposit account, but unless there is a heavy demand for money. They are not likely to insist on this and cash is often immediately available to those who wish to withdraw it. There is an assumption that such notice was given and you would lose seven, day's interest on the money. The increasing need for security and the use of computers in wage payments have combined to make it more common to have a bank account than to be without one. This kind of account is a current one and its most common use is a single regular payment in either a weekly wage or a monthly salary and regular payments out to meet the normal everyday expenses. Most payments are still made by cheque although the use, of the standing order or the direct debit is becoming very common. It is normally expected that a current account will remain in balance and customers who regularly maintain an agreed minimum balance are often given the services of the bank without charge. In general, however, charges are made which vary with the size of the balance. The amount of use of the bank's services and the number of transactions. If the account is overdrawn a further charge, which is interest on the overdrawn amount, is also made. Overdrafts are not permitted automatically and anything other than a small temporary overdraft would have tobeby agreement with the bank manager. Such a facility is often useful particularly when there is a short term disbalance between income and expenditure. On the other hand, since money in a current account does not attract interest, it is not a good idea to maintain large cash balances, these would be better transferred to a deposit account or to an alternative form of saving.

Ex.2 Answer the questions on the text:

  1. What are the two main reasons for opening a bank account?
  2. Which type of account is used by those who wish to save?
  3. What kind of saving is this type of account most suited to?
  4. What is a standing order?

   5.Why does a bank sometimes need notice of intention to withdraw money from saving accounts?

6. What is the most common use of current accounts?

7.Why are some customers not charged for the facility of a current account?

8.Why is it not a good idea to retain large balance in a current account?

Vocabulary Exercises

Ex.3 Choose the right answer:

1. "a current account" is:

  1. one which is available for the time being,
  2. one in which savings arc held,

с) one which is used all the time for day-to-day transactions.

2."a canceled cheque" means:

  1. worthless cheque,
  2. stamped to indicate that payment has been made,
  3. crossed cheque.

3."a genuine signature" is:

  1. a person's name written by himself,
  2. a person's name written correctly,
  3. legible signature,

4."an outstanding cheque" means:

  1. unpaid cheque,
  2. written but not yet presented for payment,
  3. overdue cheque.,

5."a deposit account" is:

  1. one from which regular payments are made,
  2. one in which savings are held,
  3. one from which withdrawals can be made by cheque.

6."rate of interest" is:

  1. the percentage of each unit of money paid for its use,
  2. rate of profitability,

c)portion of an investment on which the interest is calculated.

7. an overdraft" is:

 a)an amount by which the balance in a current account exceeds the value-of a cheque drawn from it,

 b)an amount by which the value of a cheque exceeds the balance in the current account,

c)an excessive balance in a current account.

Ex.4 Say if the sentence is true and what is false. Correct:

1.The teller has to learn to recognize all customers' signatures.

2.If you want to keep your investment fairly liquid, put it in a deposit account.

3.You cannot make withdrawals from your deposit account.

4.Interest is paid by the bank on both current accounts and deposit accounts.

5.Withdrawals arc made from a deposit account by cheque or standing order.

6.Money is easily transferable from a current account to a deposit account.

7.The rate of interest on deposit accounts is fixed.

8.It is easier to get money out of a deposit account than it is from a current account.

4.  Bank Investments



аванс, авансированиеаванстық аванстар


Облигация,  закладная,  долговое обязательство / Облигациялар, ипотека, облигациялар

bonds issue

выпуск облигаций /облигациялар шығарылымы

Blue chips capital

первоклассная ценная бумага / бірінші класты қауіпсіздік


рынок долгосрочного ссудного капитала /капитал облигациялар нарығы


наличные деньги, кассовая наличность /қолма-қол ақша, кассадағы қолма-қол ақша


банковская наличность / банкте қолма-қол ақша

diversify (v)

вкладывать капитал в различные предприятия / инвестиция капитал әртүрлі кәсіпорындар


колебания, изменения курса / тербелістер, бағамын өзгерту

general obligation

облигация под общее обязательство; муниципальная облигация / облигация астында жалпы міндеттеме; муниципалдық облигация

issue bonds (v)

выпускать облигации /облигациялар шығаруға

money market

денежный рынок

рынок краткосрочного ссудного капитала / ақша нарығы

нарыққа қысқа мерзімді несие капиталының

municipal bond offering

облигация муниципалитета

ценные бумаги, предлагаемые к продаже / облигация муниципалитетінің бағалы қағаздар, ұсынылатын сату

portfolio rate of return

портфельцепныхбумаг /тізбекпортфелібағалықағаздар

1) норма прибыли /пайда нормасы

2) коэффициент окупаемости капиталовложений /коэффициенті-капитал салымдарының өзін-өзі ақтау


приведение клиентом учета своих операций в соответствиис.учетом банка; / сәйкес өз операцияларын клиенттердің есебін келтіру. Банк ескере отырып; согласование, выверка /келісу, тексеру


Доходы,   государственные доходы / Табыс мемлекеттік кірістер

revenue bonds

облигации, обеспеченные доходами от определенного объекта /Белгілі бір затты түскен табыстың сүйемелденіп облигациялар


Акция / іс-шаралар


Спекулятивный, рискованный /Тәуекелді, алыпсатарлық


не облагаемый налогом / салық салынбайтын , салық-тегін

working capital

оборотный капитал /айналым капиталы


доход по цепным бумагам 2) доход в виде процентов на вложенный капитал / бағалы қағаздар тізбегі 2) табыс инвестицияланған капиталға бойынша сыйақы түскен кірістер

Ex. 1 Read the text

The investment policy of a bank is based upon the reconciliation of two conflicting aims. On the one hand the bank wants to make as much profit as it can and for this reason it must take the risks of lending money. On the other hand its funds belong to its depositors and must be available whenever they wish to make withdrawals.

There are two things that the bank must therefore do. First, it must keep a proportion of its assets in the form of rash to meet demands. The amount than this needs to be varies very little from one bank to another or from one day to another and experience suggests that it is about six percent. As a cushion against unexpected demands a further proportion of funds is invested at low rates of return in highly liquid lending mostly to firms in the money and capital markets.

The second thing that the bank must do as it ensures that the investments it chooses are sale. This also means that they are relatively low yielding since high yields are associated with risk and with lending tor long periods of lime. Much of a bank's investment is in short and medium government and local government bonds. They yield certain incomes and are readily saleable should the occasion demand.

Advances by a bank to its customers are the least liquid of their assets since there are few borrowers who could repay a loan at very short notice. However, they are also the most profitable of them yielding the highest rate of return. Advances to customers are likely to account for more than two thirds of the bank’s investment portfolio although this will vary on a day to day basis since overdrafts are the most common form of advance and are not immediately controllable by the bank. In general banks do not lend lo industry for long periods of time or for investment projects. They regard themselves as providing working capital rather than fixed capital.

Ex.2 Answer the questions on the text:

  1. What two conflicting aims must a bank reconcile in its investment policy?

2.What must the bank do to be ready to meet demand for cash on the part of its customers?

3.Why does the bank prefer rather low yielding investments?

4.Which investments do visually yield high returns?

5. Which investments are hardly controllable by the bank? Why?

6.Why don't banks usually invest in industrial projects?

Ex.3 Say what is true and what is false. Correct the false, sentences:

1.Bonds are highly liquid investments.

  1. Stocks are less speculative than bonds.
  2. Blue chip issues show a lot of price fluctuation.
    1. It is desirable to diversify one's portfolio.
    2. All municipal bonds are tax-exempt.
    3. Bonds yield uncertain incomes and are difficult to resell.
    4. Advances are the most liquid of bank's assets.
    5. Advances are the most profitable of bank's investments.

Ex.4 For each of the following phrases, find the expression in the text that explains it:

1.a stock of the highest quality

  1. a unit of ownership in a company
  2. the return actually received from an investment
  3. changes in prices
  4. 6. a firm's investment in long term assets
    1. loans and overdrafts granted lo customers

8.bought and sold in an attempt to make profits from price fluctuation

9.the amount of cash needed by a firm for day to day activity

10.a protective barrier against the unexpected

5. Types of Banking Institutions


брокер, маклер / брокер, маклер

brokerage firm of (slock) brokers

брокерское вознаграждение, комиссионные брокера / брокерлік сыйақы, комиссиялық брокер

brokerage house (US

брокерская фирма /брокерлік фирма

commercial bank

коммерческий банк /коммерциялық банк

credit union

кредитный союз /несиелік одақ


выплата в порядке погашения / өтеу ретінде төлем

exchange equalization

валютный уравнительный / валюталық теңестіру

fiduciary finance

доверенное лицо, фидуциар финансовая компания / қорғаншы, фидуциарлық қаржы компаниясы

company lend (v)

ссужать, давать взаймы, одалживать / қарызға беру

lending institution

кредитное учреждение /несиелік мекемесі

national bank

национальный банк / ұлттық банк

savings and loan Association (US)

ссудо-сберегательная ассоциация / жинақ және несие бірлестігі

ration (v)

Нормировать / қалыпқа

security, securities

ценные бумаги / бағалы қағаздар

state bank

государственный банк / Мемлекеттік банк

stock exchange

фондовая биржа /қор биржасы

scrutiny subscribe (v)

подписываться на ч.-л., приобретать по подписке / Жазылымды сатып, жазылу

United States Treasury (Department)

казначейство, министерство финансов /қазынашылық, қаржы министрлігі

to some extent

в какой-то мере, до какой-либо степени /шамада, қандай да бір дәрежесін


Сделка /мәміле


траст, кредит /траст, несие

trust company

трастовая компания /трасттық компания

Ex.1 Read the text

The reason for which the Bank of England was founded in 1694 was to look after the Government's debt, commonly called the National Debt, and this is still a most important function. A large proportion of the debt is made up of Government bonds, that is pieces of paper stating that the holder has subscribed such-and-such a sum of money and is entitled to so much interest per year. Two world wars have helped to swell the issue of bonds to some $,40,000 million. Another sizable slice of debt is in the form of Treasury bills which are rather like bonds with a very short life span before the Government buys them back again and so repays the loan. Their purpose is to provide the government with day-to-day money to cover the inevitable gaps which occur between its disbursements, e.g. on such things as unemployment benefit and its receipts from taxation. A third type of debt is the group of National Savings Securities, of which ordinary Post Office (now National Savings Bank) accounts and Premium Bonds are perhaps the best-known examples.

The Bank of England is the ultimate source from which the general public can obtain cash. Other English banks used to issue their own notes, but now they all use the Bank of England notes. Scottish banks have continued to issue their own, hut it is an expensive undertaking, and is closely controlled by the central bank in England.

The Bank also looks after the bank account of the Government just like an ordinary bank does for its customers. Into this account go all tax receipts and/any other transfers of money from the various banks, and out of it go all payments. Because all the important institutions in the City maintain accounts al the Bank, transfers of money between them and the Government, which go on every day, are made very easily. The Bank merely debits one account and credits another. The Bank also holds accounts for important international institutions like the World Bank, for just over a hundred central banks and also for some ordinary foreign banks, making a total of nearly two hundred accounts.

The Exchange Equalization Account is the name of the fund in which are held the gold and foreign currency reserves of the country. The managers of the fund have the task of intervening from time to time in the otherwise free market for foreign currency, so as to influence the price of the pound in line with Government policy, or simply to try to maintain a reasonably orderly market.

The pound is not the only currency whose price has to be carefully controlled. Most of the major world currencies have the same problems, and all greatly benefit from international cooperation. Dealing with other central banks and managing money on an international scale has an important side of the Bank's work. Every month the Governor (lies to Basle to spend a week-end in conference with his opposite numbers from the central banks of other western industrial countries.

The object of the Bank's management in the monetary field is to support the Government's activities in other fields, e.g. taxation policy, export promotion and so on. The methods of control used by the Bank are based on a system in which money available to be borrowed should be rationed by price, not by orders from the Bank or The Treasury.

The battery of instruments of control the Bank has may be summarized as follows:

1.Suggestion and request.From time to time the Bank will make suggestions to the other institutions in the City, indicating the policy the authorities intend to pursue. If they want specific action, the Government makes a "request" like the following:

"Notice to banks. All banks and finance houses are asked not to provide either loan to persons or check trading facilities for the purchase of..."

2.Open market operations.This is the name given to the activities of the Bank in the financial markets for control purposes. The point is that by its interventions the Bank can influence markets to move in the directions which it desires.

3.Special deposits and supplementary deposits.From time to time, the Government may wish to reduce the amount of money that people can borrow in order to reduce the amount they spend. An effective way of doing this is 10 reduce what the banks have available for lending, and this is done by requiring them to deposit more money at the Bank of England in special accounts from which it cannot be withdrawn until the Bank says so.

Ex.2 Answer questions on the text:

  1. Why and when was the Bank of England founded?
  2. What type of securities make up the National Debt?
  3. What is the money raised in this way spent on?

4. Enumerate the most important functions of the Bank of England.

5.What is the object of a central bank's management in the monetary field?

    6. What principle does the Bank of England follow in exercising its control over the monetary policy?

   7.What instruments of control has the Bank got at its disposal ?

Ex 3 Say what is true and what is false. Correct the false sentences:

  1. Commercial bank's services are limited.
  2. Fiduciary services are handled by trust companies.
  3. Commercial banks don't deal with brokerage services!

4.American state banks offer fewer services than a national bank.

5.The interest on deposits is usually higher in savings and loan associations.

    6.Savings and loan associations offer regular commercial services.

  1. Every English bank issues its own notes.

8.All the important institutions in the City maintain accounts at the Bank of England.

9.The amount of money available for British borrowers depends on the Treasury orders.

Ex.4 Complete the following:

1.We remit money orders.

a) A person who remits is a

b) A person to whom the money order is remitted is a

2.We transfer bank drafts.a) A person who transfers them is a

b) A person to whom they are transferred is a

3You draw out a cheque.

a) A person who draws a cheque is a

b)The bank on which the cheque is drawn is a

A person to whom the cheque is made payable is a

4.One can pledge assets as security.

b) A person to whom assets are pledged is a

5.Loans are granted.

a) A person who grants a loan is a

b) A person to whom a loan is granted is a

Ex.5 Combine the words listed below into meaningful two or three word expressions as possible:





























Ex.6 For each of the following phrases, find the expression in the text that explains it:

1.restricted range of services

  1. services having to do with trusts and estates
  2. services having to do with buying and selling securities
  3. 5. stocks and bonds
    1. a place where stocks are bought and sold

7.  The fund in which the gold foreign currency reserves of Great Britain are held

8. Bonds with a very short life span before the government buys them back again

9.Economic policy which regulates the level of money or liquidity

Ex.7 Demonstrate the meaning of the following expressions № sentences of your own:

  1. to handle transactions
  2. to be a party to a transaction
  3. to manage the estate
  4. to make loans for the purchase of
  5. to borrow money from
  6. to get a loan from
  7. to charge a higher/lower rate of interest
  8. to discuss some fiduciary matters
  9. to provide the government with
    1. to cover the gap between
    2. to maintain an orderly market
    3. to be the subject to scrutiny by


Choose the correct word.

1. Spain now uses the euro. Pesetas are no longer ____________.

a.good moneyb.legal moneyc.legal tender

2. I bought a TV which doesn't work. I'll take it back to the shop to get ___________.

a.my money returnedb.a refundc.a repayment

3. In a shop, to get a refund, you usually have to show the ___________.

a.receiptb.recipec.payment ticket

4. I'm paying for my new car in 36 monthly __________.


5. I earn a lot of money, but I have a lot of _________.


6. Famous paintings are usually sold by __________.

a.bidb.highest pricec.auction

7. In an auction, the item is sold to the person who makes the highest __________.


8. In Japan, the US dollar is __________ .

a.foreign moneyb.strange moneyc.a foreign currency

9. In Britain, it's not usual to discuss your personal __________

a.moneyb.financesc.money arrangements

10. You can _________ a house and __________ a car.

a.hire / rentb.hire / hirec.rent / rent or hire

11. Here's the fifty dollars I __________.

a.owe youb.pay you backc.must return

12. The best things in life are __________.

a.freeb.not for c.not bought and sold

6. Bank correspondence



We would like to open a current account at your bank. We will appreciate your informing us of your conditions in regard to interest rates, service charges, handling fees, etc. Yours sincerely,



We kindly request to open a current account for us in the name of...

A check for ... is enclosed herein as an initial deposit.

We acknowledge that Mr... and Mr... have the right to sign jointly (individually) our newly opened account on our behalf.

Their signatures are:



Yours sincerely,




  1. Since we intend to do business with you, we would be grateful if you provided us by a current account.
  2. Hereby is the request to open a current account at your bank in the name of...
  3. The following persons are empowered to sign all documents as well as to cover our liabilities.

1(name) (signature)


  1. All correspondence is to be directed to...
  2. Bank statements are to be mailed daily/weekly/ monthly/at the end of year.
  3. Payments received from third parties are to be forwarded by mail immediately/shall be handled like bank statements.



Please let us know about conditions for granting a credit on our current account in the amount of...

Our merchandise in stock which has an approximate value of... will be used as collateral.

We would greatly appreciate an early reply.

Yours sincerely,



Could you please send us some information on how at present to invest temporarily available funds in the amount of ...

We are looking forward to an early reply.

Yours sincerely,

  1. Gentlemen,
  2. We intend to transfer an amount of... from our current account to a time deposit account for a period of ... days. Please let us know the rate of interest you are ready to pay us. Yourssincerely,



Enclosed please find due dividend coupons.

Kindly redeem same on our behalf and deposit the money in our account.

Thank you for your co-operation.

Yours sincerely,


dividend coupons



Enclosed please find a check in the amount of... which is to be deposited in our account No....

We would like to be informed of the results as soon as possible.

Thank you for your cooperation.

Yours sincerely,


1 check



Please stop payment on our check. No....   made out onto... in the amount of...

Yours sincerely,



Please cable on our behalf... from our account No.... to the order of... in... to their account with... (bank) in payment of invoice No.... dated-Expenses are to be charged to the receiver. Thank you for your cooperation. Yours sincerely,


  1. As we no longer need our account No...     with you, we request that the account be closed.
  2. Due to the discrepancies which have arisen, we are sorry to inform you that we no longer wish to carry an account with you. Please close our account No....
  3. The closing balance in our account is to be directed to... (bank) in...
  4. The closing debit balance including your claims of interest and commission will be made good immediately after receipt of your final statement.

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