Faculty of Economics

Test of English I

Date: 09th December 2021

Name and surname: Stefan Mladenoski 18524

5.1

1. False because company has a separate legal existence from its shareholders.

2. False because owners have limited liability for the company’s debts.

3. True because managers and executive directors run the company for its owners.

4. True because non-executive directors are often more objective.

5. False because the partners are fully liable for company’s debts.

6. False because partnerships are not legal entities.

5.2

share capital

non-executive directors

limited liability

audit committee

corporate governance

1. audit committee: a group of directors to whom the external auditors present their report

2. non-executive directors: members of a board of directors who are not full-time managers of
the company

3. share capital: owners’ money invested in a company

4. limited liability: responsibility for debts up to the value of the company’s share capital

5. corporate governance: the way a company is managed for its owners.

5.3

(a) Memorandum

(b) registered office

(c) purpose

(d) authorized share capital

Complete the following table with appropriate word forms using the word given

Verb Noun(s) Adjective

calculate calculation -

- consistency consistent

- convention conventional

measure measurement -

present presentation -

value value valuable

Complete the following table and use the correct words in the table.

Verb Noun(s) Adjective

assume assumption -

disclose disclosure -

- objectivity objective

recognize recognition -

- subjectivity subjective

verify verification verifiable

1. Both the internal and the external auditors have to verify the accounts.
2. Companies have to disclosure all relevant financial information in their annual reports.
3. Despite the objectivity principle, accountants have to make some subjective judgements.
4. Even if a company is going through a bad period, for accounting purposes we assume it’s a
going concern.

1. revalue – to record something at a different price

2. current assets – assets that will no longer be in the company in 12 months’ time

3. appreciate – to increase rather than decrease in value

4. obsolete – out of date, needing to be replaced by something newer

5. fixed assets – assets that will remain in the company for several years

6.wear out – to become used and damaged

deduct costs

depreciate fixed assets

record market value

record purchase price

reduce value

reduce profits

1. Because we record the purchase price, we don’t have worry about the market value of fixed
assets.

2. To depreciate fixed assets, we deduct part of their costs from profits each year.

3. Because land usually appreciates, companies do not generally reduce its value on the balance
sheet.