BUSINESS ENGLISH .

Accounting: Task Going Through the Technical Words

Assets encompass both property and owned cash. A current asset is one that the
firm expects to hold for no longer than one year. Liquid assets are included in
current assets because they can be easily converted into cash. Current assets
consist of cash, accounts receivable, merchandise inventories, and prepaid
expenses. Accounts receivable are amounts owed to the firm by customers
purchasing on credit. Prepaid expenses may include insurance costs or legal fees
paid in advance.

Fixed assets are permanent assets of a firm, such as buildings and equipment.
Intangible assets have no physical form or clearly defined value. Goodwill,
representing the firm's positive reputation, is an intangible asset. Accounting
principles allow goodwill to be included in the balance sheet only if the business
was purchased for a value higher than its tangible worth, and the value of
goodwill must be reduced annually.

Moving to the right side of the balance sheet, liabilities represent financial
obligations of the firm. There are two main types: current liabilities, which are
debts payable within a year, and long-term liabilities, which are debts not payable
within a year.

Bank: The Role of Banking

Banks play a vital role in the global economy, providing essential services
worldwide. They assist businesses and individuals in managing money, serving
as establishments for the custody, loan, exchange, or issuance of money, credit
extension, and fund transmission. A banker or bank clerk engages in banking
business, while a bank teller directly handles money transactions.

Modes of Payment

Banks facilitate various modes of payment, including bills of exchange, checks,

credit cards, promissory notes, IOUs, and cash. A bill of exchange is a written
order requiring payment, often used in international trade. Payment can be on
demand or at a specified future date. Payment can be discounted by presenting it
to a bank before maturity.

A hire purchase allows possession of a product before full payment, with

ownership retained by the seller until the final payment. A banker's draft is an
order between banks, specifying payment to someone. Letters of credit request a
foreign correspondent to advance money to a person, repaid by drawing on the
issuing bank. A promissory note is a promise to pay, while an IOU acknowledges
a debt but holds no legal value.

Check Types and Security Measures

A check can be an order or bearer check. Crossing it with parallel lines increases
security, and "account payee only" restricts it to the payee's account. Specific
banks can be indicated for cashing, known as a "special crossing." A bounced
check, indicated by "R.D." (refer to drawer), results from insufficient funds.
Stopped checks prevent dishonour in case of theft. Different types of checks offer
varying levels of security.

Business Organization: Sole Proprietorships, Partnerships, and

Corporations

Sole Proprietorships: A sole proprietorship is a one-person business, 100%

owned and operated by the sole proprietor. It obtains working capital from
personal resources or bank loans, making all major decisions and taking all
profits.

Partnerships: Partnerships involve 2 to 20 people combining capital and skills

for profit. General partnerships share profits and losses, while limited
partnerships have investors with limited liability.

Corporations: Corporations, or joint-stock companies, allow multiple

shareholders, each owning shares representing ownership fractions. Corporations
enjoy limited liability and must register with government authorities, submitting
articles of incorporation containing essential information