Lesson Balance sheet

Lesson 2. Balance sheet


An Income Statement shows a company’s performance over a period of time, whereas the Balance Sheet show a company’s net worth at a particular point in time. Both are important when evaluating the company’s financial position.
The balance sheet lists what the business owns (assets) and what it owes (liabilities).
Assets are anything the business owns, including cash, accounts receivable, inventory, machinery, and property. There are two types of assets: current and long term. Current assets can be quickly converted into cash, like inventory. Long-term assets are items that will be kept for many years, such as property.
Liabilities are business debts, including loans, accounts payable, taxes and wages. Liabilities can also be classified as current or long-term.
Equity is the amount of money that owners and investors have put into the business. In accounting terms, the Balance sheet must balance; that is Assets = Liabilities + Equity.



READING


Task 3. Mark true and false sentences according to the text.

1. 
   The Income Statement shows a company’s net worth at a particular point in time. (False )
   
2. 
   Assets are anything the business owns, including cash, accounts receivable, inventory, machinery, and property. ( True )
   
3. 
   Liabilities are business assets, including buildings, equipment and inventory. (False )
   
4. 
   Current assets can be quickly converted into cash, like inventory. ( True )
   
5. 
   Long-term assets are items that will be kept for a short period of time, such as stocks. (False )
   
6. 
   The Balance Sheet must not balance; that is Assets ≠ Liabilities + Equity. (False )
   

VOCABULARY


Task 4. Find synonyms and antonyms.