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Text 3. Expanding the accounting equation: revenue, expenses and withdrawals.

New words:

1. Revenue – выручка, валовой доход

2. To charge – требовать оплату, взыскивать, назначать, требовать цену

3. A date – дата, число, срок

4. Payment – платеж, оплата, погашение (долга)

5. Expenses – расходы, издержки, затраты

6. Rent – рента, арендная плата

7. Salary – оклад, жалование

8. To consume – потреблять, расходовать

9. To incur – потерпеть (напр. убытки), принять на себя (напр. расходы)

10. To reduce – сокращать, уменьшать, снижать

11. Net income – чистый доход, чистая прибыль

12. Net profit – чистая прибыль

13. Net loss – чистый убыток

14. Supplies – сырье, материалы

15. Accounting period – отчетный период, период бухгалтерской отчетности

16. Fiscal year – фискальный, финансовый, бюджетный год

17. To coincide – совпадать

18. Withdrawal – отзыв, изъятие, отмена, аннулирование, снятие (со счета)

19. Drawing – выписка тратты (чека), снятие ( денег со счета)

20. Earning – доход, прибыль, заработная плата

21. To offset – возмещать, компенсировать

22. Temporary – временный

23. To expand – расширять

24. Excess – избыток, излишек, превышение


Besides three key accounting elements of every business entity there exist three additional elements: revenue, expenses, withdrawals.

Revenue are the amount the business charges customers for products sold or services performed. Customers may pay with cash or the business owner may allow the customer to pay at a later date (credit). Most business recognize revenue when earned, even if payment has not been received. Revenue increases both assets and owner equity.

Expenses represent the decrease in assets (or increase in liabilities) resulting from efforts to produce revenue. Common examples of expenses are rent, salaries, supplies consumed, and many taxes. As expenses are incurred, either assets are consumed (supplies), cash is paid (salaries), or a promise is made to pay cash at a future date. The promise to pay in the future represents a liability. Most business recognise expenses when incurred, even if cash has not yet been paid. Expenses either decrease assets or increase liabilities; expenses always reduce owner’s equity. If revenues exceed expenses of the period, the excess is net income or net profit for the period. If expenses exceed revenues of the period, the excess is net loss for the period.

The owner can determine the time interval used to measure net income or loss. It may be a month, a quarter (three months), a year, or some other period of time. That concept that income determination can be made on a periodic basis is known as the accounting period concept. Any accounting period of twelve months is called a fiscal year. The fiscal year often coincides with the calendar year.

Withdrawals or drawings, reduce owner’s equity as a result of the owner taking cash or other assets out of the business for personal use. Since earnings are expected to offset withdrawals, this reduction is viewed as temporary.


1. Define each of the additional accounting elements.

2. Match the following additional elements with their definitions:

Revenues represents the decrease in assets

Expenses reduce owner’s equity

Withdrawals the amount for products sold or services perfomed

3. Find in the text the English equivalents for the following words and word combinations:

рента, затраты, расчетный период, временный, возмещать


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