13. Basics of accountancy, types of repórting.

Imagine that I work as an accountant at firm «Progress». This position I occupy the second year and I want to say that my work is very interesting, but it requires great responsibility.

I want to tell you about the basic financial statements and that are use in business.

It should be noted that, accounting is the recording, classifying, summarizing and interpreting of the business activities that can be expressed in monetary terms.

Accounting information can be classified into two categories: financial accounting and managerial accounting.

Financial statements is accounting, which contains information about the financial position, results of operations and cash flows of the enterprise for the period.

In general, we use 5 repórting forms, namely:

• Balance Sheet

• Income Statement

• Statement of cash flows

• Owner’s equity statement

• Notes to the annual financial statements.

So, Balance Sheet – a statement of the firm’s financial position at specific point in time.

Income Statement – a statement summarizing the firm’s revenues and expenses over an accounting period, generally a quarter or a year.

Statement of cash flows - a statement of income and expenditure of funds as a result of the company during the repórting period.

Owner’s equity statement – the report, which reflects changes in equity of the enterprise during the reporting year.

And, notes to the annual financial statements that is set of indicators and explanations, which provides detailed articles and validity of the financial statements and other disclosures provided by the relevant provisions.

In conclusion, I would like to say that the financial statements show the overall financial condition of the company and of great interest to investors.

14. Types of budgets.

My task is to tell you about types of budgets that are valid in Ukraine.

Every person, every family, every organization or every country creates and uses a budget.

At the beginning I want to say that a budget is a plan outlining the obtaining and use of financial and other resources over some given time period.

The budget system of Ukraine consists of the State Budget of Ukraine, Republican Budget of Crimea, and local budgets. The totality of all budgets is called the master budget of Ukraine. The master budget is a summary of all phases of country’s plans and goals for the future.

It should be noted that most firms prepare yearly budgets from short-term and long-term financial forecasts. There are usually several budgets established in a firm: an operating budget, a capital budget, a cash budget and a master budget.

An operating budget is the projection of money allocation to various costs and expenses needed to run or operate the business. How much the firm will spend on supplies, travel, rent, advertising or salaries determines in this budget.

A capital budget consists of the firm’s spending plans: the purchase of such assets as property, building and equipment.

A cash budget is the projected cash balance at the end of a given period. It is important for managers in borrowing, debt repayment, cash disbursements, and short-term investment expectations.

A master budget ties in all the above mentioned budgets and summarizes the proposed financial activities of the firm.

So, as a conclusion it can be stated that the budget of Ukraine is plan creation and use of financial resources for the functions carried out by the government of Ukraine.