Vocabulary. Part II to make money entry salary rent to advertise travelling expense insurance full time work to engage

Part II

Explanations

Part III

Grouping entries. Under the double entry system, expenses incurred on different dates on a certain item such as transport, are grouped under that account in the ledger. This makes it possible to total the expenses on the item for a month.

Entry. It is an item noted in an account book.

Bookkeeping by double entry is a system by which each item is entered

twice in a ledger.

To finalise accounts. To give accounts a final form after obtaining the balance for each account for the financial year.

Financial year. This is the annual period for which accounts are prepared. It may start with any date and cover twelve months but many businesses prefer it to coincide with the calendar year.

Income tax. It is a tax payable by a person or company for net income earned in a year. The rate of an income tax differs for the individual and the company.

Company law. It is the law contained in the Companies Acts and regulates the formation, registration and operation of companies. It specifies the requirements on the appointment of directors, their duties, the issue of shares, the holding of meetings etc.

Exercises

I. Answer the following questions.

1. Why do companies keep accounts?

2. In what account book are entries grouped?

3. What are some of the expenses of a company?

4. What work does the external accountant do?

5. What is the rate of tax on the net profit of a company?

II. Give the meanings of the following words.

1. Entry. 2. To affect. 3. To engage. 4. To advertise. 5. Full time work.

III. Give the word that fit the description.

1. Payment for regular work.

2. Spending of money during travels.

3. The capital of an organisation.

4. Regular payment for the use of land, shop etc.

5. An offer by a company to safeguard against loss in return for reular payments.

Lesson 10

Correspondence in business

Part I

In every business there will be a need to correspond. Customers may enquire about goods and services or even make complaints in writing. A shopkeeper may want to place an order for goods. A printer may require spare parts for his printing press. These requirements can be met by an exchange of letters.

The ten parts of a business letter include date¹, reference², inside address³, salutation4, subject-heading5, body of the letter6, complimentary ending7, signature8, firm title9 and a note relating to enclosure10