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Module code: 569

📚 Financial Statements A2

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A balance sheet is an important financial document that shows what a company owns and what it owes. It gives a clear picture of the company's financial situation at one specific moment in time, like a photograph of the company's money and property.

Let's understand the key words. Own means to have something that belongs to you. For example, 'I own a car' means the car is mine. Owe means to need to pay money back to someone. For example, 'I owe the bank €10,000' means I must pay the bank this money. Assets are all the things a company owns that have value, like buildings, equipment, money in the bank, or products to sell. Liabilities are all the money a company owes to other people or organizations, like bank loans or money owed to suppliers.

The balance sheet is important because it helps managers, investors, and banks understand if a company is healthy. If a company owns more than it owes (more assets than liabilities), this is usually good. If a company owes more than it owns (more liabilities than assets), this can be a problem. Business people look at the balance sheet before they decide to invest money in a company or lend money to it.

How to Check the Balance Sheet

Core PathWay
A2

1 🎯 Purpose & What 'Good' Looks Like

When you check a balance sheet, you look at the company’s money and the things it owns. You want to see if the numbers are correct and if everything adds up. Good checking means you find any mistakes and ask questions about strange figures. You use a neutral and polite tone in meetings and emails. You compare this month with last month. You notice if assets went up or liabilities went down. You report what you find to your manager or team.

Quick openers you can use:
“I checked the balance sheet and I have some questions.”
“Can we look at these numbers together?”

💬 Dialogue 1: Checking Together

Two colleagues check a balance sheet at their desks

Sarah: “I will check the balance sheet now.”
Tom: “Good. Look at the totals first. They are at the bottom.”
Sarah: “OK. The assets equal the liabilities. That's correct.”
Tom: “Great. Now compare it with last month. Do you see any changes?”
Sarah: “Yes, I can see an increase in cash. It went up.”
Tom: “That's right. Are there any mistakes in the numbers?”
Sarah: “No, everything adds up. The totals are correct.”
Tom: “Perfect. Good work today.”

2 🧭 Move Map (Step-by-Step Strategy)

Step 1: Open the balance sheet
Purpose: Start your work and see the document.
“I will look at the balance sheet now.”
“Let me open this month’s report.”

Step 2: Check the totals
Purpose: See if assets equal liabilities plus owner money.
“First, I need to check if the totals match.”
“Do these figures add up correctly?”

Step 3: Compare with last month
Purpose: Find any big differences or changes.
“I will compare this month with last month.”
“I can see an increase in cash here.”

Step 4: Look for mistakes
Purpose: Find errors in numbers or missing information.
“I notice this number looks wrong.”
“There is a difference in this line.”

Step 5: Ask questions
Purpose: Clarify things you don’t understand.
“Can you clarify this figure for me?”
“I have a question about this section.”

Step 6: Report your findings
Purpose: Tell your team what you found.
“I checked everything and found two mistakes.”
“The balance sheet is correct now.”

💬 Dialogue 2: Asking About an Error

A team member asks a polite question in a meeting

Lisa: “I checked the numbers and I have a question.”
Mark: “Sure, what is it? I can help you.”
Lisa: “Can you clarify this figure in the equipment section?”
Mark: “Which line? There are many lines in that section.”
Lisa: “The bottom line. It shows 5,000 but I think it was 3,000 last month.”
Mark: “Let me look at that. You're right. There's an error here.”
Lisa: “OK. What should we do about the error?”
Mark: “I will fix it now. Thanks for finding it!”

3 💬 Phrasebank by Function (Grouped Starters)

Opening the task:
“I will check the balance sheet today.”
“Let me look at these numbers.”
“I need to see the report first.”

Checking totals:
“The totals match on the left side and right side.”
“These figures add up correctly.”
“The assets equal the liabilities plus owner money.”
“This number doesn’t add up.”

Comparing periods:
“Last month, cash was lower.”
“I can see an increase in equipment.”
“There is a decrease in debt this month.”
“Let me compare the two months.”

Finding problems (neutral):
“I notice a difference here.”
“This figure looks strange.”
“I find a mistake in this row.”

Finding problems (polite):
“Can we check this number together?”
“I think there is an error in this column.”
“Maybe this line is wrong?”

Asking for clarification:
“Can you clarify this for me?”
“I have a question about this section.”
“What does this figure show?”
“Can you confirm this number?”

Reporting findings:
“I checked the balance sheet and everything is correct.”
“I found two mistakes in the bottom section.”
“The report is ready now.”
“All the numbers match.”

💬 Dialogue 3: Reporting to Manager

Employee reports findings after checking the balance sheet

Sarah: “I finished checking the balance sheet.”
Tom: “Good. How does it look? Are there any problems?”
Sarah: “I found one mistake in the debt column.”
Tom: “OK. What's the difference? What is wrong?”
Sarah: “The number should be 2,000, not 2,200.”
Tom: “I see. Can you correct it now?”
Sarah: “Yes, I will fix it now. It will take five minutes.”
Tom: “Perfect. Confirm when it's ready. Send me a message.”

4 📨 Micro-Templates (Email/Chat)

EMAIL TEMPLATE:

Subject: Balance Sheet Check – [Month]

Hi [Name],

I checked the balance sheet for [month]. The totals add up correctly. I compared it with last month and I notice an increase in cash. There is one question – can you clarify the figure in the equipment line? It shows [number] but I think it was [number] before.

Please confirm when you can.

Thanks,
[Your name]

—

CHAT TEMPLATE:

Hi! I looked at the balance sheet. Quick question – the debt number in row 5 doesn’t match last month. Can we check this together? I find a difference of [amount]. Let me know! 👍

💬 Dialogue 4: Explaining the Balance Sheet

An experienced worker explains a balance sheet to a new colleague

Anna: “Can you explain this balance sheet to me?”
David: “Sure. A balance sheet shows what the company has and what it owes.”
Anna: “What are assets? I don't know this word.”
David: “Assets are things the company has. This means money, equipment, and buildings.”
Anna: “I see. And what are liabilities?”
David: “Liabilities are money the company owes. This means debts and bills to pay.”
Anna: “So assets and liabilities must be equal?”
David: “Exactly! That's why we call it a balance sheet. Good question!”

5 🎭 Micro-Dialogues in Action

Dialogue 1: Neutral check-in (at desk)

Sarah: I will check the balance sheet now.
Tom: Good. Look at the totals first.
Sarah: OK. The assets equal the liabilities. That’s correct.
Tom: Great. Compare it with last month too.
Sarah: I can see an increase in cash.
Tom: Yes, that’s right. Any mistakes?
Sarah: No, everything adds up.

—

Dialogue 2: Polite question (in meeting)

Lisa: I checked the numbers and I have a question.
Mark: Sure, what is it?
Lisa: Can you clarify this figure in the equipment section?
Mark: Which line?
Lisa: The bottom line. It shows 5,000 but I think it was 3,000 last month.
Mark: Let me look at that. You’re right – there’s an error. Thanks for finding it!

—

Dialogue 3: Reporting findings (to manager)

Sarah: I finished checking the balance sheet.
Tom: How does it look?
Sarah: I found one mistake in the debt column.
Tom: What’s the difference?
Sarah: The number should be 2,000, not 2,200.
Tom: Can you correct it?
Sarah: Yes, I will fix it now.
Tom: Good work. Confirm when it’s ready.

💬 Dialogue 5: Monthly Review

Two colleagues compare balance sheets from different months

Mike: “I need to compare this month with last month.”
Rachel: “OK. Put the two balance sheets next to each other.”
Mike: “I can see an increase in the cash. It went from 10,000 to 12,000.”
Rachel: “That's good news. What about the equipment section?”
Mike: “The equipment shows a small decrease. It went down a little.”
Rachel: “Did you check all the totals? Do they add up correctly?”
Mike: “Yes, I checked everything. The totals are correct.”
Rachel: “Great. Write a short note about the changes for the manager.”

6 ⚠️ Pitfalls → Fixes → Best

Pitfall 1: Too direct/unclear
❌ Bad: “This is wrong.”

✓ Better: “I think there is a mistake here.”

✓ ✓ Best: “I notice a difference in this number – can we check it?”

Pitfall 2: No comparison
❌ Bad: “The cash is 5,000.”

✓ Better: “The cash is 5,000 this month.”

✓ ✓ Best: “The cash is 5,000 this month – it was 4,000 last month.”

Pitfall 3: Missing question/clarification
❌ Bad: “This number looks strange.”

✓ Better: “This number looks strange – is it correct?”

✓ ✓ Best: “Can you clarify this figure? It shows 3,000 but I expected 2,500.”

Pitfall 4: Vague reporting
❌ Bad: “I looked at it.”

✓ Better: “I checked the balance sheet.”

✓ ✓ Best: “I checked the balance sheet and all the totals match.”

Pitfall 5: Wrong verb choice
❌ Bad: “I saw the balance sheet.” (= you just looked)

✓ Better: “I looked at the balance sheet.” (= you examined it)

✓ ✓ Best: “I checked the balance sheet.” (= you examined it carefully)

Key grammar patterns:
– Use present simple for routines: “I check the balance sheet every month.”
– Use can for polite requests: “Can you clarify this?”
– Use comparatives for differences: “The cash is higher this month.”
– Use imperatives for instructions: “Check the totals first.”

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