In simple terms this means that an accountant may be employed by a unit of government, by a private business enterprise, or by himself or a firm selling accounting to the public
a) True
b) False
As the government sector in the economy has grown, this area has not become a more significant employer of accountants.
a) True
b) False
They are kept busy in much the same manner as attorneys or medical doctors by serving their own independent clients.
a) True
b) False
Governmental units at all levels employ accountants to maintain and search the accounting records.
a) True
b) False
TEXT 4
FUNCTIONS OF ACCOUNTING
Exercise 4.1
Study the vocabulary:
| major | більш важливий, значний; основний | ||
| complexity | складність; заплутаність; | ||
| to regard | вважати; розглядати | ||
| solution | рішення, вирішення | ||
| to attract | привертати; тягнути за собою | ||
| prestige | престиж | ||
| urgent | терміновий, невідкладний | ||
| revenue | рахунок доходів; державні доходи (public revenues) | ||
| intangible assets | нематеріальні активи | ||
| appropriate | відповідний, підходящий; доречний | ||
| impairment | погіршення, ослаблення; пошкодження, збиток |
Exercise 4.2
Read and translate the text:
Accounting performs four major functions: recording, classifying, summarizing, and interpreting financial information.
In all countries of the world the complexity of economic activity is gradually growing. And this, in its turn, leads to an increasingly important role of accounting as a function of economic management. At present the necessity of improving accounting through raising its operational utility and quality is regarded as one of the most important tasks. The main condition for the solution of this task is improving the quality of accounting personnel. To attract able young people to the study of accounting, to raise its prestige and demonstrate its importance is an urgent task in many countries of the world.
Accountants measure, record and report financial information that is useful for decision making.
Measure
Accountants are trained to recognize when a transaction has financial impact and how the amount is to be determined. Sometimes this is simple, as with inventory purchased with cash. Sometimes it is more complex, as with the amortization of bond premiums, recognition of construction revenue, impairment of intangible assets, and so on.
Record
Accountants are trained to apply generally accepted accounting principles (GAAP) so that the appropriate accounts are affected for any given transaction. In the double-entry system, there is always at least one debit and one credit for each transaction... the question accountants face numerous times each day is which accounts and which amounts are used.
Report
Recording of transactions lead to the presentation of the financial statements: the Income Statement, the Balance Sheet, the Statement of Cash Flows, and the Statement of Retained Earnings. There are rules enforced by the SEC about the format and content of these financial statements, and accountants are trained to prepare these statements.
Exercise 4.3
Fill in the gaps. Then read and translate:
| perform increasingly necessity utility regarded solution urgent improving personnel complexity |
Accounting …1…four major functions: recording, classifying, summarizing, and interpreting financial information.
In all countries of the world the …2…of economic activity is gradually growing. And this, in its turn, leads to an …3…important role of accounting as a function of economic management. At present the …4…of improving accounting through raising its operational …5…and quality is …6…as one of the most important tasks. The main condition for the …7… of this task is …8…the quality of accounting …9…. To attract able young people to the study of accounting, to raise its prestige and demonstrate its importance is an …10…urgent task in many countries of the world.
Exercise 4.4
Make up the sentences from the words:
1. information, decision, measure, Accountants record, and report, financial, that, is, useful, for, making.
2. quality, main, The, personnel, condition, for, the, solution, of, this, task, is improving, the, of, accounting.
3. necessity, utility, At, present, regarded, accounting, the, of, important, improving, through, raising, its, operational, and, quality, is, as, one, of , the most, tasks.
4. to, able, demonstrate, prestige, young, study, people, to, the, of accounting, to raise, its, and, its, attract, importance.
Exercise 4.5
Match the word with the definition:
| major | a | consider or think of (someone or something) in a specified way | |
| complexity | b | a means of solving a problem or dealing with a difficult situation | |
| to regard | c | you use major when you want to describe something that is more important, serious | |
| solution | d | something intricate or complex | |
| to attract | e | widespread respect and admiration felt for someone or something | |
| prestige | f | cause to come to a place or participate in a venture by offering something of interest or advantage | |
| urgent | g | income, esp. when of a company or organization and of a substantial nature | |
| revenue | h | this may be owing to obsolescence, damage, or a fall in the market value of such assets. | |
| intangible assets | i | Assets of an enterprise which cannot be seen or touched. | |
| impairment | j | requiring immediate action or attention |
TEXT 5
AREAS OF ACCOUNTING
Exercise 5.1
Study the vocabulary:
| least-cost method | метод економічності | ||
| primarily | головним чином, першочергово | ||
| specified periods | зазначені періоди | ||
| to reflect | відображати | ||
| to implement | виконувати | ||
| accountability | облік; звітність | ||
| countless | незліченний, незчисленний | ||
| paramount | вищий, першорядний | ||
| an integral part | невід’ємна частина | ||
| variety of purposes | низка цілей | ||
| actual accumulation | реальні накопичення | ||
| managerial accounting | управлінський облік | ||
| interpretation of data | тлумачення; інтерпретація даних | ||
| cost accounting | виробничий облік | ||
| mutually | обопільно; взаємно |
Exercise 5.2
Read and translate the text:
The actual accumulation and interpretation of data may be classified into three areas: financial accounting, managerial accounting, and cost accounting.These areas are not mutually exclusive but represent major areas of concentration within the overall accounting system. In addition to these three «operating» areas of accounting, we find accountants performing audits, rendering all sorts of tax services, preparing and implementing budgets, designing and installing accounting systems, providing countless management advisory services, and making special investigations of all sorts.
Financial accounting deals with the systems, records, and reports developed within a business enterprise primarily for the purpose of accountability. The management of a firm must account in varying degrees to a number of groups, including the owners, the creditors, the workers, the prospective investors, and numerous governmental agencies. This accountability is reflected by the firm's financial accounting system. Records are compiled and reports prepared to reflect the company's financial position at given times and to present the results of its operations for specified periods. The accounting for assets, liabilities, revenues, expenses, and owners’ equity is concerned primarily with financial accounting.
Managerial accounting deals with the useof accounting data for management purposes. Much of the information used by management in making critical decisions is, of course, developed from the company's financial accounting records. In other cases, however, special systems must be set up specifically to accumulate the necessary data. Analysis of financial statements, funds-flow, standard cost systems, and special cost concepts for decision making are a few managerial accounting topics.
Cost accounting systems are generally an integral part of the financial accounting system set up to provide cost data for a variety of purposes. Of paramount importance is the determination of the cost of goods produced, although cost accounting does have many uses beyond the production function. It may be used, for example, to determine the least-cost method of distributing the firm's product, or to evaluate the effectivenessof a particular operation. Emphasis in cost accounting systems is generally placed on unit cost.
Exercise 5.3
Fill in the gaps. Then read and translate:
| enterprise prepared reports expenses account owners accountability financial investors purpose |
…1… accounting deals with the systems, records, and …2… developed within a business …3… primarily for the …4… of accountability. The management of a firm must …5… in varying degrees to a number of groups, including the …6… , the creditors, the workers, the prospective …7… and numerous governmental agencies. This …8… is reflected by the firm's financial accounting system. Records are compiled and reports …9… to reflect the company's financial position at given times and to present the results of its operations for specified periods. The accounting for assets, liabilities, revenues, …10… and owners’ equity is concerned primarily with financial accounting.
Exercise 5.4
Match the words with the definitions:
| owner | a | state , public | |
| accumulation | b | the reason for which anything is done, created, or exists | |
| investigation | c | the result of interpreting; | |
| interpretation | d | an explanation a careful search or examination in order to discover facts | |
| governmental | e | a person who owns | |
| funds-flow | f | the movement of money into and out of a business | |
| managerial | g | income, especially when of an organization and of a substantial nature | |
| purpose | h | the continuous growth of capital by retention of interest or earnings | |
| revenue | i | relating to a manager or to the functions, responsibilities, or position of management | |
| paramount | j | of the greatest importance or significance |
Exercise 5.5
Read the text again and put the sentences into a chronological order:
1. In other cases, however, special systems must be set up specifically to accumulate the necessary data.
2. Much of the information used by management in making critical decisions is, of course, developed from the company's financial accounting records.
3. Analysis of financial statements, funds-flow, standard cost systems, and special cost concepts for decision making are a few managerial accounting topics.
4. Managerial accounting deals with the useof accounting data for management purposes.
TEXT 6
BUDGETING
Exercise 6.1
Study the vocabulary:
| budgeting | складання бюджету | ||
| to motivate | спонукати | ||
| operating plan | виробничий план | ||
| to anticipate | очікувати, передбачати | ||
| primary | основний, найважливіший | ||
| framework | рамки, межа, структура | ||
| fiscal year | бюджетний рік, фінансовий рік | ||
| arbitrarily | довільно, випадково | ||
| master budget | головний бюджет | ||
| control device | контрольний засіб, стандартний план діяльності бізнесу |
Exercise 6.2
Match the words with their meanings:
| 1. budgeting | a) довільно, випадково |
| 2. to motivate | b) контрольний засіб, стандартний план діяльності бізнесу |
| 3. operating plan | c) рамки, межа, структура |
| 4. to anticipate | d) головний бюджет |
| 5. primary | e) бюджетний рік, фінансовий рік |
| 6. framework | f) виробничий план |
| 7. fiscal year | g) основний, найважливіший |
| 8. arbitrarily | h) складання бюджету |
| 9. master budget | i) очікувати, передбачати |
| 10. control device | j) спонукати |
Exercise 6.3
Read and translate the text:
The preparation of a budget is an important aspect of a company’s success. The preparation of it helps management to establish short-term and long-term goals and standards for the company, motivate employees to achieve company goals, provide for a systematic review of performance. The success of the budgeting process depends on the cooperation of all employees.
Budget (of a business) is the financial operating plan for an organization for a fixed period. The budget shows what income is anticipated and how the resources will be used during the budget period. It is a forecast used by a business to plan and control.
The primary objective of the budget is to establish a financial framework for the operations of the business. The accounting period for the budget is usually either the calendar year or the fiscal year. The fiscal year is any arbitrarily chosen twelve-month period that does not correspond to the calendar year.
The total of separate budgets from different departments within a company that shows in detail how the entire business operates is called master budget. As the business year progresses, management can use the budget as a control device that permits monitoring of the company’s operations.
Exercise 6.4
Read the text again to find out which of the following statements are correct:
1. The preparation of a budget is an important aspect of a company’s success.
2. The success of the budgeting process depends on the cooperation of all employees.
3. The success of the budgeting process depends on the chief accountant.
4. Budget of a business is the financial report about past performance.
5. Budget of a business is the financial operating plan for an organization for a fixed period.
6. The budget shows what income was earned and how the resources were used during the last year.
7. The budget shows what income is anticipated and how the resources will be used during the budget period.
8. The primary objective of the budget is to establish a cheering atmosphere in the company.
9. The primary objective of the budget is to establish a financial framework for the operations of the business.
10. The total of separate budgets from different departments within a company that shows in detail how the entire business operates is called master budget.
Exercise 6.5(a)
Match the phrases and words with their meanings:
| 1. успіх компанії | a) forecast |
| 2. довгострокові цілі | b) the primary objective |
| 3. процес складання бюджету | c) income |
| 4. встановлений строк | d) company’s success |
| 5. прибуток | e) the budgeting process |
| 6. прогноз | f) a fixed period |
| 7. найважливіша задача | g) long term goals |
Exercise 6.5(b)
Match the phrases and words with their meanings:
| 1. головний бюджет | a) fiscal year |
| 2. контрольний засіб | b) the budget period |
| 3. контролювання роботи компанії | c) operating plan |
| 4. виробничий план | d) monitoring of the company’s operations |
| 5. бюджетний період | e) control device |
| 6. бюджетний рік | f) master budget |
Exercise 6.6
Match words from list A with words from list B that have a similar meaning:
| 1. operate | a) sum |
| 2. goal | b) allow |
| 3. to progress | c) main |
| 4. achieve | d) expect |
| 5. systematic | e) definite |
| 6. fixed | f) regular |
| 7. anticipate | g) reach |
| 8. primary | h) to develop |
| 9. permit | i) objective |
| 10. total | j) function |
Exercise 6.7
Match words with the correct definition:
| 1. budget | a) an aim or target. |
| 2. master budget | b) a statement about what one thinks will happen in the future. |
| 3. control device | c) the people who control a company. |
| 4. forecast | d) the total of separate budgets from different departments within a company. |
| 5. the fiscal year | e) the main internal workings of business. |
| 6. management | f) a standard plan for the performance of a business by which its operations may be measured and regulated. |
| 7. objective | g) a plan of expected income and expenditure for a particular period of time. |
| 8. operations | h) related to a 12-month period of business activity. |
Exercise 6.8
Fill in the gaps with the appropriate word or phrase:
| motivated budget financial year Budgeting budgets budget fiscal year accounting monitors total |
1. The financial director is responsible for the firm’s … .
2. … involves setting financial goals and standards for an enterprise.
3. Our company’s… is the calendar year, January 1 to December 31.
4. The new channel will be launched with a $3 million promotional ... .
5. A desire to go to business school … her to study mathematics hard.
6. She was given a … of € 25 000 to launch the magazine.
7. In the UK, the government’s ... runs from 6 April to the following 5 April.
8. Our financial manager will calculate the total profit at the end of the ... period.
9. The boss … the quality of her employees’ work.
10. The … of this month’s sales is up 20%.
Exercise 6.9
Fill in the missing prepositions:
| for for by for in of of |
BUDGETING
Budgeting is the process …1… preparing budgets and exercising budgetary control. Budgeting encourages forward thinking …2…managers; serves to help coordinate different functions and departments …3…the firm. It defines the responsibilities …4…individual managers, provides a framework …5… delegating responsibility; and provides an instrument …6…control., and a basis …7… modifying plans, where necessary.
TEXT 7
WHAT ACCOUNTING TASKS CAN BE DONE
WITH A HELP OF A COMPUTER?
Exercise 7.1
Study the vocabulary:
| 1. | to add | 1. | складати, додавати |
| 2. | analysis | 2. | аналіз |
| 3. | bill | 3. | рахунок до оплати; накладна |
| 4. | to design | 4. | конструювати, розробляти |
| 5. | to direct | 5. | направляти, управляти, давати інструкції |
| 6. | invention | 6. | винахід |
| 7. | enthusiastic | 7. | захоплений, повний ентузіазму |
| 8. | to exaggeration | 8. | перебільшення |
| 9. | to generate | 9. | породжувати, створювати, виробляти |
| 10. | to replace | 10. | замінювати |
| 11. | to manage the flow of economic data | 11. | управляти потоком економічних даних |
| 12. | to negotiate agreement | 12. | вести переговори про укладення договору |
| 13. | to send out | 13. | розсилати |
| 14. | sets of financial reports | 14. | комплекти фінансових звітів |
| 15. | subtract | 15. | віднімати |
| 16. | to store data | 16. | зберігати дані |
| 17. | to seek objectives | 17. | шукати цілі |
| 18. | MIS(management information system) | 18. | системи управлінської інформації |
Exercise 7.2
Read the text:
The computer is an electronic tool that is used to collect, organize, and communicate information. This is generally done with great speed. They say, accountants were among the earliest and most enthusiastic users of computers. Before the invention of computers the millions of transactions had been recorded by hand. It often took months to produce financial reports while now it takes days and even hours. But still it would be exaggeration to say that computers do the accountant's job. In fact, it is only an electronic tool doing routine book-keeping operations. But they make accountant's work easier and what is more important increase its efficiency.
Today computers perform a number of functions. First, they collect and store data, information and instructions. Second, they calculate and generate information from various data. Third, they control processes and machines by giving instructions. And last but not least they communicate data and information to other machines. It should be stressed that computers work at least a million times faster a human being, they never make mistakes, do not get bored and more accurate than people. That's why computerized accountancy systems are quite common these days. Many businesses can produce detailed accounts and send out bills using computer programs. Computers may be used to generate complete sets of financial reports immediately upon the request. As it is known, they can add and subtract at the speed of light.
Since computers perform complex analyses for decision-making purposes, many businesses have got management information systems (MIS) and such systems consist of subsystems which provide information needed to ran a business. The most important of these subsystems is the accounting information system. In fact, it plays the primary role of managing the flow of economic data.
At the same time, it is fair to say that although computer systems can perform a lot of functions, there are still activities they cannot replace. These are as follows: first, directing a business to seek future objectives; second, negotiating agreements between parties and third, designing and selling new products or services.
Exercise 7.3