Accounting general definition of accounting

Today, it is impossible to manage a business operation without accurate and timely accounting information. Managers and em­ployees, lenders, suppliers, stockholders, and government agen­cies all rely on the information contained in two financial state­ments. These two reports — the balance sheet and the income statement — are summaries of a firm's activities during a specific time period. They represent the results of perhaps tens of thou­sands of transactions that have occurred during the accounting period.

Accounting is the process of systematically collecting, an­alyzing, and reporting financial information. The basic prod­uct that an accounting firm sells is information needed for the cli­ents.

Many people confuse accounting with bookkeeping. Book­keeping is a necessary part of accounting. Bookkeepers are re­sponsible for recording (or keeping) the financial data that the ac­counting system processes.

The primary users of accounting information are managers. The firm's accounting system provides the information dealing with revenues, costs, accounts receivables, amounts borrowed and owed, profits, return on investment, and the like. This infor­mation can be compiled for the entire firm; for each product; for each sales territory, store, or individual salesperson; for each divi­sion or department; and generally in any way agars plan and set goals, organize, motivate, and control. Lenders and suppliers need this accounting information to evaluate credit risks. Stockholders and potential investors need the information to evaluate soundness of investments, and government agencies need it to confirm tax liabilities, confirm payroll deductions, and approve new issues of stocks and bonds. The firm's accounting system must be able to provide all this information, in the required form.

III. Give the English equivalents:

точный и своевременный, полагаться на что-либо, за определенный период времени, необходимый для клиентов, путать бухгалтерию и счетоводство, обрабатывать финансовые данные, непосредственные пользователи, дебиторская задолженность, прибыло на инвестированный капитал, территория продаж, ставить цели, безопасность вложений, в нужной форме.

IV. Complete the sentences.

1. Today it is impossible to manage …

2. Managers and employees, …

3. Accounting is the process of …

4. Bookkeeping is a necessary …

5. Bookkeepers are responsible for …

6. The firm’s accounting system provides …

7. This information can be compiled for …

8. Stockholders and potential …

V. Agree or disagree to the following.

1. Everyone today manages a business operation without accounting information.

2. The balance sheet and the income statement are summaries of a firm’s activities during a specific time period.

3. The basic product of an accounting firm is information.

4. Accounting is the same as bookkeeping.

5. Accounting is a necessary part of bookkeeping.

6. The primary users of accounting information are managers.

7. Lenders and suppliers don’t need accounting information.

8. Stockholders and potential investors need the information to evaluate soundness of investments.

VI. Find in the text word forms with the suffix –ing. Decide whether it is:

1) Gerund, 2) Participle I.

VII. Find in the text words with the following suffixes, translate them:

1. –tion, 2) –er/or, 3) –ment, 4) –ic, 5) –ly, 6) –ness.

Answer:

1. From what part of the speech were they formed?

1. What part of the speech are they typical of?

VIII. Decide with the help of what suffix from the given above can you form nouns:

to manage –

to contain –

to report –

to sell –

to record –

to provide –

to deal –

to organize –

to motivate –

IX. Answer the questions.

1. What is necessary to manage a business operation?

2. In what financial statements is all the information contained?

3. What is accounting?

4. Why shouldn’t we confuse accounting and bookkeeping?

5. What are bookkeepers responsible for?

6. Who are the primary users of accounting information?

7. How can accounting information help lenders and suppliers?

8. Why do stockholders and potential investors need the information?

X. Speak about general definition of accounting. Use the following words:

accurate and timely accounting, two financial statements, the basic product, bookkeeping, the primary users, dealing with, lenders and suppliers, stockholders and investors, government agencies, in the required form.

Lesson IX

I. Read and translate the following international words without using a dictionary:

basis, firm, inventory, minus, partner, corporation, total, plus, algebraically, standard form, balance, financial, position, to demonstrate, period, information, industry, to operate, to compute, activity.

II. Remember the following words:

accounting equation – бухгалтерская сбалансированность (дебит и кредит)

owner’s equity – собственный (уставной) акционерный капитал

retained earning – нераспределенная прибыль

ratio – соотношение, коэффициент

account receivable – сумма, причитающаяся к получению

debt financing - долговое финансирование (т.е. путем получения займов)