Text 2 accounting system

Exercise 2.1

Study the vocabulary:

1	a grocery store	1	овочевий магазин
2	an international oil exploration and refining business	2	міжнародний нафтовий та нафтопереробний бізнес
3	to appreciate	3	оцінювати
4	premises and fittings	4	будівлі та освітлювальні прилади
5	to outweigh	5	бути важчим, переважувати
6	to be closely involved in day-to-day operations	6	бути безпосередньо залученим до щоденних операцій
7	to become a manager's “eyes and ears”	7	стати „очима та вухами” менеджера (тобто стати помічником)
8	to be both sophisticated and expensive to operate	8	бути одночасно складним та дорогим для роботи

Exercise 2.2

Read and translate the text:

1. As it is known, accounting is concerned with providing economic information for decision-making purposes. The accounting system must, therefore:

• gather relevant economic information;

• shape this information into a form which is suitable for users;

• communicate the information to users.

In practice, accounting systems can vary considerably in design and level of sophistication. Thus, the accounting system of a small grocery store may appear to be totally different in nature to the accounting system of an international oil exploration and refining business. However, there are certain elements which are common to all accounting systems and which need to be identified in order to appreciate the functioning of these systems.

2. These common elements are:

• Information collection — establishing procedures to ensure that relevant economic information is collected;

• Information recording — recording and classifying the collected information in a logical manner;

• Information evaluation — analysing the information which has been collected and recorded and arriving at an appropriate economic assessment;

• Information reporting — communicating the analysed information in the form of reports which are suitable for the needs of users.

When designing an accounting system for a business, many factors have to be taken into account, including:

• the cost of the system;

• the complexity of the system;

• the amount of detailed information the system is required to give.

For all users of the system, it is important to consider the costs of the system and to weigh these costs against the expected benefits.

3. The owner-manager of a small grocery store may be prepared to accept a relatively simple accounting system on the basis that it is inexpensive to operate. The owner-manager is likely to have a reasonable understanding of the financial position and performance of the business as a result of the day-to-day involvement in trading operations, and thus be familiar with the amount of trade carried out, the level of stock and cash, the condition of the premises and fittings, and so on. Although a complex accounting system may provide more accurate and detailed information, this information is not often vital and the costs of operating the system would outweigh the additional benefits derived.

A senior manager in an international oil exploration and refining business, however, may be responsible for different trading operations throughout the world, and cannot, therefore, be closely involved in day-to-day operations. In order to overcome the problem of remoteness the accounting system can become a manager's 'eyes and ears' providing information concerning the financial position and performance of trading operations. The complexity of the business and the needs of the manager for detailed information will mean that the accounting system is likely to be both sophisticated and expensive to operate. However, the benefits of the system in terms of improved economic decision-making should outweigh its costs.

Exercise 2.3

Read the text again and choose the best variant:

1. The accounting system must …

1. gather appropriate economic information

2. gather official economic information

3. gather unrelated economic information

2. The accounting systems of different enterprises ...

1. are always the same in nature of the accounting systems

2. are never different in nature of the accounting systems

3. may be totally different in nature of the accounting systems

3. Recording and classifying the collected information in a logical manner is called …

1. information reporting

2. information recording

3. information evaluation

4. The cost of an accounting system in any business …

1. is the same

2. is never different

3. is different

5. Although a complex accounting system may provide more accurate and detailed information, this information …

1. is always vital and the expenses on operating the system would outweigh the additional benefits derived.

2. is not often vital and the costs of operating the system would be less important than the additional benefits derived.

3. is not often vital and the costs of operating the system would outweigh the additional benefits derived.

Exercise 2.4

Read the last part of the text again and fill in the gaps. Then read and translate:

expensive; manager; position; business; needs; outweigh; responsible; system; benefits; involved;

A senior…1…in an international oil exploration and refining…2…, however, may be…3…for different trading operations throughout the world, and cannot, therefore, be closely…4…in day-to-day operations. In order to overcome the problem of remoteness the accounting …5…can become a manager's 'eyes and ears' providing information concerning the financial…6…and performance of trading operations. The complexity of the business and the…7…of the manager for detailed information will mean that the accounting system is likely to be both sophisticated and …8…to operate. However, the…9…of the system in terms of improved economic decision-making should…10…its costs.

Exercise 2.5

Read the whole text again and choose the best answer:

1. How many common elements which are available in accounting systems are mentioned in the text?

a) 5;

b) 4;

c) 6

2. Which factors designing an accounting system for a business have to be taken into account?

a) the cost and the complexity of the system;

b) the price and the simplicity of the system;

c) the budget and the density of the system

3. On what basis may the owner-manager of a small grocery store be prepared to accept a relatively simple accounting system?

a) on the basis that it is inexpensive to operate.

b) on the basis that it is expensive to operate.

c) on the basis that it is inexpensive to activate.

4. What to do in order to overcome the problem of remoteness?

a) the accounting system can be closely involved in day-to-day operations;

b) the accounting system can become a manager's 'eyes and ears';

c) the accounting system can provide performance of trading operations

5. What will the complexity of the business and the needs of the manager for detailed information mean?

a) It will mean that the accounting system is likely to be of no use and cheap in operations.

b) It will mean that the accounting system is likely to be unused and expensive to operate.

c) It will mean that the benefits of the system in terms of improved economic decision-making should prevail over its costs.