Text 5 areas of accounting

Exercise 5.1

Study the vocabulary:

1	least-cost method	1	метод економічності
2	primarily	2	головним чином, першочергово
3	specified periods	3	зазначені періоди
4	to reflect	4	відображати
5	to implement	5	виконувати
6	accountability	6	облік; звітність
7	countless	7	незліченний, незчисленний
8	paramount	8	вищий, першорядний
9	an integral part	9	невід’ємна частина
10	variety of purposes	10	низка цілей
11	actual accumulation	11	реальні накопичення
12	managerial accounting	12	управлінський облік
13	interpretation of data	13	тлумачення; інтерпретація даних
14	cost accounting	14	виробничий облік
15	mutually	15	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 use of 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 effectiveness of 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:

1	owner	a	state , public
2	accumulation	b	the reason for which anything is done, created, or exists
3	investigation	c	the result of interpreting;
4	interpretation	d	an explanation a careful search or examination in order to discover facts
5	governmental	e	a person who owns
6	funds-flow	f	the movement of money into and out of a business
7	managerial	g	income, especially when of an organization and of a substantial nature
8	purpose	h	the continuous growth of capital by retention of interest or earnings
9	revenue	i	relating to a manager or to the functions, responsibilities, or position of management
10	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 use of accounting data for management purposes.