4. Answer the following questions:

1. What is accounting?

2. What role does accounting play in economic and social life?

3. What is accounting information?

4. Who uses financial reports?

5. What is the objective of financial statements?

6. What information do financial statements provide?

7. Is accounting a service activity?

5. Say if the following statements are true or false:

1. Accounting is recording and sorting data connected with business transactions.

2. Accounting is not important in any economic system.

3. There is one definite description of accounting.

4. Accounting is a service activity.

5. Financial statements provide information on tax services.

6. Financial statements provide information for all interested in it.

7. Financial statements provide information about economic performance of the entity.

6. Substitute the words given in a bold type for their synonyms:

Identify; wide; actually; concise; reliable; scarce; communicating; essential; in effect, to keep; broadly; to form; information; manually; to record, sound.

1. Because of the large range of accounting activity, there is no accurate description of accounting.

2. Right decisions, based on safe information, are important for the efficient allocation and use of scanty resources.

3. Accounting has been defined widely as the process of identifying, measuring and passing economic information.

4. Many people mix accounting and bookkeeping and look on them as one and the same. In fact, they identify the whole with one of its parts.

5. Indeed, bookkeeping is only a part of accounting, the record-making part.

6. To retain books, is to record transactions either on a computer or by hand or with a bookkeeping machine.

7. The accountant should have the ability to create the accounting system: to analyze, and write complex, non-routing transactions, and to analyze and interpret accounting data.

UNIT 2

1.Memorize the following words and word-combinations:

manage - вести, керувати

rely on - полагаться, покладатися

balance sheet - балансовый отчет, балансовий звіт

income statement - отчет о доходах, звіт про прибуток

accounting period - отчетный период, звітний період

revenue - доход, доходи

accounts receivable - счета к оплате, рахунки дебіторів

stockholder - акционер, акціонер

tax liability - задолженность по налоговым платежам,

заборгованість за податковими платежами

payroll deduction - отчисление на заработную плату,

відрахування

stocks and bonds - ценные бумаги и облигации, облігації

2. Read and translate the text: 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 a process of systematically collecting, analyzing, and reporting financial information. The basic product that an accounting firm sells is information needed for clients.

Many people confuse accounting with bookkeeping. In effect, they identify the whole with one of its parts. Actually, bookkeeping is only a part of accounting, the record-making part. Bookkeepers are responsible for recording (or keeping) the financial data that the accounting system processes. To keep books is to record transactions, and a bookkeeper is one who records transactions either on a computer or manually or with a bookkeeping machine. Accounting includes much more than this. The accountant should have the ability to design the accounting system; to analyze and record complex, non-routine transactions; and to analyze and interpret accounting information.

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, returns on investments, 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 that will help those who manage the organization. Accounting information helps managers to 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.