Tapescripts

UNIT I

Focus on Functions

Telephone Conversation 2

Woman Hold the line, please… Yes, can I help you?

Man Is the White and Lowe?

Woman Yes, can I help you?

Man Accounts, please.

Woman S’ ringing.

Man Sorry?

Woman It’s ringing for you…

Man Hello. Hello.

Woman Hello – there’s no need to shout.

Man Well, can’t you hurry things up a bit? I’m a very busy man, and this call is costing me time and money.

Woman Sorry, there’s no reply at the moment. They must all be at lunch.

Man At lunch? I don’t have time for lunch. Can you ask someone to call me back, please, it’s urgent.

Woman What’s it about?

Man My name’s Hobson, from Bond & Hunt. We received a letter from you today concerning the payment which you claim we didn’t make on the 14^th of September last year…

Woman I haven’t got a pen.

Man What?

Woman I haven’t got a pen. Hold on a mo’. There we are.

Man I want to know why someone is sending us these ridiculous letters wasting my time and your time, when the whole thing is clearly so totally inefficient. I really can’t understand what’s going wrong with you people. If this carries on we’ll have to find a completely different supplier.

Woman Err, how do you spell your name Mr. Hobson?

Man Get someone to call me back at once, please.

Woman Hold on, what was the company? Hello? Oh dear, oh dear, you got out of bed on the wrong side this morning, didn’t you …

LISTENING

What Is Accounting?

Accounting contains elements both of science and art. The important thing is that it is not merely a collection of arithmetical techniques but a set of complex processes depending on and prepared for people. The human aspect, which many people, especially accountants, forget, arises because:

1. Most accounting reports of any significance depend, to a greater or lesser extent, on people’s opinions and estimates.

2. Accounting reports are prepared in order to help people make decisions.

3. Accounting reports are based on activities which have been carried out by people.

But what specifically is accounting?

It is very difficult to find a pithy definition that is all-inclusive but we can say that accounting is concerned with:

The provision of information in financial terms that will help in decisions concerning resource allocation, and the preparation of reports in financial terms describing the effects of past resource allocation decisions.

Examples of resource allocation decisions are:

Should an investor buy or sell shares?

Should a bank manager lend more to a firm?

How much tax should a company pay?

Which collective farm should get the extra tractor?

As you can seem accounting is needed in any society requiring resource allocation and its usefulness is not confines to ‘capitalist’ or ‘mixed’ economies.

An accountant is concerned with the provision and interpretation of financial information. He does not, as an accountant, make decisions. Many accountants do of course get directly involved in decision making but when they do they are performing a different function.

Accounting is also concerned with reporting on the effects of past decision. But one should consider whether this is done for its own sake or whether it is done in order to provide information which it is hoped will prove helpful; in current and future decisions., We contend that knowledge of the past is relevant only if it can be used to help in making current and future decisions, for we can hope that we shall be able to influence the future by making appropriate decisions but we cannot redo the past. This measurement of past results is a subsidiary rile, but because of the historical development of accounting, and, perhaps, because of the limitations of the present state of the art, ‘backward looking’ accounting sometimes appears to be an end in itself and not as a means that will help in achieving a more fundamental objective.

UNIT 2

LISTENING

Bookkeeping

The principles of bookkeeping are pretty old. Over 500 years ago the merchants of Northern Italy were already keeping precise accounts, showing what they bought and sold, who they owed money to and who owed them money. And so they always had figures handy to tell them just how successful their business was.

It’s basically the same bookkeeping methods which are still in use today, even if the quill pens have been replaced by modern accounting machines. Today computers help merchants (businessmen) to keep their accounts in order.

Bookkeeping is a method of keeping chronological and systematic record of all business occurrences. It provides information on changes in a company’s assets – what expenditure it has and what its earnings are. What our merchant used to do by hand nowadays computers do automatically. At least they’d do it if they had the appropriate data.

Computers store facts and figures, process them and finally print out a balance sheet, and this shows the company’s business success or lack of it.

A balance sheet has two sides. On one side there are a company’s assets – goods it owns, buildings, machines, and so on. On the other side, there’s information of how it’s financed – its own capital resources, money lent by banks or which it’s still owing to suppliers.

Game of good bookkeeping is to provide a clear picture of the financial state of the company. This calls for stock-taking at least once every year. Everything that’s owned by the company is counted and entered into lists - property and buildings, machinery and furniture, tools and everything else that can be used to manufacture products. All of these belong to company’s fixed assets – these are assets which stay in the company

Everything else runs through and is therefore termed current assets. That includes things like raw materials, packaging, spare parts and so on. And of course it also includes the company’s financial assets – bank balances, bills of exchange, checks with which customers have paid for goods and also cash in hand. Everything is counted up and listed to enable it to be checked against the other side.

And this is the secret of what is called double-entry bookkeeping. For every entry on the one side there must be a balance in entry on the other. On one side are the assets – the fixed assets – buildings, machines, business furnishings, and then the current assets – raw materials, factory supplies, finished products, receivables, bank balances and cash in hand. On the other side, liabilities – equity capital and outside capital, such as mortgages, loans and other liabilities.

With every transaction two entries are needed, hence the term double-entry bookkeeping. All the values added up on the asset side have to balance with the total calculated on the liability side.

These boxes each contain one of the firm’s finished products – a machine. This customer has ordered five of these machines and now he collects them and pays for them in cash. This sales transaction actually has to be recorded, and in double-entry bookkeeping method it will look like this. The 5 machines packed in their boxes will be on the debit side of the merchandise account. The costs of making the machines – let’s say 10,000 marks – are on the credit side .So on both sides of the balance sheet we now have a value of ten thousand marks. And now the five machines are sold but they are not sold for the price it took to make them, of course, because then the firm wouldn’t have any profit. They are sold for 13000 marks – 3000 marks more than the machines cost to make. This is the company’s gross profit. So it appears on the credit side. If the company makes a profit on its goods, the balance sheet total grows accordingly, if it makes a loss the balance sheet total shrinks.

If all of this method is finding how much cash in hand there is, all you have to do is the same as the house wife here. She makes a note of all of her expenditure and subtracts this from the total of her house-keeping money. All that she needs to know is that if she now has enough money left for shopping or not. And to provide an answer, this simple procedure is enough, for the housewife at least.

But a large company just couldn’t manage like this. And that’s why commercial accountancy stands on the double-entry bookkeeping. This type of bookkeeping under which every transaction is recorded on one side according to the allocation of funds and on the other side according to the source of funds is an efficient instrument for financial control in all businesses.

So a method devised by Italian merchants over 500 years ago is still proving its value today. A company’s assets and any changes in them – the origin and development of costs, turnover, corporate planning of its success – all these are made clear with the help of figures. Two are better than one, they say, and here that means that two entries help to avoid errors and provide a clear picture.

UNIT 3

LISTENING

Hello! As Chief Accountant of the company, I am obviously involved in the control of the financial or ‘business side. I’m afraid, my job isn’t the most popular one, and I expect some of the junior managers call me a skinflint or even worse when they think I’m not listening. But unless my department is properly organized and working efficiently, we should all very soon be in a real mess. It’s a complicated job, so I have no fewer than six divisions in my department to cope with it.

Now, if you look at your scheme – in your book, I mean – I’m going to begin with the second slot from the left. We‘ll keep the end one till last, with the one at the other end. So the second slot we’ll call Credit Control. I think you already know what that means. If someone we don’t know orders thousands of pounds worth of goods, we have to make pretty sure he can pay before we supply them. And that, to put it simply, is the job of Credit Control. Next along the line comes Internal Audit – that’s A-U-D-I-T, audit. Do you know what that means? Well, to audit the books means to inspect the financial records to make sure they are in order. We have to do this every year, together with an external auditor, that is, someone from outside the company. So, it’s a big and responsible job, and we make internal checks quite often.

Fourth along the line is the division called Costing – another one that doesn’t make me too popular with some people. It is very tempting for people to introduce splendid new ideas, but very often they don’t realise that they may be letting the company in for a great deal of expense and very little return. So absolutely everything has to be costed before it can be put into effect, and I’m afraid I have to axe quite a lot of pet schemes.

In fact, though, the single most expensive recurring item for any company is almost certainly going to be Wages – which is the name of my fifth division. You hear a lot of talk these days about shaking out, or slimming down, or tightening up, or whatever. They all mean the same thing – cutting down the number of people employed. But it doesn’t really alter the fact that our biggest item of expense is wages.

Right. Well that leaves the first division, which is Financing Accounting and the last one, which is Management Accounting – which I suppose is why they call me an accountant. These are both a bit complicated, unless you have a specialised training in accountancy. But all they really mean is that every single item of expenditure or income, from huge bank loans to petty cash for tea and biscuits, has to be properly recorded and accounted for. So that’s my job!

UNIT 4

LISTENING