Comprehension

Mark the true (T) and false (F) statements.

1. Accounting is not required for non-profit organizations.

2. The double-entry system serves the basis for the modern accounting.

3. Economic decision-making of managers is tightly linked to accounting.

4. Managerial accounting provides information for potential investors.

5. The most important financial statements are published by auditors.

6. Bookkeeping in medium sized firms is primarily mental activity.

7. Fiscal year is the official name for the time period for which the financial statements are prepared.

8. The cash flow statement reflects from what sources cash has come into the business and on what the cash has been spent.

9. The IT advances generate both new opportunities and new requirements for accounting and accountants.

Language practice

 Ex. 1. Match the verbs in the right-hand column with the nouns in the left-hand column.

1.	to generate	a.	expenses
2.	to incur	b.	revenue
3.	to publish	c.	a profit
4.	to enter	d.	items
5.	to categorize	e.	a transaction
6.	to yield	f.	data

 Ex. 2. Match the words and word combinations given in the box with the following groups of verbs.

resources, accounting information, financial statements, profitability, transactions

1. to analyze, to accumulate, to report, to interpret, to process to generate

2. to record, to post, to enter

3. to generate, to prepare, to publish, to present (intr.), to report (intr.), to show (intr.), to reflect (int.)

4. to use to provide, to limit

5. to analyze, to appraise, to reach

 Ex. 3. Look through this excerpt and then fill in the spaces with the words from the box. Make the necessary changes. Translate the text into Russian

individual, present, prepare, statement, asset, report, position, transaction

In consolidation the ___(1)___ mechanism is the entire group and not the separate companies. Consolidated financial___(2)___ brings together all ___(3)___, liabilities and operating accounts of a parent company and its subsidiaries. It ___(4)___ the financial ___(5)___ and results of operations of the parent company and its subsidiaries as if the group were a single company with one or more branches. The technique for ___(6)___ consolidated financial statements is to take the ___(7)___ statements to be consolidated and to combine them on a worksheet after eliminating all intercompany ___(8)___ and intercompany relationships

Discussion

1. What are the nature, principles and scope of accounting?

2. Prove that accounting is “the language of business”. Give your examples.

3. What are the nature, scope and purposes of financial statements?

4. How does accounting information affect the decisions of outside and inside users?

5. What is the work of accountants? What changes is it undergoing?

6. What qualities does the profession of an accountant require? Would you like to pursue a career in accounting? Why?

7. If you are not going to concentrate in bookkeeping or accounting, how will the knowledge of these and the related subjects enhance your overall professional skills and employment potential?

Part B

deposit, invest, investment, share, cash, broker, transaction

On the train down to the university city he thought about Stephen Bradley, who had been a friend in his Harvard days and had generously helped David and other students in mathematics classes that year. Stephen, now a visiting Fellow at Magdalen College, was undoubtedly one of the most brilliant scholars of David's generation. He had won the Kennedy Memorial Scholarship to Harvard and later in 1970 the Wister Prize for Mathematics, the most soughtafter award in the mathematical faculty. Although in monetary terms this award was a derisory $80 and a medal, it was the reputation and job offers it brought with it that made the competition so keen. Stephen had won it with consummate ease and nobody was surprised when he was successful in his application for a Fellowship at Oxford. He was now in his third year of research at Magdalen. His papers on Boolean algebra appeared at short intervals in the Proceedings of the London Mathematical Society, and it had just been announced that he had been elected to a Chair in Mathematics back at his alma matter, Harvard, to commence in the fall.

The 6.15 train from Paddington arrived in Oxford an hour later and the short taxi ride from the station down New College Lane brought him to Magdalen at 7.30. One of the College porters escorted David to Stephen's rooms, which were spacious, ancient, and comfortably cluttered with books, cushions and prints. How unlike the antiseptic walls of Harvard, thought David. Stephen was there to greet him. He didn't seem to have changed one iota. His suit seemed to hang off his tall, thin, ungainly body; no tailor would ever have employed him as a dummy. His heavy eyebrows protruded over his out-of-date round-rimmed spectacles, which he almost seemed to hide behind in his shyness. He ambled over to David and welcomed him, one minute, an old man, the next younger than his thirty years. Stephen poured David a Jack Daniels and they settled down to chat. Although Stephen never looked upon David as a close friend at Harvard, he had enjoyed coaching him and always found him eager to learn; besides, he always welcomed an excuse to entertain Americans at Oxford.

"It's been a memorable three years, David," said Stephen, pouring him a second drink. "The only sad event was the death of my father last winter. He took such an interest in my life at Oxford and gave my academic work so much support. He's left me rather well off, actually. Bath plugs were obviously more in demand than I realized. You might be kind enough to advise me on how to invest some of the money, because at the moment it's just sitting on deposit in the bank. I never seem to have the time to do anything about it, and when it comes to investments I haven't a clue."

That started David off about his demanding new job with Prospecta Oil.

"Why don't you invest your money in my company, Stephen? We've had a fantastic strike in the North Sea, and when they announce it the shares are going to go through the roof. The whole operation would only take a month or so and you could make the killing of a lifetime. I only wish I had some of my own money to put into it." "Have you had the full details of the strike?" "No, but I've seen the geologist's report, and that makes pretty good reading. The shares are already going up fast and I'm convinced they'll reach $20. The problem is that time is already running out."

Stephen glanced at the geologist's report, thinking he would study it carefully later.

"How does one go about an investment of this sort?" he asked. "Well, you find a respectable stockbroker, buy as many shares as you can afford and then wait for the strike to be announced. I'll keep you informed on how things are going and advise you when I feel is the best time to sell."

"That would be extremely thoughtful of you, David." "It's the least I can do after all the help you gave me with maths at Harvard."

"Oh, that was nothing. Let's go and have some dinner." Stephen led David to the college dining hall, an oblong, oak-panelled room covered in pictures of past Presidents of Magdalen, bishops and academics. The long wooden tables at which the undergraduates were eating filled the body of the hall, but Stephen shuffled up to the High Table and offered David a more comfortable seat. The students were a noisy, enthusiastic bunch — Stephen didn't notice them, but David was enjoying the whole experience.

The seven-course meal was formidable and David wondered how Stephen kept so thin with such daily temptations. When they reached the port, Stephen suggested they return to his rooms rather than join the crusty old dons in the Senior Common Room.

Late into the night, over the rubicund Magdalen port, they talked about North Sea oil and Boolean algebra, each admiring the other for his mastery of his subject. Stephen, like most academics, was fairly credulous outside the bounds of his own discipline. He began to think that an investment in Prospecta Oil would be a very astute move on his part.

In the morning, they strolled down Addison's Walk near Magdalen Bridge, where the grass grows green and lush by the Cherwell. Reluctantly, David caught a taxi at 9.45 leaving Magdalen behind him and passing New College, Trinity, Balliol and finally Worcester, where he saw scrawled across the college wall, "c'est magnifique mais ce n'est pas la gare". He caught the 10.00 a.m. train back to London. He had enjoyed his stay at Oxford and hoped he had been able to "help his old Harvard friend, who had done so much for him in the past.

"Good Morning, David."

"Good morning, Bernie. I thought I ought to let you know I spent the evening with a friend at Oxford, and he may invest some money in the company. It might be as much as $250,000."

"That's fine, David, keep up the good work. You're doing a great job."

Silverman showed no surprise at David's news, but once back in his own office he picked up the red telephone.

"Harvey?"

"Yes."

"Kesler seems to have been the right choice. He may have talked a friend of his into investing $250,000 in the company."

"Good. Now listen carefully. Brief my broker to put 40,000 shares on the market at just over $6 a share. If Kesler's friend does decide to invest in the company, mine will be the only large block of shares immediately available."

After a further day's consideration, Stephen noticed that the shares of Prospecta Oil moved from £2.75 to £3.05 and decided the time had come to invest in what he was now convinced must be a winner. He trusted David, and had been impressed by the glossy geologist's report. He rang Kitcat & Aitken, a firm of stockbrokers in the City, and instructed them to buy $250,000-worth of shares in Prospecta Oil. Harvey Metcalfe's broker released 40,000 shares when Stephen's request came on to the floor of the stock exchange and the transaction was quickly completed. Stephen's purchase price was £3.10.

After investing his father's inheritance, Stephen spent the next few days happily watching the shares climb to £3.50, even before the expected announcement. Though Stephen didn't realise it, it was his own investment that had caused the shares to rise. He began to wonder what he would spend the profit on even before he had realised it. He decided not to cash in immediately, but hold on; David thought the shares would reach $20, and in any case he had promised to tell him when to sell.

Meanwhile, Harvey Metcalfe began to release a few more shares on to the market, because of the interest created by Stephen's investment. He was beginning to agree with Silverman that David Kesler, young, honest, and with all the enthusiasm of a man in his first appointment, had been an excellent choice. It was not the first time Harvey had used this ploy, keeping himself well away from the action while placing the responsibility on inexperienced, innocent shoulders.

At the same time, Richard Elliott, acting as the company spokesman, leaked stories to the press about large buyers "coming into the market, which in itself occasioned a flood of small investors and kept the price steady.

	NOTES
		Harvard — American university at Cambridge, Massachusetts;
		a Fellowship at Oxford — a learned society at Oxford;
		the Proceedings of the London Mathematical society — the records of the activities of the London mathematical society;
		Chair in mathematics—position of a professor of mathematics;
		a don — a teacher, member of a university staff;
		an academic—a university teacher.
	VOCABULARY NOTES
		deposit
		to sit on deposit in the bank — (зд.) быть на срочном вкладе в банке
		a deposit account — срочный вклад; депозитный счет
		to place money on deposit — вносить деньги в депозит
		bank deposit — срочный вклад
		invest, investment
		to invest some money in a company — вкладывать деньги в компанию
		syn. to put some money into a company
		an investment in — инвестирование, помещение капитала в...
		to talk smb into investing $250,000 in the company — уговорить кого-то вложить $250,000 в компанию
		to go about (an investment) — приступать к (инвестированию)
		share
		to go up (down) fast (about shares) — быстро повышаться, снижаться (о цене на акцию на бирже)
		syn. to be up (down)
		to reach $20 (about shares) — достичь $20 (о цене на акцию)
		to move from ... to (about shares) —изменяться с ... до ... (о цене на акцию)
		to climb to £3.50 (about shares) — повышаться до £3.50 (о цене на акцию)
		to release shares on the market — выпускать акции в продажу
		syn. to put shares on the market
		a block of shares — пакет акций
		cash
		to cash in — произвести окончательный расчет
		to cash out — оплачивать наличными
		to cash on — зарабатывать на чем-то наличные
		broker
		to brief a broker — дать поручение (инструкцию) брокеру
		transaction
		to complete a transaction — закончить сделку
		cash transaction — сделка за наличный расчет
		transaction account — счет сделки
	WORD-COMBINATIONS
		in monetary terms — в денежном выражении (in terms of money)
		not to change one iota — ни на йоту не измениться
		make the killing of a lifetime — неожиданно заработать (получить) большую сумму денег
		buy $250,000 worth of shares — купить акций на $250,000
		keep oneself well away from action — держаться на почтительном расстоянии от событий
		time is running out — время уходит ...

■ Ex. I. Answer the following comprehension and problem questions based on the text:

Comprehension questions

1. Why did David Kesler set out for Oxford?

2. How did Stephen Bradley strike him?

3. How did David express his gratitude for Stephen's generous help in their Harvard days?

4. Did David act out of gratitude and respect for Stephen or did he pursue his own interests?

5. Did Silverman approve of David's having talked Stephen Bradley into investing $250,000 in Prospecta Oil?

What was his reaction to the news?

6. What instructions did Harvey Metcalfe give to Silverman?

7. Why did the shares in Prospecta Oil go up?

8. How did further events unfold?

Problem questions

1. Why do you think the author takes the reader back to David Kesler's University days?

2. What are the implications of Bernie Silverman's words, "Kesler seems to have been the right choice"?

3. Why do you think Harvey Metcalfe preferred to keep himself away from the action?

What do you make of his plan?

4. Would you say that David Kesler fell a victim to a group of dishonest people? Bear out your statement.

5. Do you agree that a feeling of David's fighting a losing battle runs through the chapter?

■ Ex II. Role play. Enact the talk between Silverman and David Kesler right after David's return from Oxford. Make the most of the text.

David Kesler. You greet Mr. Silverman respectfully, inform him of the outcomes of your travel to Oxford and about Stephen Bradley's firm decision to invest $250,000 in Prospecta Oil. "You tell Bernie that you feel obliged to Stephen for his generous help but stress that when it comes to business personal relations don't mean much to you. You feel proud of yourself but you don't feel like showing it and do your best to come across as businesslike, reserved and very much concerned about the project.

Make use of the following helpful phrases

to open the conversation:

If you would allow me to ...

I think I ought to say that ...

It's hardly necessary for me to say that ...

to express indifference:

It doesn't matter to me ...

Who cares ..?

It makes no difference to me ...

to express certainty:

Yes, certainly.

No, certainly not.

It is out of the question.

to express intention:

I intend to ...

I plan to ...

to express necessity:

Do I need to ..?

Do I have to ..?

to take one's leave:

Good-bye for now.

I am afraid I must be going.

Silverman. The news has given you a surprise, you are not in a position to evaluate its impact but you're not sure it is going to change Harvey Metcalfe's plan. You don't feel like bringing your agitation into the open and do your utmost to remain indifferent, businesslike. You ask Danny relevant questions to clarify the matter. You seem to be very official, indifferent. Thank Danny for his work in a reserved manner, advise him to keep up the good work for the go-ahead company.

Make use of the following helpful phrases

to keep up the conversation:

Is there anything the matter ..?

Judging by the look of your face ...

to ask for clarification:

I'd like some details about ...

Could you make me clear on ...

I'm afraid I need to know ...

to express indifference:

Is that so?

I can't say I believe that ...

I couldn't care less ...

to compliment:

Splendid, that’s rather a wise idea.

I think it is wise ...

It sounds promising ...

to approve (to express approval):

You couldn't have done it better.

I agree with you there.

to advise:

I think you should ...

It would be possible to ...

■ Ex. III. Role play. Enact an imaginary telephone talk between Harvey Metcalfe and Silverman. Make the most of the text.

Silverman. You feel agitated, rush towards your desk, pick up the red telephone and dial several well-known digits. A prolonged buzzing is heard and Harvey Metcalfe answers the phone by the third ring. Try to sound natural, suppress your excitement and inform Harvey Metcalfe of what you have come to know, find out what in his opinion it may entail, support Harvey Metcalfe’s plan, try to convince Harvey Metcalfe that you've got the feel of the moment, come up with your recommendations, try to evaluate the consequences.

Make use of the following helpful phrases

to start the telephone conversation:

Hello! Bernie speaking.

Hello! That you, Harvey?

Bernie speaking. Say ...

to keep up the conversation:

I cannot make out what you are saying.

Can you hear me any better now?

Don't hung up; don't ring off.

Shall I hold the line or will you call me back?

to apologize:

I'm sorry to trouble you (Sorry for troubling you).

Excuse me for troubling you.

I'm sorry to bother you.

to express opinion:

What do you think of (about) ..?

I would like to say that ...

I think we have to consider that ...

to express surprise:

It's too astonishing for words.

I feel I should point out to you that ...

I am stuck for the right word ...

to suggest:

It may boil down to ...

I am inclined to think that ...

What would you think of...

to ask for clarification:

I wonder if...

If it comes out that ...

Can I take it as ..?

to say good-buy:

Well, so long.

I'll phone you tonight.

Harvey Metcalfe. You are looking through the Wall Street Journal, the telephone rings, you tear yourself away from the daily chart of the average movements and answer the phone reluctantly. The voice on the other side is hoarse and excited. You hardly make out who is calling, at last you recognize Silverman, listen to the news, size up and grade the news, come up with a plan, brief Bernie on it and give your instructions. You come across as self-confident, self-possessed, resolute and categorical.

Make use of the following helpful phrases

to answer the phone:

Hello! Nice to hear from you.

Who is it speaking?

Can you talk a little louder?

Is there anything urgent?

Go ahead!

So what?

to express annoyance:

Keep your advice to yourself.

I don't hear you. Can you call me back?

Can you keep silent for a moment?

to express approval:

Excellent!

Splendid!

Good!

Very wise of you.

to express opinion:

I take it that ...

I believe that ...

I think that ...

Presumably ...

to express warning:

Mind you don't ...

You'd better ...

Take my word for it ...

to give instructions:

See to it that ...

Without fail ...

■ Ex. IV. Make up a 250-word article for a financial news page. Comment on the fluctuation of the Prospecta Oil shares on the exchange. Entitle it.

■ Ex. V. Sum up the acquired information about Harvey Metcalfe and his broker's dealing on the exchange.

■ Ex. VI. Comment on the events and facts presented in the text as if you were:

1. Richard Elliott, the company spokesman;

2. a broker from Kitcat and Aitken;

3. Harvey Metcalfe's broker.

Unit VII

Part А