UNIT
THREE
READING
ACCOUNTING
Accounting
is the process of recording, classifying, analyzing, summarizing, reporting and
interpreting the financial information of an organization for use in decision
making. Accountants record, report and interpret financial information that
describes the status and operations of a company aids in decision making. Like
statistics, accounting is the language of business. It provides information to
both people inside and outside the company.
Inside
the company, managers are the major users of accounting information. Accounting
data are used by managers to help them plan and control business operations.
Outside the company, stockholders, bankers, potential investors, and
government, etc. are interested to know the financial position of the company.
For instance, bankers can base their decision on granting a loan to the company
by examining it’s financial statements. Government needs to know the financial
data of the company for tax assessment.
Accounting
is not the same as bookkeeping. Bookkeeping is chiefly the clerical phase of
accounting. Bookkeepers are responsible for the systematic recording of a
company’s financial transactions. They provide data to be used by accountants.
Accounting covers a much wider scope. Accountants are responsible for
developing systems to classify and summarize transactions and for interpreting
financial statements. Accountants are decision makers, while bookkeepers are
trained in mostly mechanical task of record keeping. Accountants may hold
positions as executives in many large companies and top-level government
offices.
There
are three important financial statements prepared by accountants. The first one
is the balance sheet that shows the financial position of a company of a
particular date. The second one is the income statement or profit and loss
statement that shows the profitability of unprofitability of a company during a
period of time. The third one is the capital statement that reports the equity
or money invested by owners. It is also called the owner’s equity. Accountants
usually prepare financial statements once a year.
A. Answer
the following questions briefly
1. What is accounting?
Accounting is the process of recording, classifying, analyzing,
summarizing, reporting and interpreting the financial information of an
organization for use in decision making.
2. Who prepares financial statement?
Accountant.
3. Is accounting the language of business?
Yes, it is.
4. What does a balance sheet contain?
It contains about financial position of a company of a
particular date.
5. Who uses accounting data?
Accounting data are used by managers, company, stockholders,
bankers, potential investors, and government, etc.
6. What are the differences between a bookkeeper and an
accountant?
Accountants are decision makers, while bookkeepers are trained
in mostly mechanical task of record keeping.
7. Do bookkeepers and accountants have the same function?
No, they don’t.
8. How many financial statements are prepared by accountants?
Three financial statements. The first one is the balance sheet,
the second one is the income statement, the third one is the capital statement.
9. Is accounting the same as bookkeeping?
No, it’s not.
10. Are
accountants responsible for the systematic recording of a company’s financial
transactions?
No, they aren’t.
B. Exercise
1
Choose
the correct form of be (am, is, are) to fill the blanks.
1. Julia are absent
from class today.
2. We are both
students.
3. The weather today is good.
4. The sky is clear.
5. Henry and John are brothers.
6. The children are happy.
7. She and I are cousins.
8. Mina is a business woman.
9. The police on the corner is busy
with the traffic.
10. The
workers are very busy.
C. Exercise
2
Give
the correct form of the present tense for the verbs in parentheses.
1. She reads the
newspaper every day.
2. We come to
school by bus.
3. Helen works very hard.
4. The dog chases the
cat all around the house.
5. Gene generally sits at
this desk.
6. Pat goes there
twice a week.
7. Herbert does the work of two people.
8. George always tries to
do the same thing.
9. The teacher wishes to
speak to you.
10. Mr. Walker teaches English
and Mathematics.
11. We watch television every night.
12. The
sun rises in the east
and sets in the west.
13. The
father watches the children in the park.
14. She kisses her daughter before she leaves home.
15. I
often catch cold.
16. Helen
also catches cold very often.
17. She does all
the work.
18. Mary carries the books in a briefcase every
day.
19. He likes studying accounting.
20. The
man has two new cars.
D. Exercise
3
Change
the subjects of the sentences below to she and use the correct form of the
verb.
She starts work at
09.30 and leaves at 17.30. She has an
hour for lunch. She types for about one and a half
hours every morning and about an hour in the afternoon.
She does the
filing about half an hour a day and spend the same amount of
time talking shorthand. Making tea or coffee takes about a quarter of an hour
and she does it
twice a day. She spends about
an hour and a half on the phone. The rest of time she spends doing other things
such as talking to people, opening the mail, reading newspaper etc.
E. Exercise
4
Put
the verbs in the brackets into the correct form.
James
smith (be) is my name. I (work) work in
the main office of a big company. Twenty people(work) work in
that office everyday. Mr. Steward (be) is my boss.
He (work) works very hard. Almost
everyone (work) works hard. Of course a few
people (not work) aren’t work hard.
Mr.
Steward (have) has a private office. He
also (have) has a secretary. Miss Green (be) is his
secretary. She (help) helps Mr. Steward. She doesn’t help
me. I (not have) do not have a private office, But
I (have) have my own secretary. My
secretary (be) is Mary Brown.
Mr.
Steward (meet) meets all of the important visitors.
I (not meet) do not meet visitors. Miss Green(not
meet) does not meet visitors either, Mr.
Steward (talk) talks to visitors. I
occasionally (talk) talk10 visitors too. But I (not
send) do not send usually talk to visitors.
Mr
Steward (write) writes many letters every day.
He (send) sends many letters to
customers I (send)send letters to other compantes. But
I (not send) do not send letters to customers.
I
often (study) study statistics. Then I (write) write reports
for Mr Steward. He (study) studies the reports carefully.
I (get) get the statistics from my assistants.
I (have) have two assistants. Susan and Sandra.
They (help) help me very much. They (not
write) do not write letters. They (collect) collectinformation
from other people. Then they (give) give the information
to my secretary. She (collect)collects information from other
people too. Then she (give) gives the information to me.
My
secretary (not write) do not write reports But
she (write) writes my letters for me. She
also(open) opens my mail. She (read) reads the
mail carefully. She (give) gives me the important
letters.
She (not give) do not
give me the other letters. My secretary (answer) answers the
other letters.
F. Exercise 5
Write do or does in
the blank space in each sentence.
1. Do the students study hard every day?
2. Does Mr
Brown go to his office every day?
3. Do you want cream and sugar in
your coffee?
4. Do the children qo to bed very
early?
5. Does that
girl come from Dominica?
6. Do you know that German student?
7. Does Miss
Green prefer coffee or tea?
8. Do your English lessons seem very
difficult?
9. Do you have a good english dictionary?
10. Does Mr Howard teach English or Science?
11. Do the Jhonsons watch televiston every night?
12. Do Jhonson and Brett work in the same office?
13. Does Henny write reports for her boss every day?
14. Do those two women understand that lesson?
15. Does an accountant prepare financial statement every month?
G. Exercise
1
Fill
in the blank with a/an or leave the space empty.
1. Jim goes everywhere by bike. He hasn’t got a car.
2. Ann was listening to music when i arrived.
3. We went to a very nice restaurant last
weekend.
4. I clean my teeth with a toothpaste.
5. I use a toothbrush to clean my teeth.
6. Can you tell me if there’s a bank near
here?
7. My brother works for an insurance company
in london.
8. I don’t like violence.
9. We need petrol. I hope we come to a petrol
station soon.
10. Liz
doesn’t usually wear jewelry but yesterday she was wearing a necklace.
H. Exercise
2
Put
in a/an, some, a little where necessary. If no words is
necessary, leave the space empty.
1. I’ve seen some good films recently.
2. What’s wrong with you? Have you got a headache?
3. I know a lot of people. Most of them are students.
4. When i was a child, I used to be very shy.
5. Would you like to be an actor?
6. Do you collect stamps?
7. What a beautiful garden!
8. a little birds,
for example penguin, cannot fly.
9. I’ve been walking for three hours. I’ve got sore feet.
10. I don’t
feel very well this morning. I’ve got a sore throat.
11. Those are
nice shoes. Where did you get them?
12. I’m going
shopping. I want to buy new shoes.
13. You
need a visa to visit some countries.
14. Jane
is a teacher. Her parents were teachers too.
15. Do you
enjoy going to concerts?
16. When we
got to the city centre a little shops were still open.
17. I don’t
believe him. He is a liar. He’s always telling lies.
18. He
is a famous accountant in this city.
19. Bring me
paint and a good brush.
20. Can you
lend me some money?
