What is accounting?
1. Accounting has been called “the language of business”. Perhaps a better term is “the language of financial decisions”. The better you understand the language, the better you can manage the financial aspects of living. Personal financing planning, investments, loans, car payments, income taxes, and many other aspects of daily life are based on accounting. A recent survey indicates that business managers believe it is more important for college students to learn accounting than any other subject. Other surveys show that persons trained in accounting and finance make it to the top of their organizations in greater numbers than persons trained in any other field. Indeed, accounting is an important subject.
3. Accounting is the system that measures business activities, processes that information into reports and communicates these findings to decision makers. Financial statements are the documents that report on an individual’s or an organization’s business in monetary amounts.
Is our business making a profit? Should we start up a new line of women’s clothing? Are sales strong enough to warrant opening a new branch outlet? The most intelligent answers to business questions like these use accounting information. Decision makers use the information to develop sound business plans. As new programs affect the business’s activities, accounting takes the company’s financial pulse beat. The cycle continues as the accounting system measures the results of activities and reports the results to decision makers.
4. Bookkeeping is a procedural element of accounting as arithmetic is a procedural element of mathematics. Increasingly, people are using computers to do much of the detailed bookkeeping work at all levels – in households, business, and organizations of all types.
Ответьте на следующие вопросы к тексту:
Why has accounting been called “the language of financial decisions”?
Why is it more important for college students to study accounting and finance?
What are financial statements?
Why accounting information is so necessary for managers (decision-makers)?
What is the difference between accounting and bookkeeping?
Users of Accounting Information
Individuals. People use accounting information in day-to-day affairs to manage their bank accounts, to evaluate job prospects, to make investments, and to decide whether to rent or to buy a house.
Businesses. Managers of businesses use accounting information to set goals for their organizations, to evaluate their progress toward those goals, and to take corrective action if necessary. Decisions based on accounting information may include which building and equipment to purchase, how much merchandise inventory to keep on hand, and how much cash to borrow.
Investors and Creditors. Investors provide the money that businesses need to begin operations. To decide whether to help start a new venture, potential investors evaluate what income they can reasonable expect on their investment. This means analyzing the financial statements of the new business. Those people who do invest monitor the progress of the business by analyzing the company’s financial statements and by keeping up with its developments in the business press, for example, The Wall Street Journal, Business Week, Forbes, and Fortune.
Ответьте на вопросы:
Who are users of accounting information?
Why do they use it?
Read the text and answer the following questions:
How old is accounting?
What century does it date back?
3. When did the main bookkeeping terms appear such as "double entry bookkeeping", "income",
What does the words "debit" and "credit" mean?
When and why were developed more complicated accounting systems?
Why is term "data processing" associated with bookkeeping?
The Development of Accounting Thought
Accounting has a long history. Some scholars claim that writing arose in order to record accounting information. Account records date back to the ancient civilizations of China, Babylonia, Greece, and Egypt. The rulers of these civilizations used accounting to keep track of the cost of labour and materials used in building structures like the great pyramids.
Accounting developed further as a result of the information needs of merchants in the city-states of Italy during the 1440s. In that commercial climate the monk Luca Pacioli, a mathematician and friend of Leonardo da Vinci, published the first known description of double-entry book-keeping in 1494.
The double-entry accounting system - in which for every "debet dare" there is a "debet habere" - has evolved to the point where it is very much like the present day system. Debet dare and debet habere are Latin terms meaning "should give" and "should have" respectively.
The pace of accounting development increased during the Industrial Revolution as the economies of developed countries began to mass-produce goods and increased competition required merchants to adopt more sophisticated accounting systems.
In the 19th century, the growth of corporations, especially those in the railroad and steel industries, spurred the development of accounting. Corporation owners -the stockholders- were no longer the managers of their business. Managers had to create accounting systems to report to the owners how well their businesses were doing.
The role of government has led to still more accounting development. When the federal government started the income tax, accounting supplied the concept of "income". Also, government at all levels has expanded its role in health, education, labour, and economic planning and it required strict accountability and compliance with standards in the business community.
Since the mid—20lh century bookkeeping as an essential part of all accounting systems has been carried out by machines. The introduction of computers broadened the scope of bookkeeping and the term "data processing" now often associates with bookkeeping.
Exercise. Complete the following sentences according to the text.
- Федеральное агентство по образованию
- I. Введение
- Указания по работе с текстами для самостоятельной работы дома (10 тыс. Знаков).
- I семестр Outside Sources of Financing
- Vocabulary
- Short-term financing
- Long-term financing
- 1. Short-term financing is money that will be used for one year or less and then repaid.
- Answer the questions:
- Accounting General definition of accounting
- The basis for the accounting process
- A balance sheet
- An income statement
- The importance of the above two statements
- 1.General definition of accounting
- 2. The basis for the accounting process
- 3. A balance sheet
- 4. An income statement
- 5. The importance of the above two statements
- Answer the questions:
- In other words, the management is the process of coordinating the resources of an organization to achieve the primary organizational goals.
- Questions to the text:
- Forms of business in the usa Active vocabulary
- Questions to the text:
- Is the record-keeping and report-filing so necessary for sole traders in the usa?
- Forms of Business Ownership Active vocabulary
- III семестр Text 1. Currency and Other Forms of Exchange
- In which two ways might a creditor who needed the money dispose of a Bill? Text 2. Depositing Money with a Bank
- Questions on the text
- In what circumstances an overdraft on current account is permissible?
- Text 4. Bank Investments
- In general the banks do not lend to industry for long periods of time or for investment projects. They regard themselves as providing working capital rather than fixed capital.
- Assets and Liabilities
- Bookkeeping as Part of Accounting Cycle Active vocabulary
- Accounting Information Active vocabulary
- Questions to the text:
- Специальность мен, гму IV семестр (6-летки) the manager's role /3 000 3hak0b/
- Decision-making /4 000 знаков/
- In carrying out management functions, such as planning, organizing motivating and controlling, a manager will be continually making decisions. Decision-making is a key management responsibility.
- Traditional economies
- Market economies
- 2. Freedom of choice and enterprise.
- 4. Competition.
- 5. Markets and prices.
- Command Economies
- Mixed Economies
- Notes to the text:
- Inflow (out flow) приток (отлив, отток)
- If the company is doing badly and the shareholders sell their shares they get…
- If there is a regular inflow of receipts from sales and regular outflow of payment for expenses … corporate finance
- Notes to the text:
- Interest on bond has to be paid out …
- Why finance?
- I. Ответьте на следующие вопросы к тексту:
- In financing business operation, a company relies almost entirely on short-term financing.
- The Balance Sheet
- What is accounting?
- In 1440s they were ... Who developed accounting further as a result of information needs.
- In the 19th century managers had to develop accounting systems ...
- Accounting
- Notes to the text
- Vocabulary Exercise
- Bookkeepers, accountants and controllers
- Notes to the text:
- Auditor and their report
- Notes to the text:
- Sole Proprietorship
- Corporation
- Large Corporations in the usa
- Corporate Finance
- What Special Problems Face Small Business
- Starting-up Financing
- 3 Семестр additional material banks and financial intermediaries
- In the form of checking accounts, savings accounts, or other types of bank deposits.
- Commercial banking
- Types of banks
- Bank of england
- Additional Material
- 4 Семестр managing in future
- Financial statements
- Bookkeping
- What is accounting
- The development of accounting thought
- The profession of an accountant in the usa
- Accounting industry in the usa
- Bookkepping as part of accounting
- Modern accounting system
- 1. Goods and services
- 2. Resources
- 3. Households
- 4. Markets
- The role of government
- The role of government (to be continued)
- The mixed economy
- In a mixed economy the government may also be a producer of private goods such as steel or motor cars. Examples of this in the uk include nationalized industries such as steel and coal.
- Can inflation be beneficial?
- Market Economy (1400)
- Mixed Economies (500)
- Содержание: