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.
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?
