Fill in the gaps with prepositions:

1. Accountants frequently refer _____ a business organizations as an accounting entity.
2. Transactions lead _____ an outflow of money.
3. The users rely _____ relevant financial statements.
4. Accountants provide information needed _____ external users.
5. Business activities are limited _____ transactions.

 

5.Give definitions to the following terms:

 

ü Audit

ü Operational audit

ü Compliance audit

ü Financial statement

 

    

PART II

READING PLUS

THE FIRST- YEAR

AUTUMN TERM

 

TEXT 1

1. Read the text and answer the questions:

ü What do you know about accounting?

ü How old is it?

ü What century does it date back?

ü When you hear the word ‘accountant’, what kind of work do you draw in your mind?

 

HISTORY OF ACCOUNTING

 

      Accountinghas 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.

     Accounting has a long history. Some scholars claim that writing arose in order to record accounting information. Account records date back to the ancient civilisations of China, Babylonia, Greece, and Egypt. The rulers of these civilisations 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 1400s. In that commer­cial climate the monk Luca Pacioli, a mathematician and friend of Leonar­do da Vinci, published the first known description of double-entry book­keeping in 1494.

      The pace of accounting development increased during the Industri­al Revolution as the economies of developed countries began to mass-produce goods. Until that time, merchandise had been priced based on managers' hunches about cost, but increased competition required mer­chants to adopt more sophisticated accounting systems.

       In the nineteenth 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 necessarily 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 develop­ments. When the federal government started the income tax, accounting supplied the concept of “income”. Also, government at all levels has assumed expanded roles in health, education, labour, and economic planning. To ensure that the information that it uses to make decisions is reliable, the government has required strict accountability and compli­ance with standards in the business community.

Notes to the text:

Claim - утверждать, стверджувати

To keep track – прослеживать, простежувати

Pace – темпы развития, темпи розвитку

Hunch – представление, уявлення

To spur – подгонять, підганяти

 

TEXT 2

 

1. Read and translate the text:

 

SPECIAL TERMS

Liability: An obligation that is owed by an organization: debts to other organizations for merchandise or services; wages owed to employees; accrued (owed but not yet paid) taxes; and payments due on loans or mortgages.

Capital: The investment in an organization or business by its owner or owners. Other terms often used instead of capital are owners’ equity, often abbreviated OE, and proprietorship.

Account: A record of the changes and balances in the value of an individual item listed in the ledger of an organization. An example of an asset account is the company’s furniture and fixtures, usually listed as one item since it would be impractical to list every desk and chair. Each account, usually abbreviated a/c, frequently has its own page in the organization’s ledger

Double-entry: A method of bookkeeping in which the twofold effect of every entry is recorded, thus requiring two entries to record each transaction. By recording both effects of each transaction, this system offers protection against error.

Single-entry: Any bookkeeping system that does not include the complete results of each transaction. It is usually used by small companies or to keep track of specific accounts: for example, a checkbook which only keeps a record of the cash balance.

Debit: An amount entered on the left-hand side of an account. Asset and expense accounts are increased by debiting, that is, by entering amounts in the left-hand column. Debit is usually abbreviated DR.

Credit: An amount entered on the right-hand side of an account. Liability, capital, and income accounts are increased by crediting, that is, by entering amounts in the right-hand column. Credit is usually abbreviated CR.

Journal: A book in which transactions are recorded. In double-entry bookkeeping, both sides of the transaction – both the credit and the debit side – are entered in the journal.

Ledger: A listing of detailed accounts, such as a record comprising the accounts receivable of each customer. The general ledger is the book used to list all the accounts of an organization. Entries from all the jour­nals are transferred to the ledger at regular intervals, usually monthly. This process is called posting. The ledger then serves as a summary of all the fiscal activity for that period.

To Foot: To add or total the amounts in a column.

Trial Balance: When all the transactions for a certain period have been posted and footed, the debits should equal the credits. The test to see if this is so is called a trial balance.

 

Notes to the text:

Twofold effect - двойное действие (влияние), подвійна дія (вплив)

Trial balance – предварительный (проверочный) баланс, попередній (перевірочний) баланс