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?
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