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) talk 10 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) collect information
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?
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