III. Comprehension and Word Study

1. Give Russian equivalents to the word combinations:

in different branches of the economy; material needs and wants; in a logical manner; recording, classifying and summarizing economic events; financial statements; to handle and present financial information; to monitor revenues and expenditures; balance sheet; at one point of time; income statement; accounting period; to compare one organization to another; to specialize in the field of accounting; to give financial advice; to consider setting up one's own business; to receive (spend) money; to run one's business; legal requirement; to record every single transaction; to provide quantitative information; to make decisions; tax computation; to provide accounting services; to keep proper financial records.

2. Translate into English:

следовать бухгалтерским принципам и правилам; юридическое требование; использовать для принятия решений; регистрировать каждую сделку

(банковскую операцию); обеспечивать количественной информацией; финансовое положение фирмы; поступающие деньги; тщательно отслеживать; финансовый совет; балансовый отчет; калькуляция налогов; специализироваться в бухгалтерском учете; регулировать и представлять финансовую информацию; в данный момент; получать (тратить) деньги; правильно вести финансовые документы.

3. Complete the sentences:

1. Accounting is the process of … .

2. Transactions are summarized in … .

3. Two common financial statements are … .

4. The balance sheet shows … .

5. The income statement shows … .

6. To run your business well you must know … .

7. It is the legal requirement that … .

8. Profit could be described as … .

9. The function of an accountant is … .

4. Translate from Russian into English:

1. Бухгалтерский учет предоставляет данные для кредиторов и вкладчиков.

2. Бухгалтерский учет – это основа для принятия решений.

3. Они готовят отчет о доходах и балансовый отчет в конце года.

4. Мы определяем эффективность производства с помощью анализа
коэффициентов.

5. Мы хотим проверить бухгалтерскую отчетность за данный период.

6. Самое важное в бизнесе – это знать, сколько денег ты потратил и как ты это сделал.

7. Хороший бухгалтер всегда даст тебе финансовый совет.

8. Основная цель бухучета – это регистрация каждой финансовой операции.

Read and translate the following text. Consult a dictionary if necessary.

ACCOUNTING

Accounting shows a financial picture of the firm. An accounting department records and measures the activity of a business. It reports on the effects of the transactions on the firms financial condition. Accounting records give a very important data. It is used by management, stockholders, creditors, independent analysts, banks and government.

Most businesses prepare regularly the two types of records. That is the income statement and balance sheet. These statements show how money was received and spent by the company.

One major tool for the analysis of accounting records is ratio analysis. A ratio analysis is the relationship of two figures. In finance we operate with three main categories of ratios. One ratio deals with profitability, for example, the Return on Investment Ratio. It is used as a measure of a firms operating efficiency.

The second set of ratios deals with assets and liabilities. It helps a company to evaluate its current financial position. The third set of ratios deals with the overall financial structure of the company. It analyses the value of the ownership of the firm.

Comprehension Questions

1. What is the purpose of accounting?

2. Who uses the data provided by accounting firms?

3. What are the two types of records which most businesses prepare?

4. What can you know analyzing the income statement and balance sheet of a company?

5. What is the purpose of the ratio analysis?

6. What categories of ratios in finance do you know?

IV. Intensive Reading Task

Choose the necessary word and put it in the sentence.

1. An accounting helps ... the activity of a business. 1 to profit

2. Do you know the effect of your last ... on financial condition of the firm? 2 profit

3. Accounting records provide ... for stock-holders, independent analysts. 3 efficiency

4. The second type of ratio helps the company ... its current financial position. 4 ownership

5. ... is one the two main records which most of the businesses prepare regularly. 5 to evaluate

6. The ... of the company includes real estate in 6 transaction California.

7. I am sure of the ... of this transaction. 7 data

8. Our company's current ... is very high. 8 income statement

9. They ... from the association with that corporation. 9 to measure

2. Make questions and answer them:

– about the purpose of accounting;

– about the data provided by accounting firms;

– about two common financial statements;

– about the purpose of the ratio analyses;

– how profit could be described;

– about the legal requirement in accounting;

– about the function of an accountant.

Complete the sentences with the words from the box below.

Record, monetary terms, is summarized, accounting reports, are classified, communicating, profitable, users, operating costs, assumption

1. The results of the daily business activities are summarized in

2. One of the functions of an accounting system is to create a systematic ... of the daily business activity, in terms of money.

3. Transactions can be expressed in and be entered in accounting records.

4. Transactions and events into related groups or categories.

5. The classified information .. into accounting reports to meet the information

needs of decision makers.

6. The accounting process also involves ... information to interested parties.

7. From comparison of financial statements we can determine which company is more .. .

8. The persons receiving accounting reports are termed the ... of accounting information.

9. Managers need detailed information about daily

10. The information of reports must be presented in accordance with certain
ground rules and ....

Study the meaning of the words in bold type from the sentences.

1. The money that a business spends in order to produce goods or services is its

Costs.

2. Fixed costsdo not vary in relation to the output level of goods or services; variable costs do.

3. Direct costsare directly related to the things produced. In manufacturing, for example, direct costs include raw materials and wages and indirect costsmay include things like social security charges on top of the wages.

4. Overhead costs or overheadsare used to mean different things, but usually cover all the regular non-production .costs of running a business, such as salaries and telephone bills, and can be extended, for example, to include the cost of marketing and R&D activities.

5. A company's financial performance for a period is its results, which it reports in the form of a profit and lossaccount, indicating whether it has made a profit or a loss.

6. The equivalent document in the US is the income statement.A pre-tax profit or loss is one calculated before tax is taken into account.

7. The accuracy of accounts such as the balance sheetand the profit and loss account is checked and supposedly guaranteed by auditors,outside accountants who specialize in this.

8. When a company's accounts are presented in a way that makes performance look better than it really is, the company may be accused of window dressing or

Creative accounting.

9. The bottom lineis an informal way of talking about the results of a company:
the so-called bottom line of the profit and loss account. The bottom line also
means the final result or the most important aspect of something.

10. Assets and liabilitiesare normally shown on a firm's balance sheet:a “photograph” taken, normally once a year, of its financial situation at that time. Firms in a good situation are said to have a strong balance sheet and those that are not, a weak one.

11. Things that are not shown in the balance sheet but in a footnote, for example, are off-balancesheet.

12. A company's balance sheet may include provisions for potential losses, such as bad debts,debts that may never be paid.

13. If it looks almost certain that a debt will not be paid, it is considered a write­off and written off.

14. A company supplying goods or services to another company does not, of course, usually expect to be paid immediately, but after an agreed period. This is

Trade credit.

15. Amounts that a business is waiting to be paid by its customers are accounts
receivableor receivables.Customers owing money in this way are debtors.

16. Money that a business owes to its suppliers are accounts payable or
payables.Suppliers waiting to be paid are creditors.

17. The cash flowof a business is the actual movement of money into and out of it, independently of how much it owes and is owed.

18. Cash flowis also used to refer exclusively to cash flowing into a company from sales.

19. When sales reach a level where revenues match costs, a company or product

Breaks even.

20. This is break even or the break even point,a crucial figure when calculating
the return on investment (ROI) for a given business or product.

IV. Speaking Practice

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