THE ACCOUNTING IN BUSINESS

Accounting is often said to be the language of business. It is used in the business world to describe the transaction entered into by all kinds of organizations. Accounting terms and ideas are therefore used by people associated with business, whether they are managers, owners, investors, bankers, lawyers or accountants. Accounting is only concerned with those facts that can be measured in monetary terms with a fair degree of objectivity. This means that accounting can never show the whole of the information needed to give you a full picture of the state of the business.

The actual record-making phase of accounting is usually called book-keeping. However, accounting extends far beyond the actual-making of records. Accounting is concerned not only with the recording of transactions but their classifying, analysing, summarizing and interpreting of records. An accountant should be concerned with more than the record-making phase. In particular he should be interested in the relationship between the financial results and the events which have created them. He should be studying the various alternatives open to the business and be using his accounting experience in order to aid the management to select the best plan of action for the business. The owners and managers of a business, investors and others will need some accounting knowledge in order that they may read and understand the financial statements issued by the business and adjust their relationships with the business accordingly.

Probably, there are two main questions that the managers or owners of a business want to know: first, whether or not the business is operating at a profit: second, they will wants to know whether or not the business will be able to meet its commitments and so have not to close down owing to lack of funds. Both of these questions should be answered by the use of the accounting data of the firm.

People associated with business should know the accounting terms such as assets, liabilities and capital.

1.The resources possessed by the firm are known as assets. Assets consist of property of all kinds such as buildings, machinery, stocks of goods and motor vehicles also benefits such as debts owing by customers and the amount of money in the bank account.

2.The indebtedness of the firm for these resources is known as Liabilities. Liabilities consist of money owing for goods supplied to the firm and for expenses and for loans made to the firm.

3.The total amount supplied by the owner of the business is known as Capital. Capital is often called the owner’ s equity or net worth. The capital of the owner is increased (with) by net profit.

The basic structure of accounting records.

All the book-keeping records written in one book are called the Ledger. The ledger would be divided into four different books and each book would be for a specific purpose or function. The functions could be:

1.One book just for customers’ personal accounts. It is called the Sales Ledger.

2.Another book just for suppliers’ personal accounts. It is called the Purchases Ledger or bought Ledger.

3.A book concerned with the receiving and paying out of money both by cash and cheque. It is called a Cash Book.

4.The remaining accounts are contained in a Ledger which is called a General Ledger or a Nominal Ledger.

These ledges all contain accounts.

To save the General Ledger from being overloaded with details four new books were started for credit transactions only.

One book is for credit sales (the Sales Journal, another book for credit purchases (the Purchases Journal), the third book for returns inwards (the Returns Inwards Journal), and the fourth book for returns outwards (the Returns Outwards Journal).

Trading and Profit and Loss Account.

Probably, the main objective of the Accounting function is the calculation of the profits earned by a business or the losses incurred by it. The earning of profit is after all usually the main reason why the business was set up in the first place and the proprietor will want to know for various reasons how much profit has been made. He may also want to know his profits for such diverse reasons as: to assist him to plan ahead, to help him obtain a loan from a bank or from a private individual, to show to a prospective partner or to a person to whom he hopes to sell the business or may be he will need to know his profits for income tax purposes. In the case of a trader who is mainly concerned with buying and selling, the profits are calculated by drawing up a special account called a Trading and Profit and Loss Account. Undoubtedly, one of the most important uses of the Trading and Profit and Loss Account is comparing the results obtained with the results expected.

The accounting equation is expressed in a financial position statement which is drawn up after the trading and profit and loss accounts have been completed. This statement is called a Balance Sheet. The trading and profit and loss account and balance sheets are drawn up so as to be of benefit to the owner of the business. Trading and Profit and Loss Accounts are multi-purpose documents.

NOTES:

accounting – бухгалтерский учет;

an accountant = a book keeper - бухгалтер;

a book-keeping –бухгалтерия;

to describe the transactions entered into by all kinds of organisation – для описания сделок

между различными организациями;

accounting terms and ideas – термины и понятия бухгалтерского учета;

accounting is only concerned with those facts that can be measured in

monetary terms – бухгалтерский учет оперирует только теми фактами, которые поддаются

оценке в денежном выражении;

the actual record-making phase of accounting – ведение бухгалтерских записей;

accounting extends far beyond the actual record-making – бух. учет выходит далеко за рамки

простой регистрации;

recording of transaction – запись операций;

summerizing – обобщение;

interpreting –интерпретация, разъяснение;

various alternatives open to the business – альтернативные пути ведения дела;

issued by the business – составленные предприятием;

adjust – регулировать (зд. строить);

to meet its commitments – выполнить взятые обязательства;

and so not have to close down – не приведет ли такое выполнение к закрытию предприятия;

assets – активы, средства;

liabilities – обязательства;

stocks of goods – запасы товаров;

motor vehicles – транспортные средства;

benefits such as debts owing by customers – причитающиеся фирме выплаты, такие как,

задолженность клиентов;

indebtedness – задолженность;

owing for goods supplied to the firm and for expenses, also for loans made to the firm – фирма должна за поставленные ей товары, за произведенные в ее интересах затраты, а также за пользование предоставленными ей заемными средствами;

the total amount supplied by him – общая сумма (кол-во) внесенных им средств;

the owner’s equity – собственный капитал;

net worth – чистый капитал;

accounting records – бухгалтерские записи;

Ledger – бухгалтрский Регистр;

customers’ personal accounts – личные счета покупателей;

Sales Ledger – Регистр продаж;

suppliers’ personal accounts – личные счета поставщиков;

the Purchases Ledger – Регистр покупок;

the Bought Ledger – /-/-

paying out of money – выплата денег;

a Cash Book - Кассовая книга;

a Jeneral Ledger – Главный или Номинальный регистр

a Nominal Ledger – /-/-

from being overloaded with details – от перегрузки ненужными деталями;

four new books were started for credit transactions only – были заведены 4 новые книги для

записи кредитных операций;

for credit sales – для продаж в кредит;

for credit purchases – для закупок в кредит;

for returns inwards – для учета возврата нам;

for returns outwards – для учета возврата поставщикам;

the profits earned by a business – прибыли, полученные предприятием;

the losses incurred by a business – убытки, понесенные предприятием;

the main reason why the business was set up in the first place – главная причина создания

предприятия;

proprietor – владелец;

to plan ahead – разработать план на будущее;

a loan – ссуда;

private individual – частное лицо;

prospective partner – потенциальный партнер;

for income tax purposes – чтобы рассчитать собственный подоходный налог;

to calculate – рассчитывать, подсчитывать;

to draw up a special account – составить специальный счет;

Trading and Profit and Loss Account – Счет торговли, прибылей и убытков;

the most important uses of the trading and profit and loss account – важнейшим назначением

счета торговли, прибылей и убытков;

comparing the results obtained will the results expected – сравнение полученных результатов

с ожидавшимися;

the accounting equation – бухгалтерская сбалансированность;

a financial position statement – отчет о финансовом положении;

balance sheet – балансовый отчет;

so as to be of benefit to the owner of the business – в интересах владельца предприятия;

multi-purpose documents- многоцелевые документы.

COMPREHENSION QUESTIONS:

1. What groups of people usually use accounting terms and ideas?
2. What is book-keeping?
3. How is the actual record-making phase of accounting usually called?
4. What is the accounting concerned with?
5. Why do the owners and managers of a business need some accounting knowledge?
6. What are meant by the terms assets, lialibities and capital? Describe them in detail.
7. What can you say about the basic structure of accounting records?
8. How many Ledgers are there and what are they?
9. What new books were started for credit transactions only?
10. What is the main purpose of the accounting function?
11. Why does the proprietor want to know for various reasons how much profit has been made?
12. What is the a Trading and Profit and Loss Account and the most important uses of it?
13. What is meant by the term Balance Sheet?

VOCABULARY EXERCISES:

Exercise 1. Suggest the Russian equivalents.

Accounting terms and ideas; the actual record-making phase of accounting; to be concerned with; facts that can be measured in monetary terms; recording of transactions; to meet its commitments; stocs of goods; benefits such as debts owing by customers; owing for goods supplied to the firm; the total amount supplied by him; the owner’ s equity; net worth; four new books were started for credit; to plan ahead; the accounting equation; balance sheet.

Exercise 2. Fill in the gaps with the words and expressions from the text:

1. Accounting is used in the business world to describe ___ entered into by all kinds of organisations.

2. Accounting is only ___ with those facts that can be measured in ___ with a fair degree of objectivity.

3. The actual record-making phase of accounting is usually called ___.

4. Accounting is concerned with the recording of ___, their ___, ___, ___ and ___ of records.

5. He should be using his ___ ___ in order to aid ___ to select ___ ___ ___ for the business.

6. The owners and managers of a business, investors and others will need some ___ ___ in order that they may ___ and ___ the financial ___ issued by the business.

7. People ___ with business should know the accounting terms such as ___, ___ and ___.

8. The ___ would be divided into four different books.

9. Probably, the main objective of the accounting function is the ___ of the ___ earned by a business.

10. This statement is called ___.

Exercise 3. Find in the text English equivalents:

Термины и понятия бухгалтерского учета; бухгалтерский учет оперирует только теми фактами; факты, которые поддаются оценке в денежном выражении; ведение бухгалтерских записей; запись операций; выполнить взятые обязательства; причитающиеся фирме выплаты, такие как задолженность клиентов; общая сумма (количество) внесенных им средств; собственный капитал; личные счета покупателей; Регистр продаж; Регистр покупок; выплата денег; Кассовая книга; для продаж в кредит; для учета возврата нам; для учета возврата поставщикам; прибыли, полученные предприятием; убытки, понесенные предприятием; потенциальный партнер4 составить специальный счет; важнейшие назначения счета торговли, прибылей и убытков; бухгалтерская сбалансированность; в интересах владельца предприятия.

Exercise 4. Translate the senteces using all the active possible:

1) Бухгалтерский учет часто называют языком бизнеса.

2) Бухгалтерский учет широко используется в деловом мире для описания сделок между различными организациями.

3) Под словом «Бухгалтерия» обычно подразумевается ведение бухгалтерских записей. Бухгалтер имеет дело не только с ведением бухгалтерских записей.

4) Он должен быть заинтересован в установлении зависимости между финансовыми результатами и теми событиями, которые привели к таким результатам.

5) Владельцев и руководителей предприятий волнуют два вопроса: во-первых, будет ли предприятие давать прибыль; во-вторых, в состоянии ли предприятие выполнить взятые обязательства.

6) Активы включают в себя все виды средств- здания, оборудование, запасы товаров, транспортные средства, причитающиеся фирме выплаты, такие как, задолженность клиентов, а также деньги на счете в банке.

7) Обязательства складываются из денег, которые фирма должна за поставленые ей товары, за произведенные в ее интересах затраты, а также за пользование предоставленными ей заемными средствами.

8) При торгово-закупочной деятельности прибыль рассчитывают с помощью специального счета – Счета Торговли, Прибылей и Убытков.

9) Несомненно, важнейшим назначением счета торговли, прибыли и убытков является сравнение полученных результатов с ожидавшимися.

Exercise 5. Agree or disagree with the following statements:

1. Accounting is considered to be the language of business.

2. Accounting terms and ideas are used only by accountants.

3. Accounting shows the full picture of the state of the business.

4. Accounting and book-keeping are synonyms.

5. Not only accountants, but managers, investors and others need some accounting knowledge.

6. The resources possessed by the firms are known as capital.

7. The sale’s ledger is used for supplier’s personal accounts.

8. The main objective of the accounting function is the calculation of the profits earned by a business or the losses incurred by it.

Exercise 6. Prepare a three-minute report on accounting in business.

Exercise 7. Make up bits of conversation using the folloing formulas expressing accepting advice and refusing advice:

I. Аccepting advice

1. Yes, that’ s a good idea – Да, это хорошая идея.

2. Yes, that’ s much better - Да, так намного лучше.

II. Refusing advice.

1. Well, I’ ll have to think about that – Хорошо, мне нужно подумать над этим.

2. No, I don’ t think that will work – Нет, не думаю, что это получится.

Exercise 8. Divide the text into logical parts and make up the plan.

Exercise 9. Give a summary of the text using your own plan.

Text B

Exercise1. Read the text without using a dictionary and answer the following questions:

1. What is called accounting?

2. How many forms of accounting are there?

3. What is the main aim of operative technical recording?

4. What is book-keeping?

5. What is book-keeping specific in?

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