Creating accounting

9.2.A

Summarising I

Avoiding plagiarism

Plagiarism is presenting another person's words or ideas as if they were your own. Although occasionally intentional, it is more often due to the writer being unaware of what constitutes plagiarism. However, whether deliberate or accidental, plagiarism is seriously frowned upon in business, education, research, and in general.

It is therefore essential to document the following:

• direct quotations

• opinions and judgements of the original author

• facts that are not widely known, or universally accepted

• statistical data.

The following passage is an extract from an article which appeared in The Economist. Following the passage are five summaries, four of which are guilty of plagiarism. In each of these cases identify the specific violations of the plagiarism guidelines above.

Summary 1

There are many accounting mechanisms which accountants can use, quite legally, in order to make the company's position look healthier. Using different methods of calculating depreciation, for example, or capitalisation of costs are commonly used ploys.

Many big British companies have convertible bonds with put options which could prove costly if share prices fall. Accountants' failure to provide against this possibility could mean that shareholders will one day have a nasty shock.

Summary 2

There are many accounting mechanisms which accountants can use, quite legally, in order to make the company's position look healthier. Using different methods of calculating depreciation, for example, or capitalisation of costs are commonly used ploys.

Many big British companies have convertible bonds with put options which could prove costly if share prices fall. Accountants' failure to provide against this possibility means that some companies could one day be reaching for their pockets - or those of their shareholders.

Discounting for creativity - The Economist (19/01/91)

Summary 3

There are many accounting mechanisms which accountants can use, quite legally, in order to make the company's position look healthier. Using different methods of calculating depreciation, for example, or capitalisation of costs are commonly used ploys.

Many big British companies have convertible bonds with put options which could prove costly if share prices fall. Accountants' failure to provide against this possibility could mean that shareholders will one day have a nasty shock.

Discounting for creativity - The Economist (19/01/91)

Summary 4

There are many accounting mechanisms which accountants can use, quite legally, in order to make the company's position look healthier. Using different methods of calculating depreciation, for example, or capitalisation of costs are commonly used ploys.

Many big British companies have 'convertible bonds with put options'¹ which could prove costly if share prices fall. Accountants' failure to provide against this possibility could mean that shareholders will one day have a nasty shock.

¹Discounting for creativity - The Economist (19/01/91)

Summary 5

There are many accounting mechanisms which unscrupulous accountants can use in order to make the company's position look healthier. Using different methods of calculating depreciation, for example, or capitalisation of costs are commonly used ploys.

Many big British companies have convertible bonds with put options which could prove costly if share price fall. Accountants' failure to provide against this possibility could mean that shareholders will one day have a nasty stock.

Discounting for creativity - The Economist (19/01/91)

9.2.B

Summarising 2

Being brief and to the point

Read the following passage and then write a summary of it in no more than 70 words.

MEASUREMENT OF PROFITABILITY

It has been argued that profitability is the primary aim and the best measure of efficiency in competitive business. However, profits as such are meaningless unless related to the equity (ordinary) shareholders' investment in the business. The relationship between the capital invested in a business and the profits earned is the rate of return on capital employed. The ability to earn a satisfactory rate of return on equity shareholders’ investment. Is the most important characteristic of the successful business. Increased sale volume is at best a short-term indication of successful growth, and, without additional information, must be viewed as such.

In the long run, increased sales volume may prove a deceptive guidepost if there is not a proper return on the capital necessary to support these sales. Real growth comes from the ability of management to employ successfully additional capital at a satisfactory rate of return. This is the final criterion of the soundness and strength of a company's growth, for in a competitive economy capital gravitates towards the more profitable enterprises The company that is merely expanding sales at a declining rate of return on capita employed will eventually be unable to attract expansion capital. Thus any measurement of a company's effectiveness must be based on the successful employment of capital.

J Sizer, An Insight into Management Accounting, Pelican (1975)

9.2.C

Vocabulary

Verbs and nouns in context

I All of the following verbs appear in this unit. Insert them in the gaps in the sentences below, conjugating them wherever necessary.

1 It was lucky she the mistake before the documents went up to the controller's office.

2 We've run out of cash. Could you go the bank and ___________________$150?

3. The management has just decided more resources to the R&D department.

4. We shouldn't too much of our capital in inventory.

5. He was concerned about how the new law our accounting procedures.

6. We've heavy losses but the prospects for next year are much better.

7. Our accounting system is to tightly control costs.

8. Unpaid bills have on his desk since he went on sick leave.

9. They're slow payers; they still us over $100 from the January order.

10. It's going to be tricky expenses when we're not even sure about next quarter's sales.

11. I would like you an objective analysis of the situation.

12. Property around here will never . It will probably double in value over the next five years.

13. Last year she a three-month accounting traineeship with Maple Leaf Enterprises.

14. It is essential for the company's book-keepers and _______________________every transaction made.

2 Find the nouns which correspond to the following verbs.

Example

3 Fill in the blanks in the following paragraph, using nouns from the previous exercise.

Here is a 1 of a Chairman’s

2 regarding the company’s

3 for the second quarter. In spite of new government 4 , sales increased by 8%, leading to the

5 of higher profits. Although the

6 of sterling has led us to revise our

7 for the coming year, the

8 of an extra half a million dollars to the advertising budget and the 9 of our production process mean that next year we’ll beat every 10 .

9.2.D

Vocabulary

Compound words

I Match each of the words in the first column with words in the second column to make compound nouns.

1. cross

2. finished

3. accrued

4. cash

5. crystal

6. accounts

7. current

8. notes

9. rights

10. balance

11. income

12. income

13. working

14. production

15. retained

16. fiscal

1. sheet

2. expenses

3. receivable

4. statement

5. costs

6. earnings

7. ball

8. capital

9. goods

10. taxes

11. check

12. flow

13. issue

14. payable

15. assets

16. year

2 Write a concise definition for three of the above terms without using a dictionary and without using the term itself. In small groups, read your definitions to each other. The other members of your group have to decide which term you are defining.