3.Answer the following questions:

1. What are raw data of accounting?

2. What makes the accountant’s task easier?

3. What is an account?

4. When is an account set up?

5. What does a number of accountants depend on?

6. In what may accountants differ?

7. What is translated into debits and credits?

4.Say if the following is true or false. Use the phrases: I have no doubt that...; I greatly doubt that...; It is a common knowledge that...:

1. A business may engage only one transaction during a period of time.

2. An account is used to classify money measurements of business activities of a similar nature.

3. The number of accounts depends on the information needed by those interested in the business.

4. Different titles should be used throughout the accounting records.

5. Accounts always take on only one format.

6. Increases and decreases effects are translated into debits and credits.

5.Fill in the gaps with the words: Account/s, accounting, accountant, accountancy

1. An _____ is an element in an _____ system.

2. _____ is a process of measuring and recording financial activity.

3. The _____ should design the _____ system.

4. _____ is a language of business.

5. An _____ is concerned with interpretation of financial information.

6. _____ is a service activity.

7. Asset _____ include cash.

8. ______is a fast growing profession.

9. _____ contains elements both of science and art.

10. A separate _____ is kept for each asset.

11. Many people confuse _______ and bookkeeping.

12. _______ is a service activity.

13. An_____ provides and interprets financial information.

14. _______ as a profession is very important.

UNIT 8

1. Memorize the following words and word-combinations:

statement of owner’s equity - отчет о капитале компании, звіт о

капіталі підприємства

statement of cash flow - отчет о движении ликвидности, звіт

про переміщення готівки

statement of financial position - отчет о финансовом состоянии, звіт про

фінансове положення

to list - перечислять, перелічувати

net income - чистая прибыль/доход, чистий

прибуток

to exceed - превосходить, перевищувати

net loss - чистые затраты/убытки, чистий збиток,

чисті витрати

withdrawal - изъятие, брати назад

to exclude - исключать, виключати

depreciation - обесценение, знецінювання, зниження

вартості

2. Read and translate the text: business documents

The analysis of the transactions complete, what is the next step in the accounting process? How does an accountant present the results of the analysis? We now look at the financial statements. These business documents report financial information about the entity to persons and organizations outside the business.

The primary financial statements are the (I) balance sheet, (2) in­come statement, (3) statement of owner's equity, and (4) statement of cash flow.

The balance sheet lists all the assets, liabilities, and owner's equity at a point in time, usually the end of a month or a year. The balance sheet is like a snapshot of the entity. For this reason, it is also called the state­ment of financial position. A balance sheet is made up of two lists, placed side by side. On the left the company lists everything it owns, such as cash and 'fixed assets' called property, plant, equipment, which include everything from buildings and trucks to tools, pencils, and copy ma­chines. This list is labelled assets. On the other side, the company lists its liabilities, consisting of all the claims to the company's assets, from creditors and from the company owners.

The income statement, or profit and loss statement (P&L) meas­ures the performance of an enterprise. It presents a summary of the revenues and expenses of an entity for a specific period of time, such as a month or a year. The income statement, also called the statement of operations, is like a moving picture of the entity's operations during the period. The income statement holds perhaps the most important single piece of information about a business—its net income, which is reve­nues minus expenses. If expenses exceed revenues, the result is a net loss for the period.

The statement of owner's equity presents a summary of the chang­es that occurred in the owner's equity of the entity during a specific time period, such as a month or a year. Increases in owner's equity arise from investments by the owner and net income earned during the peri­od. Decreases result from withdrawals by the owner and from a net loss for the period. Net income or net loss comes directly from the income statement. Investments and withdrawals by the owner are capital trans­actions between the business and its owner, so they do not affect the income statement.

Another tool for understanding a company's activity is to look at its cash flow. This measures the actual flow of funds - real money - flowing into and out of a company during a given period of time. A company's cash flow factors out all of the accounting tricks and looks at what a company really earned, because it excludes accounting tools such as depreciation.