Finance and banking. The main feature of money, the means of payment, a medium of exchange, a standard of value

Through effective application of different accounting systems.

c) Common procedures are used in handling financial information.

d) All companies use identical accounting systems.

3. What do the balance sheet and the income statement have in common?

a) The balance sheet and the income statement show the same financial data.

b) The balance sheet and the income statement show the financial position of a business at one point of time.

c) The balance sheet and the income statement are two common financial statements that provide accurate financial information for interested parties.

d) Both the balance sheet and the income statement reflect the major financial activities of a business over a period of time.

4. What kinds of services do accountants provide?

a) Accountants work solely for private companies and corporations.

b) Accountants provide accounting services to companies, governmental agencies, bureaus, and individuals.

c) Accountants provide such services as auditing, and tax computations.

d) Accountants work solely as governmental accountants.

5. What are revenues and expenditures?

a) Accountant’s salary

b) Financial statements

c) Accounting standards

d) Incoming and outgoing money

V. Закончите предложения, используя слова и словосочетания, соответствующие содержанию текста:

1. Accounting is often called “language of business because of its ability_________ financial data about an organization.

a) to achieve                                           c) to compare

b) to show                                               d) to communicate

2. An effective ___________must include accurate collecting, recording, classifying summarizing, and reporting financial information.

a) financial statements                           c) common procedures

b)  standardized system,                        d) accounting system

3. Accounting information is used by ___________________ to help them make financial decisions.

a)managers                                             c) creditors

b) potential investors                              d) all of the above

4. Regardless of the type of business or the amount of money involved, _____________.

a) balance sheets are more important than income statements

b) no standardized accounting systems are employed

c) every organization uses identical accounting systems

d) common procedures are used in handling financial data.

5. Business monetary transactions are summarized in ___________.

a) bank books                                        c) computer software

b) financial statements                          d) tax computations

VI. Задания к тексту “Accounting as a Profession

1. Прочитайте и переведите заголовок текста.

2. Прочитайте часть (1) текста. Укажите информацию, которая соотносится с заголовком текста.

3. Прочитайте часть (2) текста. Выделите ее основную информацию.

4. Прочитайте часть (3) текста. Определите смысловую связь этой части с частью (2) текста.

2.2.Accounting as a Profession

(1) The transition of accounting from a trade into a profession began in Scotland and England in the late 19th century with the establishing of the Institute of Chartered Accountants in England and Wales in 1880. This was followed in the U.S. by the establishment of the American Institute of Certified Public Accountants in 1887.

The professionalizing of accounting was facilitated by several factors including:

a)  the development of a common body of knowledge;

b)  a system of "due process" for the development of rules and regulations (standards);

c)  the incorporation of the common body of accounting knowledge into a university curriculum;

d)  the development of a qualifying examination and experience requirements necessary for entrance into the profession;

(2) Proprietary theory.In the late nineteenth century most economic activity was being performed by small business with no separation of management and ownership. During this period accounting operated under the Proprietary Theory, which can be expressed by:

Assets - Liabilities = Proprietor Capital

This theory recognized that the owners had direct ownership of the entity's assets and were directly liable for the liabilities.

In most cases, banks in support of loan applications primarily required external financial information. This led to the following developments:

a)  the need for independent verification of the financial information;

b)  an emphasis on financial position as the security for the loan, with particular focus on liquidity;

c)  the development of the Cost_Pnncjple which required assets, in most cases, to be recorded at acquisition price, due to the relative ease of verification.

Generally, the Cost Principle did not allow for the re-valuation of the asset after acquisition due to the subjectivity inherent in that process.

The need for independent verification of financial information