2. Answer the questions on the text:

1. What role does an accounting system play in an economy?

2. Into what phases is accounting broken down?

3. What is an accounting equation?

4. What is the most widely practised principle of book-keeping?

5. What does the balance sheet list?

6. What is shown in the income statement?

3. Find English equivalents for the following Russian phrases from the text:

ключевой элемент экономической системы; финансовые результаты хозяйственной деятельности хозяйствующего субъекта; сделки, в которые вступают различные организации; получение, обработка и передача информации; отражение информации в финансовой отчетности; работать с прибылью; выполнять свои обязательства; бухгалтерское равенство; активы должны быть равны пассивам; в балансе отражаются ... ; учет по принципу двойной записи; отражать в балансе, составлять баланс; счет прибылей и убытков.

4. Say in a few words what the text is about. Use the following opening phrases:

The text looks at (the problem of...)...;

The text deals with the issue of...;

It is clear from the text that...;

Among other things the text raises the issue of...;

The problem of ... is of great importance. One of the main points to be single out is ...;

Great importance is also attached to ...;

In this connection, I'd like to say ...;

It further says that ..;

I find the question of... very important because ...;

We shouldn't forget that...;

I think that ... should be mentioned here as a very important mechanism of... .

UNIT 2

Accountancy in a free-market economy

Vocabulary list

accountancy бухгалтерский учет

performance показатели деятельности, результаты работы

economic status экономическое положение

managerial accounting управленческий учет

outside user внешний пользователь

financial accounting финансовый учет

going-concern basis принцип работающего предприятия

assumption посыл, предположение, допущение

economic substance экономическая сущность

relevance релевантность

timeliness своевременность

prudence предусмотрительность

reliability надежность

materiality материальность, существенность

consistency неизменность, преемственность

comparability сравнимость, сопоставимость

harmonize гармонизировать, сближать

1. Read and translate the text.

In a free-market environment, accounting provides a means for transmitting information about the performance of enterprises to those with an interest in it.

The basic functions of accounting in a market economy are to measure economic activity of an enterprise and its profit, to show changes in its financial position and ensure that a fair report of the economic status and performance is made available to all those concerned. These functions are performed at two different levels.

The accountants in the US communicate financial information to many people. What users need financial information?

One branch of accounting, called managerial accounting, provides information that managers use in making decisions within the firm. Other accountants prepare financial reports for outside users. This branch of accounting is known QS financial accounting. American accounting standards and objectives of financial statements fully meet the users' needs for useful information. The following basic principles ensure the provision of such information in the manner the market requires. First of all, accounts must be prepared on a going-concern basis. It means accounting is based on the assumption that the business will continue to operate. Besides, accounts must reflect the economic substance of the situation rather than simply its legal form. Other characteristics that make information useful for the users are relevance, timeliness, prudence, reliability, materiality, consistency and comparability.

Though these concepts are recognized internationally, users of information often fail to get a true and fair view of business operations. In the present conditions, there is need to work harder to harmonize national accounting systems so as to make it easier for users to assess financial information, particularly taking into account growth of transnational corporations and increasing interdependence of financial markets.