Income Distribution

Correspondent: Alice: Correspondent: Alice: Correspondent: Alice: Correspondent: Alice: Correspondent: Alice: Correspondent: Alice: Correspondent: Alice:

The debate on the distribution of income often focuses on the conditions of life of the young. Most typically, young people in Britain leave home after they finish school. Do you live on your own? No, I don’t. If I had finished school with better marks I would have entered the local Polytechnical College and would have left home like many of my friends. But I’m looking for a job now and live with my parents. What is the annual income of your family? We are a middle-class family. My parents work at the local factory. As in many families our income comes from different sources. What’s the largest source? It’s my parents’ employment. Then we get a return on my father’s savings. Besides, my parents have some shares of their company. As shareholders they get dividends. How do you spend the money? Nearly all money goes on rent, utilities, transport, clothes, and food. Do your parents give you any pocket money? Yes, they do. Do you spend it on leisure and entertainment? Well, I go out for a meal or to the cinema sometimes, but I can’t afford to do it often. What would you do, if you had more money, Alice? Well, if I had more money I would start my own business.

Texts for Extra Reading

Ex.15. Read and translate the text.

Accounting and Auditing

Whenever a man sets up a business it is because he feels he can produce some useful commodity or service which will be needed by his fellow citizens. In return he expects to be able to earn a profit on his business. To conduct his affairs efficiently and profitably the businessman must have some knowledge of accounting.

Accounting is the language of finance which all business decision-makers must understand. It is the process of capturing, processing, and communicating financial information. In other words, it is an information system that accumulates, records, classifies, summarizes, and reports commercial transactions. The aim of this process is to show the financial condition of a business entity. This information, in the form of financial statements, is then communicated to those who make decisions concerning the operations of an enterprise.

Bookkeeping is a small part of the system and deals with record-keeping.

Accounting information is used by managers, investors, and different groups in society, for example, tax authorities, labour unions, local governments, financial analysts etc. From this perspective, accounting is divided into managerial and financial accounting.

The major branches of accounting are public, private, and governmental accounting.

Public accounting refers to the work done by independent Certified Public Accountants (CPA), the corresponding professional British title being Chartered Accountants. They audit the books of companies to ensure that their financial statements and records are properly stated.

Private accounting refers primarily to the private sector of the economy and involves the analysis and recording of financial information by accountants who are employees of the business entity.

Governmental accounting is the accounting function performed for central (federal and state) and local governmental institutions.