6. Fill in the correct tense.

1. An external audit (do) by independent auditors.

2. A correct and reasonable picture of the company's current condition must (give) in the financial statements.

3. I am sure the information will (supply) promptly.

4. The analysis of the results of business activity will (give) by 10 o’clock tomorrow.

5. All the documents already (check) by the chief accountant.

6. The monthly balance sheet (not/draw up) today.

7. The accounts (examine) now.

8. He said that business transactions already (verify).

9. The decision (made) on the basis of the analysis.

10. The development of accounting (influence) by the reforms of Peter I.

7. Translate into English.

1. При Петре I практика бухучета была изменена.

2. Чтобы оценить результаты деятельности предприятия, финансовые документы тщательно проверяются.

3. Информация, которая будет представлена руководству, поможет нам принять правильное решение.

4. Работа бухгалтерии регулярно проверяется.

5. Отчет уже подготовлен?

6. Мы считаем, что работа с клиентами должна быть улучшена.

7. Главный бухгалтер сказал, что все счета уже проверены.

8. Я думаю, организация бухучета в банках изменится к 20 … году.

Speaking Task

8. Work in pairs. Discuss with your partner the role of accounting in the economy of a country. What are the basic terms of accounting? What is the purpose of accounting?

Writing

9. Read the text carefully and write the summary. Use the comments and useful phrases from Chapter II, Unit I, ex.9.

Users of accounting data and financial statements

Management

They are responsible for day to day business management. They need information on financial situation of business, i.e. current and expected in the future.

Shareholder:

They use information to assess performance of the management.

Trade partners (suppliers, customers)

Suppliers selling goods need information on security of their sales and payments. Customers buying goods need information on security and stability of their purchases.

Creditors

They need an assurance that loans granted to the business and interest on the loans will be paid on time.

Taxation authorities

They use information for assessment of taxes, including sales tax.

Employee:

They need assurance on security of their jobs, future career perspectives.

Financial analysts and advisors

They use information to provide services to clients (investors, credit agencies).

Government and its institutions

They use information to allocate resources, for statistical purposes.

Public

Businesses are members of public. They contribute to local economy, employment, usage of local resources, environment. Information is used to evaluate such contribution.

Unit II The balance sheet

Reading

Company law in Britain and the Securities and Exchange Commission in the US require companies to publish annual balance sheets: statements for shareholders and creditors. The balance sheet is a document which has two halves. The totals of both halves are always the same, so they balance. One half shows a business's assets, which are things owned by the company, such as factories and machines, that will bring future economic benefits. The other half shows the company's liabilities, and its capital or shareholders' equity. Liabilities are obligations to pay other organizations or people: money that the company owes, or will owe at a future date. These often include loans, taxes that will soon have to be paid, future pension payments to employees, and bills from suppliers: companies which provide raw materials or parts. If the suppliers have given the buyer a period of time before they have to pay for the goods, this is known as granting credit. Since assets are shown as debits (as the cash or capital account was debited to purchase them), and the total must correspond with the total sum of the credits - that is the liabilities and capital - assets equal liabilities plus capital (or A = L + C).

American and continental European companies usually put assets on the left and capital and liabilities on the right. In Britain, this was traditionally the other way round, but now most British companies use a vertical format, with assets at the top, and liabilities and capital below.

Shareholders' equity consists of all the money belonging to shareholders. Part of this is share capital - the money the company raised by selling its shares. But shareholders' equity also includes retained earnings: profits from previous years that have not been distributed - paid out to shareholders - as dividends. Shareholders' equity is the same as the company's net assets, or assets minus liabilities.

A balance sheet does not show how much money a company has spent or received during a year. This information is given in other financial statements: the profit and loss account and the cash flow statements.