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Lesson-2-Accounting - Reading & Exercise-1

Accounting measures business activities and processes information into reports that communicate findings to decision makers. Financial statements report on an individual's or organization's business in monetary amounts, making accounting the language of business decisions. Accounting information allows decision makers to determine if a business is profitable, sales are strong enough to expand, and if profit can be allocated to new projects. Users of accounting information include individuals, businesses, investors, creditors, analysts, employees, and government, who all use the data for financial planning and evaluation.

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70 views3 pages

Lesson-2-Accounting - Reading & Exercise-1

Accounting measures business activities and processes information into reports that communicate findings to decision makers. Financial statements report on an individual's or organization's business in monetary amounts, making accounting the language of business decisions. Accounting information allows decision makers to determine if a business is profitable, sales are strong enough to expand, and if profit can be allocated to new projects. Users of accounting information include individuals, businesses, investors, creditors, analysts, employees, and government, who all use the data for financial planning and evaluation.

Uploaded by

ergiganteng050205
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lesson 2

ACCOUNTING

A. Reading
General Comprehension

In this section you are given a text to read. You should first read it through, even if you do
not understand it all, looking especially at the way it is set out in paragraphs. This will give you a
general idea what it is about and how it is arranged.
Now look at the following questions and read the passage through to find the answers.
Remember that you do not need to understand every word in order to answer the questions. You
will probably need to read it several times.

Accounting is the system that measures


business activities process information into
reports, and communicates these findings to
decision makers. Decision makers normally
base their decision on accounting reports. The
documents that report on an individual’s or
organization’s business in monetary amounts
are known as financial statements. Because of
this, accounting is often called the language of
business or better still the language of financial
decisions. The better we understand the
language, the better we can manage the
financial aspects of living.
Is our business making profit? Are sales strong enough to expand our production capacity?
Can we allocate some of the profit to a new instrument project? The most intelligent answers to
business questions like these are based on accounting information. Decision makers use the
accounting information to develop sound business plans.
The user and uses of accounting information vary. The users include individuals, business,
investors and creditors, financial analysts, employees and labour union, taxing authorities and
other users. Business managers use the accounting information to set goals for their
organizations, to evaluate their progress towards these goals and take corrective action if
necessary. Potential investors use the financial statement to evaluate what return they can
reasonably expect on their investment. Potential lenders use the accounting information to
determine the borrower’s ability to meet the scheduled payments. Financial analysts use the
accounting information to advise their clients, or employers about various instrument alternatives.
Employees and labour unions use the accounting information to evaluate salary and fringe benefit
packages.

(Adopted from Accounting (2nd edition) by Horngren & Harrison, p 2-4)

Exercise 1
Answer the following questions.
1. What is the topic of the passage?
2. Why is accounting called the language of financial decisions?
3. What is the end product of the accounting work?
4. What does accounting mean to potential investor?
5. List the things accounting does!

6
ACCOUNTING 7

Exercise 2
Do a survey based on these guiding questions:
1. Do your parents support you financially?
2. Do you work to get pocket money?
3. Do you record your income?
4. Do you record your spending?
5. Why did you (not) record your income and spending?
6. What are the advantages of recording your income and spending?

B. Vocabulary
Exercise
Use appropriate word forms in the bracket in the following sentences.
1. Accounting (process) information into report.
2. Decision makers normally (base) their decision on accounting reports.
3. The users and ___ of accounting information (vary).
4. Financial analysts (use) accounting information to advise their clients.
5. Potential investors (use) the financial statement to (evaluate) what return they (expect) on their
investment.

Exercise
Write a report about the resource of your survey about your friends in income and spending.

C. Grammar
Look at the following sentences.

a. Accounting measures business activities.


S V O

b. Documents that report on an individual’s business in monetary amounts are financial statements.
S V A

Exercise 1

State whether the sentence SVO or SVA patterns.

1) Decision makers base their decision on accounting reports.


2) Accounting is the language of business.
3) We can manage the financial aspects of living.
4) Our business is making a profit.
5) Sales are strong enough to expand our production capacity
6) We can we allocate some of the profit to a new instrument project.
7) The most intelligent answers to business questions like these are very important.
8) Decision makers use the accounting information to develop sound business plans.
9) The users include individuals, business, investors and creditors, financial analysts, employees
and labour union, taxing authorities and other users.
10) Business managers will be very busy setting goals for their organizations, evaluating their
progress towards these goals, and taking corrective action if necessary.
ACCOUNTING 8

Exercise 2

Write sentences using the simple present tense based on these words. Use the SVO pattern.
1. process
2. invest
3. communicate
4. return
5. payment
6. develop
7. borrow
8. employees

Exercise 3

Now, write sentences using the simple present tense using the SVA pattern.
1. process
2. important
3. creditors
4. helpful
5. investment

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