a) True;
b) False;
New dimensions of accounting will not be recognised and its comparatively new fields will not be dynamically developing.
a) True;
b) False;
3. In the 21st century the world will continue to move slowly towards a single economy.
a) True;
b) False;
At present, however, there no problems on the way of setting international standards.
a) True;
b) False;
Harmonising accounting standards internationally will improve the comparability of accounting information throughout the world.
a) True;
b) False;
TEXT 2
ACCOUNTING SYSTEM
Exercise 2.1
Study the vocabulary:
| a grocery store | |||
| an international oil exploration and refining business | |||
| to appreciate | |||
| premises and fittings | |||
| to outweigh | , | ||
| to be closely involved in day-to-day operations | |||
| to become a manager's eyes and ears | ( ) | ||
| to be both sophisticated and expensive to operate |
Exercise 2.2
Read and translate the text:
1. As it is known, accounting is concerned with providing economic information for decision-making purposes. The accounting system must, therefore:
gather relevant economic information;
shape this information into a form which is suitable for users;
communicate the information to users.
In practice, accounting systems can vary considerably in design and level of sophistication. Thus, the accounting system of a small grocery store may appear to be totally different in nature to the accounting system of an international oil exploration and refining business. However, there are certain elements which are common to all accounting systems and which need to be identified in order to appreciate the functioning of these systems.
2. These common elements are:
Information collection establishing procedures to ensure that relevant economic information is collected;
Information recording recording and classifying the collected information in a logical manner;
Information evaluation analysing the information which has been collected and recorded and arriving at an appropriate economic assessment;
Information reporting communicating the analysed information in the form of reports which are suitable for the needs of users.
When designing an accounting system for a business, many factors have to be taken into account, including:
the cost of the system;
the complexity of the system;
the amount of detailed information the system is required to give.
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For all users of the system, it is important to consider the costs of the system and to weigh these costs against the expected benefits.
3. The owner-manager of a small grocery store may be prepared to accept a relatively simple accounting system on the basis that it is inexpensive to operate. The owner-manager is likely to have a reasonable understanding of the financial position and performance of the business as a result of the day-to-day involvement in trading operations, and thus be familiar with the amount of trade carried out, the level of stock and cash, the condition of the premises and fittings, and so on. Although a complex accounting system may provide more accurate and detailed information, this information is not often vital and the costs of operating the system would outweigh the additional benefits derived.
A senior manager in an international oil exploration and refining business, however, may be responsible for different trading operations throughout the world, and cannot, therefore, be closely involved in day-to-day operations. In order to overcome the problem of remoteness the accounting system can become a manager's 'eyes and ears' providing information concerning the financial position and performance of trading operations. The complexity of the business and the needs of the manager for detailed information will mean that the accounting system is likely to be both sophisticated and expensive to operate. However, the benefits of the system in terms of improved economic decision-making should outweigh its costs.
Exercise 2.3
Read the text again and choose the best variant:
1. The accounting system must
a) gather appropriate economic information
b) gather official economic information
c) gather unrelated economic information
