NAMA : ERMALIA WINDASARI
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AN ACCOUNTING OVERVIEW
Accounting is frequently called the language of business because of its ability to communicate financial information about an organization.Various interested parties,such as manager,potential investors,creditors,and the government,depend on a company’s accounting system to help them make informed financial decisions.An effective accounting system,therefore,must include accurate collecting,recording,classifying,summarizing,interpreting,and reporting of information on the financial status of an organization.
In order to achieve a standardized system,the accounting process follows accounting principles and rules.Regardless of the type of business or the amount of money involved,common procedures for handling and presenting financial information are used.Incoming money (revenues) and outgoing money (expenditures) are carefully monetered,and transactions are summarized in financial statements,which reflect the major financial activities of an organization.
Two common financial statements are the balance sheet and the income statements.The balance sheet shows the financial position of a company at one point in time,while the income statement shows the financial performance of a company over a period of time.Financial statements allow interested parties to compare one organization to another and or to compare accounting periods within one organization.For example an investor may compare the most recent income statements of two corporations in order to find out which one would be a better investment.
People who specialize in the field of accounting are known as accountants.In the United States accountants are usually classified as public,privat,or governmental.Public accountants work independently and provide accounting services such as auditing and tax computation to companies and individuals.Public accountants may earn the title of CPA (Certified Public Accountant) by fulfilling rigorous requirements.Private accountants work solely for private companies or corporations that hire them to maintain financial records and governmental accountants work for governmental agenciesor bureaus.Both private and governmental accountants are paid on a salary basis,whereas public accountants receives fees for their services.
Through effective applications of commonly accepted accounting systems,private,public,and governmental accountants provide accurate and timely financial information that is necessary for organizational decision-making.
A.Answer the following question about accounting.Questions with asterisks(*) cannot be answered directly from the text.
1.Why is accounting called the “language of business” ?
2.How is standardized accounting system achieved ?
3.What are revenues and expenditures ?
4.What do the balance sheet and the income statement have in common ? How are they different?
5.*How might the information contained in financial statements be useful to managers ?*How might creditors use this information ?
6.How are accountants classified In The United States ?
7.What kinds of services do public accountants provide ?
8.What is a CPA ?*Do you have a similar type a position in your country ?*Explain
9.*Which of accounting-public,privat,or governmental-appeals to you the most?*Why ?
10.*What are some management decision that might be based an accounting information ?
ANSWER !!!
1.Accounting is called the “language of business” because of its ability to communicate financial information about an organization.
2.In order to achieve a standardized accounting system,the accounting process follow accounting principles and rules.
3.Revenues are incoming money and expenditures are outgoing money.
4.The balance and the income statements are two common financial statements.They are different.The first shows the financial position of a company at one point of time,while the second shows the financial performance of a company over a period of time.
5.The information contained in financial statements might be useful to creditors.It helps them to find out whether the company will be able to repay the credit on time or not.
6.In the
7.Public accountants provide accounting services such as auditing and tax computation to companies and individuals.
8.A CPA is a Certified Public Accountant.Yes we had formerly Faculty of Economics graduate of 5 elite universities got Drs…Ak degree.
9.The most is a public accounting.Because Public accountants provide accounting services such as auditing and tax computation to companies and individuals.
10.In some companies financial decision makings might be based on accounting information.For example the management want to expands its business to build a bigger factory to introduce new variety of goods.
B.Choice the answer that best completes each of the sentences bellow.
1.Accounting information is used by … to help them make financial decisions.
D.all of the above
2.Regardless of the type of business or the amount of money involved :
C.Common procedures are used in handling financial information.
3.Business monetary transactions are summarized in :
B.Financial statements.
4.Public accountants may earn the title of CPA by :
C.Fulfilling rigorous requirements.
5.Private and governmental accountants are paid on a … basis.
A.Salary.
A.Substitute appropriate terms for the italicized words or phrases in the sentences below.
Status agencies monitored maintain independently
Procedure fee hire rigorous solely
1.Many accounting departments have strict entrance requirements;only the most qualified applicants are allowed to enter these programs.(Rigorous.)
2.The particular method used to process employee insurance claims may vary from company to company.(procedure)
3.The stock market is closely watched every day.(monitored.)
4.Rather than expand into foreign lines,the dress shop manager chose to deal only with domestic fashion designers.(solely.)
5.Although the consultants charge for services was high,his guidance and advice were well worth the money.(fee.)
6.The financial condition of a company is reflected in its financial statements.(status.)
7.When the business began to expand,a second bookkeeper was brought in to help keep the books.(maintain.)
8.In the
B.Complete the sentences with the noun,verb and adjective forms provided.
1.communication / to communicate / communicative
a.Supervisors should strive for two-way communication with their employees.
b.By using and overhead projector,the guest speaker was able to communicate his statistical information clearly.
c.Because of the clerk’s highly developed communicative skills she was given a position that required her to deal directly with customers.
2.Information / informed / informative
a.The owner informed his employees that they would all receive a 5 percent pay increase.
b.Getting acquainted with accounting by john L Carey is a very informative book.
c.Financial information is essential for organizational decision making.
3.Allowance / allowed / allowable
a.The supervisor lost control of his staff members after he allowed them to override his decisions.
b.When the factory was built 50 years ago little allowance was made for remodeling and expansion.
c.Although allowable smoking was discouraged in the lunch room.
4.Fulfillment / fulfill / fulfilling
a.At times the assembly line worker felt a lack of professional fulfillment.
b.When he was promoted to production supervisor,however,his job became much more fulfilling.
c.Before the accountant could became a CPA she had to fulfill a number of requirements.
5.Standards / has standardized / standard
a.The standard paper size in the
b.The computer department has standardized its procedures for storing and retrieving data.
c.Nowadays rigorous standards are enforced in the area of food processing and packaging.
C.Fill in the blanks below with the most appropriate terms from the list.
Parties financial statements reflected standardized allows
Whereas interpretations informed communicates rigorous
An income statement is one example of a financial statement.It communicates financial information about a company over a period of time.A standardized format is used to present the financial information.This allows interested parties to compare one income statement to another in order to make informed financial decisions.But there is still a great deal of risk involved in financial decision making because the information reflected in an income statement is subject to a variety of interpretations.
Look at the reading to answer these questions.
1.What does each of the following refer to ?
LINES WORDS REFERENTS
1 its Accounting
4 them whereas parties
19 another corporations
21 one organization
THE END
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