Английский язык: Сборник текстов. Гурская Т.А. - 4 стр.

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    An accounting system in a given country is one of the key elements of the eco-
nomic system. It is determined to a significant extent by the level and direction of the
economic system's development.
    The most important theoretical concept of the Anglo-American accounting may be
summed up as follows: the subject of accounting is the calculation of the financial re-
sults of an economic entity's business activity.
    Accounting is used to describe the transactions entered into by all kinds of organi-
zations.
    Accounting can be divided into three phases: capture, processing and communica-
tion of financial information.
    The first phase, the process of capturing financial information and recording it,
is called book-keeping. Accounting extends far beyond the actual making of records. It
includes their analysis and interpretation, it shows the relationship between the finan-
cial results and events, which have created them.
    Accounting can show the managers or owners of a business whether or not the
business is operating at a profit, whether or not the business will be able to meet the
commitments as they fall due.
    Accounting is based on the accounting equation, which states that a firm's assets
must equal its liabilities plus its owners' equity.
    Assets and liabilities, profits and losses are listed in financial statements. The two
main types of financial statements are the balance sheet and the income statement
(profit and loss account).
    The balance sheet lists a firm's assets, liabilities and owner's equity at a point of time.
    Changes in the balance sheet are made according to the principle of double-entry
book-keeping. This principle states that each transaction must be recorded on the bal-
ance sheet as two separate entries so that the totals of each side will always equal one
another, and that this will always be true no matter;how many transactions are entered
into.
    Balance sheets are diawn up periodically: monthly, quarterly, half-yearly, annually.
    There is an account for every asset, every liability and capital. Accounts can be
prepared either on a cash or accrual basis. Each account should be shown on a sepa-
rate page.
    The double entry system divides each page into two halves. The left-hand side is
called the debit side, while the right-hand side is called the credit side.
    The balance sheet shows a lot of useful financial information, but it does not show
everything. A firm's sales, costs, and profits for a given period are shown in an in-
come statement.

     Answer the questions on the text:
    1. What role does an accounting system play in an economy?
    2. Into what phases is accounting broken down?
    3. What is an accounting equation?

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