text a — accounting: the basis for business decision
TRANSCRIPT
![Page 1: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/1.jpg)
Text A — Accounting: The Basis for Business Decision
![Page 2: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/2.jpg)
Text A — Accounting: The Basis for Business Decision
Comprehension of Text A (1) Accounting is not the same as
bookkeeping. *bookkeeping: Bookkeeping is the job
or activity of keeping an accurate record of the money that is spent and received by a business or other organization.
![Page 3: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/3.jpg)
Text A — Accounting: The Basis for Business Decision
(2) Personal financial planning, education expenses, loans, car payments,
income taxes, and ….
*income tax: Income tax is a certain percentage of your income that you have to pay regularly to the government.
![Page 4: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/4.jpg)
Text A — Accounting: The Basis for Business Decision
(3) Virtually all businesses and most individuals keep accounting records to aid in making decisions.
*virtually: You can use virtually to indicate that something is so nearly true that for most purposes it can be regarded as true. (=almost)
e.g. It would have been virtually impossible to research all the information.
![Page 5: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/5.jpg)
Text A — Accounting: The Basis for Business Decision
(4) This means analyzing the financial statements of the business and keeping up with developments in the business press — for example, The Wall Street Journal and Business Week.
*statement: a printed document showing how much money has been paid into and taken out of a bank or building society account.
![Page 6: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/6.jpg)
Text A — Accounting: The Basis for Business Decision
e.g. You can pay bills over the Internet. Additionally, you can check your balance or order statements.
![Page 7: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/7.jpg)
Text A — Accounting: The Basis for Business Decision(5) Before making a loan, creditors
(lenders) such as banks determine the borrower’s ability to meet scheduled payments.
*creditor: a person to whom money is owed by a debtor
![Page 8: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/8.jpg)
Text A — Accounting: The Basis for Business Decision
e.g. Following the Asian Crisis,
foreign creditors and investors have demanded that business groups have more transparent operations and stronger corporate governance.
![Page 9: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/9.jpg)
Text A — Accounting: The Basis for Business Decision
*schedule: plan the time and place for events
e.g. Has the match been scheduled?
*scheduled payments: arrangement for planned payments for goods or services at fixed times
![Page 10: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/10.jpg)
Text A — Accounting: The Basis for Business Decision
(6) To borrow from a bank before striking it rich, Harold Nix probably had to document his income and financial position.
*document: [v] prove something by documents
![Page 11: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/11.jpg)
Text A — Accounting: The Basis for Business Decision
(7) Most organizations face government regulation.
*regulation: the controlling of an activity or process, usually by means of rules
![Page 12: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/12.jpg)
Text A — Accounting: The Basis for Business Decision
e.g.
The European Union has proposed new regulations to control the hours worked by its employees. (=rules)
![Page 13: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/13.jpg)
Text A — Accounting: The Basis for Business Decision
regulator: a person or organization appointed by a government to regulate an area of activity such as banking or industry.
e.g. An independent regulator will be appointed to ensure fair competition.
![Page 14: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/14.jpg)
Text A — Accounting: The Basis for Business Decision
securities: stocks, shares, bonds, or other certificates that you buy in order to earn regular interest from them or to sell them later for a profit
e.g. government securities: money lent to a government
![Page 15: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/15.jpg)
Text A — Accounting: The Basis for Business Decision
(8) Local, state and federal governments levy taxes on individuals and businesses.
levy: demand, collect a tax or other sum of money from people or organizations by authority or force
e.g. Taxes should not be levied without the authority of Parliament.
![Page 16: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/16.jpg)
Text A — Accounting: The Basis for Business Decision
(9) Non-profit organizations … use accounting information in much the same way as profit-oriented businesses do.
*-oriented: -directed e.g. quality/exam-oriented educ
ation export/import-oriented economy .
![Page 17: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/17.jpg)
Outline of Text A. Part1. Definition of accounting (Para.1)
Accounting is the information system that measures business activities, processes that information into reports, and communicates the results to decision-makers.
![Page 18: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/18.jpg)
Outline of Text A. Part1. Definition of accounting (Para.1)
To be precise, it is the activity of keeping detailed records of the amounts of money a business or person receives and spends.
![Page 19: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/19.jpg)
Part2. Who keep accounting records? (Para.2-9)
All businesses and most individuals keep accounting records to aid in making decisions.
(1) Individuals (2) Businesses
![Page 20: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/20.jpg)
Part2. Who keep accounting records? (Para.2-9)
(3) Investors (4) Creditors (5) Government Regulatory Agen
cies (6) Taxing Authorities (7) Non-profit Organizations
![Page 21: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/21.jpg)
Part3. Classification of accounting (Para.10-12)
(1) Accounting is classified into two fields: financial accounting and management accounting.
(2) Different focuses of financial accounting and management accounting.
![Page 22: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/22.jpg)
Part3. Classification of accounting (Para.10-12)
a. Financial accounting focuses on information for people outside the firm.
b. Management accounting focuses on information for internal decision-makers.
![Page 23: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/23.jpg)
Text B — Internal Control Outline of Text B
Part1. One case to show the importance of the internal control (Para.1-4)
![Page 24: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/24.jpg)
Part2. Definition and purposes of the internal control (Para.5-9)
Internal control is the organizational plan and all the related measures that an entity adopts to:
(1) safeguard the assets the business uses in its operations
![Page 25: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/25.jpg)
Part2. Definition and Purposes of the internal control (Para.5-9)
(2) encourage adherence to company policies
(3) promote operational efficiency (obtain the best outcome at the lowest cost)
(4) ensure accurate and reliable accounting records
![Page 26: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/26.jpg)
Part3. How can internal controls be most effective? (Para.10-14)
(1) Internal controls are most effective when employees at all levels adopt the organization’s goals and ethical standards.
(2) Two characteristics of an effective system of internal control.
![Page 27: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/27.jpg)
Part3. How can internal controls be most effective? (Para.10-14)
a. Competent, reliable and ethical employees.
b. Clear definition of duties and assignment of responsibilities.
![Page 28: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/28.jpg)
Comprehension of Text B.
*venerable: deserving respect because of age, character, associations, etc.
e.g. Columbia was a young city compared with venerable Charle
ston. He is a venerable old man with white h
air.
![Page 29: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/29.jpg)
Comprehension of Text B.
*bring … to its knees: force somebody to submit; almost completely destroyed something
e.g. The country was being brought to its knees by the loss of 2.4 million manufacturing jobs.
![Page 30: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/30.jpg)
Comprehension of Text B.
securities: stocks, shares, bonds, or other certificates that you buy in order to earn regular interest from them or to sell them later for a profit
e.g. government securities: money lent to a government
![Page 31: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/31.jpg)
Comprehension of Text B.
audit: [v]or [n] examine the accounts officially in order to make sure that they have
been done correctly e.g. Each year they audit our accounts and certify them as
being true and fair.
![Page 32: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/32.jpg)
Comprehension of Text B.
The bank first learned of the problem when it carried out an internal audit.
![Page 33: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/33.jpg)
Comprehension of Text B.
auditor: accountant who officially examines the accounts of organizations
e.g. Auditors said they had uncovered evidence of fraud.
![Page 34: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/34.jpg)
Comprehension of Text B.
adhere to: stick fast to: ① Glue and paste are used to make one surface adhere to another.
②remain faithful to; support firmly: He urged them to adhere to the values of Islam which defend the dignity of man.
![Page 35: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/35.jpg)
Comprehension of Text B.
payroll: list of persons to be paid and the amounts due to each
e.g. They had 87,000 employees on the payroll.
![Page 36: Text A — Accounting: The Basis for Business Decision](https://reader030.vdocument.in/reader030/viewer/2022032612/56649ea75503460f94ba9882/html5/thumbnails/36.jpg)
Comprehension of Text B.
*depreciation: lessening of value or estimation
e.g. Inflation is rising rapidly; the yuan is depreciating.