Exercises

1. Answer the questions.

1. What role does an accounting system play in an economy?

2. Into what phases is accounting broken down?

3. What is accounting equation?

4. What is the most widely practiced principle of bookkeeping?

5. What does the balance sheet list?

6. What is shown in the income statement?

2. Find in the text English equivalents for the following Ukrainian phrases:

Ключовий елемент економічної діяльності; фінансові результати господарчої діяльності суб’єкта, який господарює; угоди, в які вступають різні організації; отримання, опрацювання та передача інформації; відображення інформації у фінансовій звітності; працювати з прибутком; виконувати

свої зобов’язання; бухгалтерське рівняння; активи повинні бути рівними пасивам; у балансі відображаються; облік по принципу подвійного запису; відображати у балансі, складати баланс; рахунок прибутків та збитків.

3. Think of the English synonyms to these Ukrainian verbs: относить (на), отражать (в учете), учитывать.

4. Think of the words describing characteristics that make information useful.

5. Think of the nouns that are most often used with the following verbs:

to measure, to ensure, to communicate, to prepare, to debit, to credit, to draw up, to disclose, to report;

6. Match the verbs from (a) with the nouns from (b) below:

a) To meet b) provision of information

To ensure needs

To harmonize standards

To develop performance

To assess service

To provide a boost

To give license

To enhance accounting standards

To grant targets

To achieve credibility

7. Make up sentences putting the words in the correct order.

1. The, subject, accounting, of, is, results, of, the, financial, the, calculation, of, an, business, economic, entity’s, activity.

2. Accounting, be, divided, can, three, phases, into.

3. The, is, first, phase, bookkeeping.

4. Accounting, based, is, equation, accounting, on, the.

5. Balance, income, sheet, statement, are, main, types, two, of, statements, financial.

6. Balance, are, sheet, up, drawn, periodically.

7. The, system, double, entry, of, consists, the, the, side, side, credit, debit, and.

8. The, objective, statement, of, the, financial, is, to, useful, provide, for, users, information.

8. Complete the sentences with the following words: accounting, bookkeeping, accounting equation, balance sheet, income statements, accounting, the accounting system, financial statements, principle of double entry bookkeeping, accounts, the double entry system.

1. The process of capturing financial information and recording it, is called…

2. The subject of …..is the calculation of the financial results of an economic entity's business activity.

3. …….lists a firm's assets, liabilities and owner's equity at a point of time.

4. ........states that a firm's assets must equal its liabilities plus its owners' equity.

5. A firm's sales, costs, and profits for a given period are shown in an…. .

6. ……in any given country is one of the key elements of the economic system.

7. ….is based on the accounting equation.

8. ………states that each transaction must be recorded on the balance sheet as two separate entries so that the accounting equation will hold at all times,⁸ 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.

9. The two main types of …….are the balance sheet and the income statement (profit and loss account).

10. …….can be prepared either on a cash or accrual basis.

11. …….divides each page into two halves.