会计英语阅读资料.doc

The Nature of Accounting Accounting is often called the “language of business”. A language is a means of social communication and involves a flow of information from one person to one or more other persons. To be effective, the receiver of the information must understand the message that the sender intends to convey. Accounting uses its own special words and symbols to communicate financial information that is intended to be useful for economic decision-making by managers, shareholders, creditors and many others. As you study accounting, you must learn the meanings of these words and symbols if you want to understand the messages contained in financial reports. Everyone involved in business, from the beginning employee to top manager, eventually uses accounting information in decision-making process.The importance of understanding accounting information is not restricted to those engaged directly in business. Many people with little knowledge of accounting must interpret accounting data. For example, lawyers must understand the meaning of accounting information if they are to represent their clients effectively, marketing consultants must aware of the costs of developing advertising campaigns, and engineers and architects must consider cost data when designing equipment and buildings. In fact, every person engages in transactions dealing with the financial aspects of life. Thus, accounting plays a significant role in society and, in a broad sense, everyone is affected by accounting information. The better you understand the language, the better you can manage the financial aspects of living.Early definitions of accounting generally focused on the traditional record-keeping functions of the accountant. In 1941, the American Institute of Certified Public Accountants (AICPA) defined accounting as the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results therefore. The modern definition of accounting, however, is much broader. In 1970, the AICPA stated that the function of accounting is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.The modern accountant, therefore, is concerned not only with record keeping but also with a whole range of activities involving planning and problem solving, control and attention directing; evaluation, review, and auditing. The new focus of accounting is on the ultimate needs of those who use accounting information, whether these users are inside or outside the business itself. So accounting is an information system that identifies, measures and records business activities, processes the information of those activities into reports and financial statements, and communicates these findings to decision-makers. Financial statements are the documents that report on an individuals or an organizations business in monetary amounts.In our business making a profit? Should we start up a new line of womens clothing? Are sales strong enough to warrant opening a new branch outlet? The most intelligent answers to the business questions like these are based on accounting information. Decision-makers use the information to develop sound business plans. As new programs affect the businesss activities, accounting takes the companys financial pulse rate. The cycle continues as the accounting system measures the results of activities and reports the results to the decision-makers.Bookkeeping is a procedural element of accounting as arithmetic is a procedural element of mathematics. Increasingly, people are using computer to do much of the detailed bookkeeping work at all levels-in households, business, and organizations of all types.It is important to clarify the relationships of accounting to bookkeeping and the computer to avoid certain misunderstanding about accounting. People often fail to understand the difference between accounting and bookkeeping. Bookkeeping, which is a process of accounting, is the means of recording transactions and keeping records. Mechanical and repetitive, bookkeeping is only a small, simple part of accounting. Accounting, on the other hand, includes the design of an information system that meets users needs. The major goal of accounting is the analysis, interpretation, and use of information. Accountants look for important relationships in the figures they produce. They are interested in finding trends and studying the effects of different alternatives. Accounting includes system design, budgeting, cost analysis, auditing, income tax preparation or planning and computer programming. The computer is an electronic tool that can collect, organize, and communicate vast amounts of information with great speed. Accountants have been among the earliest and most enthusiastic users of computer. Before the age of computers, the millions of transactions of large organizations had to be recorded by hand. It often took months to produce financial reports that now take days or hours. Although it may appear that the computer is doing the accountants job, it is in fact only a tool that is instructed to do the routine bookkeeping operations. Because it is important that the user of accounting and the new accountant understand the processes underlying accounting, most examples in this book are treated from the standpoint of manual accounting. You should remember, however, that in practice most large accounting operations are now computerized.The History and Development of AccountingAccounting has a long history. Some scholars believe that writing arose in order to record accounting information. Accounting records date back to the ancient civilizations of China, Greece and Egypt. The rulers of these civilizations used accounting to track the costs of labor and materials used in building structures such as the great pyramids. The need for accounting has existed as long as there has been business activity.Double-entry bookkeeping developed in Europe in the Middle Ages to serve a stewardship role when the functions of ownership and management became separated. Accrual accounting became established as debt was more reliably. The growth of large projects spanning long time periods in the Industrial Revolution led to the development of depreciation accounting and other methods of averaging over time for the purpose of the periodic measuring of profit. Over the last 150 years, laws have been progressively introduced to provide for greater disclosure of financial information.The functions of accounting have increased with the rapid development of management science. Besides accounting and reporting financial information that shows an organizations financial position and results of its operations to its interested users, accounting provides the management inside an organization with the accounting information needed in the organizations internal decision-making that relates to planning, control, and evaluation within an organization. The process of generating and analyzing such accounting information for internal decision-making is often refered to as managerial accounting and the related information reports being prepared are called internal management reports. As contrasted with financial accounting, managerial accounting is not governed by generally accepted accounting principles.The growth of organizations, changes in technology, government regulation, and the globalization of economy during the twentieth century have spurred the development of accounting. As a result, a number of specialized fields of accounting have evolved in addition to financial accounting and managerial accounting, which include auditing, cost accounting, budgetary accounting, governmental and non-for-profit accounting, human resources accounting, environmental accounting, social accounting, international accounting, etc.Users of Accounting InformationIndividual often keeps accounting records to aid decision-making. Accounting and accounting information are used more than commonly realized. The following sections discuss the range of people and group who use accounting information and the decisions they make.Individual uses accounting information in day-to-day affairs to manage their bank accounts, evaluate job prospects, make investments, and decide whether to rent or buy a house.Managers of businesses use accounting information to set goals for their organizations, evaluate their progress toward those goals, and take corrective action if necessary. Decisions based on accounting information may include which building and equipment to purchase, how much merchandise inventory to keep on hand, and how much cash to borrow.Investors and creditors provide the money that businesses need to begin operations. To decide whether to help start up anew venture, potential investors evaluate what return they can reasonably expect on their investment. This means analyzing the financial statements of the new business. Those people who do invest monitor the progress of the business by analyzing the companys financial statements and by keeping up with its developments in the business press. Accounting reports are a major source of information for the business press. Before making a loan, potential lenders determine the borrowers ability to meet scheduled payments. This evaluation includes a projection of future operations, which is based on accounting information.Government Regulation Agencies ask that businesses, which sell their shares or borrow money from the public, disclose certain financial information to the investing public. They base their regulatory activity in part on the accounting information they receive from the firms that they watch over.Taxing Authorities levy taxes on individual and businesses. The amount of the tax is figured using accounting information. Businesses determine their goods and services tax and sales tax based on their accounting records that show how much they have sold. Individuals and businesses compute their income tax based on how much money their record show they have earned.Nonprofit Organizations such as churches, hospitals, government agencies and colleges, which operate for purposes other than to earn a profit, use accounting information in much the same way that profit-oriented businesses do, that is, to manage and control their operations. Both profit organization and nonprofit organizations deal with budgets, payrolls, rent payments, and the like-all from the accounting system.Other users such as employees and labor unions may make wage demands based on the accounting information that shows their employers reported income. Consumer groups and the general public are also interested in the amount of income that businesses earn. For example, during times of fuel shortages, consumer groups have charged that oil companies have earned obscene profit. On a more positive note, newspapers may report improved profit pictures of major companies as the nation emerges from an economic recession. Such news, based on accounting information, is of widespread interest because it covers the economic activity that affects our standard of living.The Accounting SystemThe basic structure of an accounting system, which is rather simple in nature, has five parts of Classifications: (1) asset, (2) liabilities, (3) owners equity, (4) revenues, (5)expenses.An asset is anything of value that is owned by a business or an individual, the value of which is determined by the acquisition price, or historical cost, of the item. Liabilities represent the debts owed to others known as creditors and are referred to as “payables”, i.e. claims by creditors. Accounts refer to these claims, together with the claims by owners, as the equities of a business. Owners equity represents the portion of the assets that belongs to the owner of the business. It is the net asset of a business, which is the difference between the amount of the asset owned and the amount of the liabilities owed by a business. Revenues represent asset coming into the business from the performance of a service or the sales of a product to a customer for cash or on credit .In some cases, however, realization of revenue may simply mean the discharge of a debt owed by the business. Expenses represent assets that are used, consumed, or worn out as a result of employing them in the business for the purpose of earning revenue. Expenses are often referred to as “the cost of doing business”, which decrease the net asset in the business.The first three classifications of the accounting structure assets, liabilities ,and owners equity form the basic accounting equation or balance sheet equation ,which is expressed as follows:Asset = Liabilities + Owners equity Items of = amount owed or + capital invested by value owned creditors claim owner or owners on assets claim on assetsSome activities or the day-to-day events of a business are known as transactions .Every business will usually have financial transactions as well as non-financial ones. From an accounting standpoint, we are only concerned with the financial transactions of the business, which involve the performance of a service or the sale of a product to a customer, or the acquisition of service or materials from a creditor. Every transactions of a business affects the assets andor equities (liabilities or owners equity) .Each business transaction will result in one of the following:1, Increase one asset and decrease another asset2, Decrease one equity and increase another equity3, Increase an asset and increase an equity4, Decrease an asset and decrease an equity One of the direct effects of the accounting equation mentioned above is the double entry system of recording, which simply means that both sides, or the two-fold effects, of a business transaction are recorded. And when you record both sides of a business transaction, you are keeping the books in balance. F or example, if supplies were purchased for $200 from a supplier on credit, a business would own supplies costing $200 and owe the creditor $200 for the purchase on account.Both sides of the transaction would be recorded, and that result in an increase to Supplies (asset). And an increase to the Accounts Payable (liabilities) for the purchase, and eventually a balance in books.The easiest way to keep a record of business transactions is to record them when there is an exchange of cash .This is the cash system ,or the cash basis of accounting .For example ,when a business performs services to customers ,the revenue earned would be recorded when cash is actually received .therefore ,only cash sales would be recorded as revenue earned for a period ,whereas sales on account or charge sales would not be recognized until the customer paid the account .A more meaningful method used by most business is called the accrual system, or the accrual basis of accounting, which recognizes revenue when earned regardless of when the cash is received .A sale on account is recorded as revenue earned though the cash has not been received. Expenses for the period are recognized, when they are incurred even if they have not been paid.The result of business transactions are summarized and reported to various users at the end of a certain period of time ,known as a accounting period .The most common accounting period is the fiscal year ,consisting of a 12-month period which may or may not be the same as a calendar year .It is also common to account for a fiscal period of less than one year, such as one month (monthly) or three months (quarterly).Each business entity determines its own financial reporting needs ,but it is a requirement by the federal government that all business prepare an annual or fiscal year report, known as the general purpose external financial report.New Word, Phrase, and Special Terms(1) accounting system .n. 会计系统；会计制度(2) equity .n. 权益，产权 (3) owners equity 业主权益，业主产权(4) acquisition price 购买价格；取得价格(5) debt .n. 债务，借款，欠款(6) creditor. n 债权人，债主(7) payable .n. 应付的(8) payables .n. （复）应付账款，应付项目(9) claims .n. 要求权；(10) dissolve .vt. 解散；使终止(11) dissolution .n. 解散(12) cash .n. 现金；现款(13) balance .n.（缩写为） 余额，结余；差额；平衡(14) amount 缩写为.n. 金额；合计；共计(15) credit .n. 信用；信誉；贷方；贷项(16) to sell (buy)on credit .n. 赊销（购）(17) accounting equation 会计等式，会计方程式，会计恒等式(18) balance sheet equation 资产负债表，平衡表等式(19) material 原料，材料，物资(20) capital 资本(21) financial transaction 财务事项，会计事项(22) double-entry system of accounting 复式记账法，复式记账系统(23) account payable 应付账款 (24) cash system (basis) of accounting 现收现付制会计，收付实现制会计，现金制会计(25) charge sales 赊销，记账销售，赊账销售(26) accrual system (basis) of accounting 权责发生制会计；应计制会计(27) accounting period 会计期间(28) fiscal year 财务年度，财政年度(29) accounting year 会计年度(30) calendar year 日历年度(31) general-purpose external financial report 通用对外财务报告(32) account .n. 账户、科目、账目；（英）报表Accounting CycleOnce the appropriate adjusting entries have been made and posted to the ledger accounts, an income statement and balance sheet can be prepared directly from the account balances. In actual practice, however, many accountants fin