Unit 13 Accounting and financial statements.doc

Unit 13 Accounting and financial statements 1a Vocabulary: Match up the terms on the left with the definitions on the right. 1 B 2 C 3 D 4 G 5 A 6 E 7 F Bookkeeping: B) writing down the details of transactions (debits and credits) Accounting: C) keeping financial records, recording income and expenditure, valuing assets and liabilities, and so on Managerial accounting: D) preparing budgets and other financial reports necessary for management Cost accounting: G) working out the unit costs of products, including materials, labor and all other expenses Tax accounting: A) calculating an individual’s or a company’s liability for tax Auditing: E) inspection and evaluation of accounts by a second set of accountants ‘Creative accounting’: F) using all available accounting procedures and tricks to disguise the true financial position of a company 1b Listening You will hear Sarah Brandston, an accountant in New York, talking about bookkeeping and tax accounting. Read the following question and then listen to the interview. In which fields do most of Sarah Brandston’s clients work? She mentions graphic designers, media people, writers, film makers, architects, people who consult in the computer field, and people who work in music. Why do they need an accountant? She says that her clients are generally talented in their field, but they don’t necessarily know how to run a business, how to do bookkeeping, or how to keep accounting records that will allow them to file tax returns. What does Sarah Brandston describe as ‘the basic rule for accounting? Keeping records that reflect the financial life in the business accurately enough to enable one to file a tax return. An individual can do business as a self-proprietorship. Sarah Brandston mentions two other types of business. What are they? Corporations and partnerships. Sarah Brandston says ‘bookkeeping is really a common sense way of keeping track of the income and expenses’. What