Учебнометодическое пособие Петрозаводск 2010 ббк 81. 2Англ удк 811. 11 Г 613 Рецензенты
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Management accounting is also associated with the advent of industrial capitalism, for the Industrial Revolution of the 18th century presented a challenge to the development of accounting as a tool of industrial management. In isolated cases there were some, notably Josiah Wedgwood, who developed costing techniques as guides to management decisions. But the practice of using accounting information as a direct way to management was not one of the achievements of the industrial revolution: this new role for accounting really belongs to the 20th century. Certainly, the genesis of modern management with its emphasis on detailed information for decision making provided a tremendous impetus to the development of management accounting in the early decades of the 20th century, and in so doing considerably extended the boundaries of accounting. Management accounting shifted from recording and analyzing financial transactions to using information for decisions affecting the future. In so doing, it represented the biggest surge forward in seven centuries. The advent of management accounting demonstrated once more the ability and capacity of accounting to develop and meet changing socio-economic needs. Management accounting has contributed in a most significant way to the success with which modern capitalism has succeeded in expanding the scale of production and raising standards of living. The social welfare viewpoint of accounting is an entirely new phase in accounting development which owes its birth to the social revolution which has been underway in the Western world in the end of the 20th century. One aspect is social responsibility accounting which widens the scope of accounting by considering the social effects of business decisions as well as their economic effects. The demand for social responsibility accounting stems from an increasing social awareness of the undesirable by-products of economic activities, and in this connection, one may point to the attention given to environmental problems over the last years. Increasingly, management is being held responsible not only for the efficient conduct of business as expressed in profitability, but also for what it does about an endless number of social problems. Hence, with changing attitudes, the time-honored standards by which performance is measured have fallen into disrepute. There is a growing consensus that the concepts of growth and profit as measured in traditional balance sheets and profit and loss accounts are too narrow to reflect what many companies are trying, or are supposed to be trying, to achieve. 3) Give your own examples to the main ideas expressed in the text. 4) Make up a brief outline of the text. 6.32.3 BASIC ACCOUNTING CONCEPTS 1) Look at the heading and the words in the table in the text and say what this text is about. Have you ever come across any of these ideas in your profession or life? 2) Match the concepts and their definitions:
3) Answer the questions: a) What do the assets of a business comprise? b) What assets are not mentioned in balance sheets? c) When do liabilities arise? d) What is the difference between revenue and profit? The establishment of concepts is very important to the development of a theoretical framework. Accounting concepts are used to describe the events that comprise the existence of business of every kind. For this reason accounting is often characterized as “the language of business.” The basic concepts listed in the table below provide the essential material of accounting theory.
Assets are things of value which are possessed by a business. In order to be classified as an asset the money measurement convention demands that a thing must have the quality of being measurable in terms of money. The assets of a business comprise not only cash and such property as land, buildings, machinery and merchandise, but also money which is owed by individuals or other enterprises (called debtors) to the business. Often the major asset of a highly successful firm is the knowledge and skill created as a result of teamwork and good organization. This asset will not appear in the accounts, since the firm has paid nothing for it, except in terms of salaries which have been written off against yearly profits. So, the value of the human assets of the firm is not mentioned in balance sheets. However, it is universally recognized that the firm’s human assets are its chief source of wealth. Yet, it is only recently that accountants have begun to recognize this fact, and efforts are now being made to find ways in which information on the value of human assets may be most appropriately presented. There are other important assets of which no mention is made in financial accounting statements, for example, the value of the firm on the market and the value of the firm’s own information system, which affects the quality of its decisions. Liabilities are the amounts owned by the business. Most firms find it convenient to buy merchandise and services on credit terms rather than to pay cash. This gives rise to liabilities known as trade creditors. Liabilities arise also when a firm borrows money as a means of supplementing the funds invested by the owner. The reason why amounts of money owed to the creditors by a business are known as liabilities is that the business is liable to them for the amounts owed. Capital is the excess of assets over liabilities and represents the owner’s investment in the business. The assets of a business must always be equal to the liabilities and the owner’s capital. This is the result of double-entry bookkeeping, whereby each transaction has a two-fold effect. Revenue is earned by a business when it provides goods and services to customers. Whereas a trading business will derive revenue mainly from the sale of merchandise, a business which renders services, such as a solicitor, will derive revenue as a result of charging for the service. It is not necessary for a business to receive cash before recognizing that revenue has been earned. The accrual convention recognizes revenue which arises from the sale of goods or services on credit. Expenses are incurred in earning revenue. Examples of expenses are wages and salaries paid to employees and rent paid to the landlord. If expenses are not paid when they are incurred the amount is recorded as a liability. Profit results when the total revenue of a business for a certain period, such as a year, exceeds the total of the expenses for that period. Profit accrues to the owner of the business and increases his investment. The increase is reflected in the owner’s capital, being a liability due to him. Transactions are events which require recognition in the accounting records. They originate when changes in basic concepts are recorded. A transaction is financial in nature and is expressed in terms of money. Accounting conventions determine the rules which are applied to accounting procedures. Accounting conventions are continually being adapted to meet the changing demands of business, and at any point in time there may be more than one accepted way of treating a particular class of transaction. A thorough knowledge of these conventions is necessary for a complete understanding of financial statements. If accountants as a group wish to change some of their conventions, they are free to do so. The term “accounting conventions” serves to underline the freedom accountants have enjoyed in determining their own rules. 6.32.4 ACCOUNTING AS AN INFORMATION SYSTEM 1) Look at the phrases, taken from the text: a series of activities, collecting, recording, analyzing, communicating information, data organized for a special purpose, decision making, to transform, to influence, a social science, input, processing, output, to facilitate. What do they mean? 2) Name the statements that are true: a) accounting is a series of steps such as collecting, recording, analyzing and communicating information, b) accounting has the typical activities of systems: input, processing and output, c) data are used for decision making, d) accounting is a social science, e) application of systems analysis is extremely rare in accounting. Accounting is often analyzed as a series of activities which are linked and form a progression of steps, beginning with observing, then collecting, recording, analyzing and finally communicating information to its users. We may say, therefore, that accounting information has a special meaning in that it is data organized for a special purpose, that is, for decision making. The task of the accountant is to transform raw data into information. Data itself is simply a collection of facts expressed as symbols and characters which are unable to influence decisions until transformed into information. Conventions existing among accountants for the treatment of data give a distinctive character to accounting information. Accounting is a social science which lends itself easily to analysis as an information system, for it has all the attributes of a system. It has a basic goal, which is to provide information, and it has clear and well-defined elements in the form of people and equipment. Moreover, accounting has the typical activities of systems, consisting of input, processing of input and output. The application of systems analysis to the treatment of accounting facilitates the study of accounting as a social science, and enables to examine its various activities in terms of the relevance of its output for decision-making purposes. 6.32.5 CASH 1) Do you prefer to keep cash on hand or in a bank? Why? 2) Read the text and answer the questions: a) Why do firms bank large sums of money daily? b) What do they use for the settlement of debts? c) Who is usually entrusted with a petty cash box? d) What is a petty cash voucher? e) Who signs a petty cash voucher? For security reasons, few firms like to keep large sums in cash about their premises and cash takings are banked daily. Moreover, it is sound practice to use cheques for the settlement of debts, so that there is generally no need to keep cash on hand beyond relatively small sums. All firms, therefore, tend to have a petty cash box to meet any immediate need for cash for example, enabling a secretary or porter to take a taxi to deliver a document, or to buy a small article which is urgently required. The cashier is usually entrusted with a petty cash box and any payments must be claimed by means of a petty cash voucher signed by an authorized person, who is usually a head of department. The cashier is given a petty cash float which may be, say, £50 and pays out petty cash only against petty cash vouchers, which he retains. As the petty cash float decreases, so petty cash vouchers of an equivalent value accumulate in the petty cash box. In due course, the vouchers are checked or audited and the petty cash paid out is refunded to the cashier, thereby restoring the petty cash float to its original sum. UNIT 7 LAW 7.1 The Government and Policy of the Russian Federation 1) Read the text and translate it into Russian. According to the Constitution, which was adopted by national referendum on 12 December 1993 following the 1993 Russian constitutional crisis, Russia is a federation and formally a semi-presidential republic, wherein the President is the Head of state and the Prime Minister is the Head of government. The Russian Federation is fundamentally structured as a representative democracy. The federal government is composed of three branches: Legislative: The national legislature is the Federal Assembly, which consists of two chambers: the 450-member State Duma and the 176-member Federation Council. The bicameral Federal Assembly adopts federal law, declares war, approves treaties, and has the power of impeachment, by which it can remove the President. The government is regulated by a system of checks and balances defined by the Constitution of the Russian Federation, which serves as the country’s supreme legal document and as a social contract for the people of the Russian Federation. Executive: Executive power is exercised by the government. The President is the commander-in-chief of the military. He can veto legislative bills before they become law, and he appoints the Cabinet and other officers, who administer and enforce federal laws and policies. The President is elected by popular vote for a six-year term (eligible for a second term but constitutionally barred for a third consecutive term). Ministries of the government are composed of the Premier and his Deputies, Ministers, and selected other individuals; all are appointed by the President on the recommendation of the Prime Minister (whereas the appointment of the latter requires the consent of the State Duma). Judiciary: The Constitutional Court, the Supreme Court, the Supreme Court of Arbitration and lower federal courts, whose judges are appointed by the Federation Council on the recommendation of the President, interpret laws and can overturn laws they deem unconstitutional. According to the Constitution, constitutional justice in the court is based on the equality of all citizens, judges are independent and subject only to the law, trials are to be open and the accused is guaranteed a defense. Since 1996, Russia has instituted a moratorium on the death penalty in Russia, although capital punishment has not been abolished by law. Leading political parties in Russia include United Russia, the Communist Party, the Liberal Democratic Party of Russia, and Fair Russia. 2) The text contains a number of words to describe the structure of the Russian Federation. How many can you find? 3) Look at the phrases taken from the text. What do they mean? a) according to the Constitution; b) national referendum; c) a semi-presidential republic; d) a representative democracy; e) the 450-member State Duma; f) the 176-member Federation Council; g) the bicameral Federal Assembly; h) a system of checks and balances; i) is elected by popular vote; j) judges are independent and subject only to the law; k) leading political parties. 7.2 FROM The Constitution of the Russian Federation 1) Read and say what new facts you have learnt from the text. CHAPTER 7. JUDICIAL POWER Article 118 1. Justice in the Russian Federation shall be administered by courts alone. 2. The judicial power shall be exercised by means of constitutional, civil, administrative and criminal proceedings. 3. The judicial system of the Russian Federation shall be instituted by the Constitution of the Russian Federation and the federal constitutional law. The creation of extraordinary courts shall not be allowed. Article 119 1. Judges may be citizens of the Russian Federation over 25 years of age with a higher education in law and a law service record of not less than five years. The federal law may introduce additional requirements for judges of the courts of the Russian Federation. |