The types and the titles of accounts

IV. Read the first paragraph of the text again to decide which of the following statements expresses its main idea.

1. The double-entry system is a backbone of accounting.

2. The double-entry system was a pre-condition of rapid economic development.

3. The importance of the double-entry system lies in the fact that its use made accounting records more comprehensive.

V. Read the second paragraph, then complete the following sentences.

1. According to the text, the first book in Britain on the double-entry system ….

2. It was written by ….

3. No copy of this book ….

4. Later some more books on the double-entry system....

5. English businessmen began....

6. The advantage of double-entry lies in the fact that....

VI. Answer the following questions.

1. What is the double-entry system for accounting? When did it evolve?

2. When did the first presentation of the double-entry appear?

3. What was the importance of the double-entry system?

4. What was the state of affairs in accounting before the invention of the double-entry system?

5. What was the impact of the double-entry system on economic development of a country?

6. When was the first book on the double-entry system published in Britain?

7. What was the advantage of double-entry according to many historians of accounting?

8. Why is the double-entry system always in balance as a whole?

VII. Find in the text English equivalents to the following words and word combinations.

система подвійного запису

обліковий запис

торговець

позитивно впливати на торгівлю

швидкий економічний ріст

економічний розвиток

застосовувати цей спосіб запису

знаходитися у рівновазі

принцип подвійності

VIII. Translate the following sentences in English.

1. Система подвійного запису – основа бухгалтерського обліку – розвинулась в епоху Ренесансу.

2. Техніка подвійного запису зробила облікові записи більш зрозумілими та впорядкованими.

3. Застосування цієї техніки мало позитивний вплив як на комерційну діяльність, так і на торгівлю.

4. У середньовіччя знання системи подвійного запису було передумовою швидкого економічного розвитку більшості європейських країн.

5. Згідно з принципом подвійності всі економічні явища мають два аспекти.

UNIT 2

THE TYPES AND THE TITLES OF ACCOUNTS

I. Read the following terms. Try to memorize them and use in your speech.

GLOSSARY

1.	data	дані
2.	information storage	зберігання інформації
3.	information retrieval	пошук інформації
4.	filing system	система реєстрації (документів)
5.	to sort out = to classify	класифікувати
6.	financial statement	фінансовий звіт
7.	account	рахунок
8.	assets	активи
9.	liabilities	пасиви
10.	owner’s equity	власний капітал
11.	entry	запис
12.	credit entry	кредитний запис
13.	debit entry	дебетовий запис
14.	ledger	гросбух
15.	chart of accounts	план бухгалтерських рахунків

II. What types of accounts do you know? Read the text to find out what sort of accounts different companies have.

1. When large amounts of data are gathered in the measurement of business transactions, a method of storage and retrieval of information is required. In other words, there should be a filing system to sort out or classify all the transactions of a business. Only in this way financial statements and other reports can be prepared quickly and easily.

2. This filing system consists of accounts. An account is the basic storage unit for data in accounting. In its simplest form an account has three parts: 1) a title that describes the asset, liability, or owner’s equity account, 2) a left side, which is called the debit side, and 3) a right side, which is called the credit side. This form of the account, called a T account because of its resemblance to the letter "T", is used to analyse transactions. It appears as follows:

Title of Account
Left or Debit Side	Right or Credit Side

3. Thus any entry made on the left side of the account is a debit, or debit entry, and any entry made on the right side of the account is a credit, or credit entry. The terms debit (abbreviated Dr, from the Latin debere) and credit (abbreviated Cr, from the Latin credere) are simply the accountant’s words for left and right.

4. There are different types of accounts. The most commonly used ones are as follows: Asset Accounts, Liabilities Accounts and Owner’s Equity Accounts. In a manual accounting system each account is kept on a separate page or card. These pages or cards are placed together in a book or a file. This book or file, which contains all groups of the company’s accounts, is called a ledger. In a computer system, which most companies have today, the accounts are maintained on discs. To find an account in the ledger easily and to identify accounts when working with accounting records, accounts are numbered. A list of these accounts is usually called a chart of accounts.

5. Different companies have different chart of accounts. Every company develops a chart of accounts for its own needs. The specific accounts used by a company depend on the nature of the company’s business. A steel company will have many equipment and inventory accounts, whereas an advertising company may have few. Each company must design its accounts in a way that reflects the nature of the business and the needs of its management in directing that business.

III. Which of the following statements are correct?

1. As a rule, all the transactions of a business are sorted out and classified in a filing system consisting of accounts.

2. The basic storage unit for data in accounting is a financial statement.

3. The right side of an account is called the credit side.

4. The simplest form of an account has four parts.

5. Any entry made on the left side is called a credit.

6. A book or a file containing all or some groups of accounts is called a ledger.

7. As a matter of fact, accounts used by a company never depend on the nature of the company’s business.

8. Accounts are always numbered and that makes it possible to find an account in the ledger easily.

IV. Reread the text to find out which of its paragraphs deals with:

1) the form and structure of an account;

2) different types of accounts;

3) the organisation of accounts in a ledger;

4) different charts of accounts in different companies.

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