Managerial Accounting

Date: 2015-10-07; view: 414.

Ex.2.Read and translate the text A

II. Reading

Financial Accounting

Accounting is the language of business. It is the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and all users the information they need to make better decisions. Accounting can be divided into two major categories: managerial accounting and financial accounting.

Managerial accounting is used to provide information and analyses to managers within the organization to assist them in decision making. Managerial accounting is concerned with measuring and reporting costs of production, marketing, cost accounting. Management accountants also set up a system of internal control to increase efficiency and prevent fraud in their companies.

They aid to profit planning and cost control. It is their duty to see that a company has good records, prepares, proper financial reports and complies with tax laws and government regulations.

The questions that Managerial accounting reports are to answer include the following:

- What goods and services are selling the most and what promotional tools are working best?

- How quickly are we selling what we buy, and how does that compare with other firms in the same industry?

- How much profit is the firm making and does that compare favorably with other firms? If not, why not?

- What are our major expenses and are they in line with what other firms spend?

- How much money are we paying in taxes, and how can we legally minimize that amount?

Because of their broad view of all aspects of a company's operations management accounts often have an important effect on management decision making.

Thus Managerial Accounting information is essential to the decision-making system because it provides quantitative information for three functions: planning, control and evaluation.

Management Accounts are known to keep up the latest developments in the uses of computers. Computers make record keeping 100% easier and enable company owners to follow the progress of the business (sales, expenses, profits) on a daily basis, if necessary. Computer system helps with inventory control, customer records and payroll. A good accountant is invaluable in setting up such systems and showing you how to keep the system operating smoothly. Many business failures are caused by poor accounting practices.

Financial accounting differs from managerial accounting because the information and analyses are for people outside the organization. This information goes to owners and prospective owners, creditors and lenders, suppliers, government units and the general public. These external users are interested in the organization's profits, its ability to pay its bills and other financial information. Much of the information is contained in the annual report, a statement of the financial condition and progress of the organization. Financial accounting reports answer such questions as following:

- Has the company's income been satisfactory?

- Should we invest in this company?

- Should we loan in this company? Will it be able to pay the money back?

- Can the company afford to raise its salaries?

Now we hope you are getting the idea that accounting is critical to business and to anyone who wants to understand business.

Ex.3. Find in the text sentences where the following words and word combinations are used. Translate these sentences:

Transactions, decision making, cost accounting, to prevent fraud, tax laws, payroll, lenders, to loan.