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Am I an Accountant or a Bookkeeper? What is the difference?
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There are the important differences between an Accountant and a Bookkeeper and AAT (Accounting Technician), as well as differences and similarities between accounting and bookkeeping.
This is a common question of individuals performing day-to-day financial services for a company.
Most people, even accountants, don't know the answer to this question.
And, in most cases the answer doesn't matter. But, in those cases where someone wants to be technically correct the answer lies in what services a person performs. If a person is doing bookkeeping, he is a bookkeeper. If he is doing accounting, he is an accountant.
What is Bookkeeping?
There are eight steps in the bookkeeping cycle. A bookkeeper is a person that performs one or more of these steps or sometimes called AAT (accounting technicians). In large companies, for instance, the bookkeeping cycle can be divided into departments such as Accounts Receivable, Accounts Payable, or Payroll. While most often these people are referred to as "clerks", they may also be considered bookkeepers as they are "keeping the books" for a company. In small companies, the bookkeeper may perform the entire bookkeeping process, or might just enter data to give to the "accountant".
All bookkeeping steps are mechanical in nature. Bookkeeping is a regimented process usually occurring in monthly cycles consisting of entering transactions into the journals, making adjustments, and preparing reports. The Accounts Receivable Clerk is assigned to enter all sales on account, and all payments from the customers. The Accounts Payable Clerk's responsibility would be to enter purchase orders and checks. Again, in a small company, both duties are often performed by the same person.
Traditionally, the records were kept in a book, hence the name bookkeeping. Nowadays, bookkeeping is normally performed using a bookkeeping software package, but the names of the books (daybook, cashbook, journal, and ledger) are still used.
There are two types of bookkeeping: single-entry and double-entry. In single entry bookkeeping, the record of each transaction is carried to either the debit or credit column of a single account. In double-entry bookkeeping, two entries of each transaction are carried to the ledger: one to the debit side, and one to the credit side, of the corresponding account.
A bookkeeper's function is primarily one of recording transactions in the journal and posting to the ledger, and is sometimes referred to as an accounts clerk.
What is Accounting?
Someone has to set up the bookkeeping system, monitor it, and interpret the results. These processes are called "Accounting." The accounting process is much less mechanical and more subjective. It begins with designing a system that will benefit the business, by capturing the financial information in a useful manner without being too burdensome to the bookkeeper. The accountant monitors the system to ensure it's doing what it's supposed to do. And finally, on a monthly basis usually, the accountant presents the financial statements to the business management in such a way that decisions can be made.
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Since accounting requires an understanding of the bookkeeping process, accountants typically supervise the bookkeepers. In a large corporation there may be several, possibly even thousands of accountants. One will be designated as the "Controller" who oversees the entire accounting and bookkeeping system.
In a small business one person (a contract accountant or full charge bookkeeper) will perform all the phases of accounting and bookkeeping for a company. "Accountant" is considered to be a more prestigious title. An accountant is the person who is finally responsible for the result of the whole work. Accountants often specialize in a particular area of accounting such as taxes, auditing, or management.
- Choose the best title to the text.
- Bookkeeping as a part of accounting process.
- The differences between bookkeeping and accounting.
- Accounting requires an understanding of bookkeeping.
- An accounting cycle and two types of bookkeeping.
- Match the parts of the sentences.
- Bookkeeping steps a) the knowledge of bookkeeping
- In small business b). including entering transactions into the journals
- Bookkeeping is a process c) of a bookkeeping process
- Entries of each transactions d) one person is responsible for the accounting
- A contract accountant e) with taxes or auditing
- AAT perform one or two steps f) supervised by the accountants
- Accountants can work g) is widely used nowadays
- The bookkeepers are typically h) are carried to the ledger
- A bookkeeping software package i) are mostly mechanical in nature
- Accounting requires j) can perform all phases of accounting
- Find in the text the sentences with Passive Voice and translate them.
- Fill in the gaps in the sentences using the words and word combinations from the box:
- Capital markets rely on the useful and accurate … ….
- One of the most … … of accounting is to communicate information between producers and users.
- Accounting information can be developed for any kind of ….
- … … deals with the economic operations of entire nations.
- … is a chief accountant who oversees the entire accounting and bookkeeping system.
- There are … and similarities between accounting and bookkeeping.
- A person entering all sales, payments, purchase checks and orders is ….
- Accountant … a bookkeeping system.
- … can use an accounting information to determine the price to be paid.
- A bookkeeper enters … to give to an accountant.
_____________________________________________________________________________
monitor, differences, customers, international accounting, a bookkeeper, important purposes, organization, a controller, accounting information, data
_____________________________________________________________________________
12. Match the words with the appropriate definitions:
1. order a) a thing bought or the action of buying smth
2. purchase b) a book in which a firm records its
financial transactions
3. single-entry c) a dealership or a financial transaction in a
company
4. double-entry d) professional functions and obligations
5. daybook e) using only one column(debit or credit) in
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a ledger
6. cashbook f) an accounts clerk responsible for the whole
financial dealership
7. ledger g) a formal written instruction that allows the
holder to be supplied with goods
8. service h) using both columns(debit and credit) in a
ledger
9. duties i) a journal of daily transactions
10. a full charge bookkeeper j) a journal of receipts and expenditure
Translate Text C using a dictionary.
UNIT III
ACCOUNTING
- Pay attention to the correct pronunciation of the international words from the text below. Give their Russian equivalents without a dictionary. Remember that many English words in the same form can be translated as different parts of speech.
professional, public, private, sphere, balance, period, standard, uniformity, presentation, informative, summarize, efficiency, measure, consensus, series, classify, identify, document, chronological, dividend, partnership, list, date, calendar, capital, category, minus, principle.
- Translate the following noun combinations:
management levels, equity issue, cost efficiency measures, tax management, a purchase order, sales journal, purchase journal, cash receipt journal, disbursement journal, ledger accounts, math error, cash flow, income statement, net income, dividend information, ownership equity, company expenses, deposit account
- Translate the following word combinations from the text:
a persistent demand, a body of rules, various users, levels of management, the preparation of financial statements and report, a corporate ladder, mergers and acquisitions, a series of activities, a reporting period, an accounting cycle, a recognizable event, an appropriate journal, a trial balance, adjusting entries, balance sheet, assets and liabilities, retained earnings, gains and losses, to make sure, a sole proprietorship, net assets, equity accounts
Grammar Revision: The Infinitive (Инфинитив)
FORMS OF INFINITIVE ( Формы инфинитива)
| Группа времен | Active Voice | Passive Voice |
| Simple | to do делать (вообще) | to be done быть сделанным (вообще) |
| Continuous | to be doing делать (в определенный момент) | _ |
| Perfect | to have done сделать (уже) | to have been done быть сделанным (до определенного момента) |
Функции инфинитива
I. Подлежащее
To choose a profession properly is very important.
Правильный выбор профессии очень важен.
II. Определение
Here are the managers to choose new clerks for the office.
Вот менеджеры, которые будут отбирать новых сотрудников для офиса.
III. Обстоятельство цели
To choose a profession you should have a clear idea of it.
Чтобы выбрать профессию, вы должны иметь о ней ясное представление.
Часто используется выражение in order to - для того чтобы.
In order to choose a profession you should have a clear idea of it.
- Translate the sentences with Infinitive:
- There is a body of rules established in accounting to make financial data more informative.
- To avoid double counting is important for saving a working time of the accountants.
- To avoid double counting accountants prepare reversing journal entries.
- A balance sheet to have been presented by the 1-st of April is prepared.
- The accountants worked hard to have prepared a balance sheet promptly.
- Managers discussed possible decisions to be made next month.
- Managers were delighted to be making a proper decision.
- This accountant is quite experienced to control the entire work.
- The Controller says to have been working in that company before his new appointment.
- In order to make sure that debits equal credits the trial balance is prepared.
INFINITIVE CONSTRUCTIONS (Инфинитивные обороты)
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COMPLEX SUBJECT ( Сложное подлежащее ):
подлежащее + сказуемое + инфинитив
Примеры:
Не is known to work in a big company.
Известно, что он работает в крупной компании.
The work proved to be useful.
Работа оказалась полезной.
В качестве сказуемого в этом обороте могут использоваться только определенные глаголы:
1) в Passive Voice– to report (сообщать), to say (говорить), to know (знать), to suppose (предполагать), to state (утверждать), to expect (ожидать), to consider (рассматривать), to believe (полагать), to think (думать), to find (находить)
2) в Active Voice – to seem, to appear (здесь: по-видимому), to happen (случается), to prove (здесь: оказывается), to be likely (вероятно), to be unlikely (вряд ли)
COMPLEX OBJECT ( Сложное дополнение ):
подлежащее + сказуемо е + существительное (в объектном падеже) + инфинитив
(Active Voice) /местоимение/
Пример:
We supposed them to work in the office.
Мы полагали, что они работают в офисе.
Глаголы, используемые в качестве сказуемого в этом обороте:
to know, to want, to suppose, to expect, to consider, to think, to find, to believe.
После глаголов, выражающих чувства, восприятие (to see, to hear, to feel, to watch и др.), частица to перед инфинитивом опускается:
We saw them work in the office.
Мы видели, что они работают в офисе.
FOR + NOUN /PRONOUN/ + INFINITIVE ( for + существительное + инфинитив )
/местоимение/
Пример:
For people to work better they should be interested in the results of their labor.
Чтобы люди работали лучше, они должны быть заинтересованы в результатах своего труда.
- Translate the sentences with Infinitive Constructions:
1. The accounting information is known to help managers in making proper decisions.
2. Premium is expected to be given to the best officials of the department at the end of the year.
3. Cost efficiency measures proved to be useful for the development of the company.
4. The practice of accounting is likely to arise for many thousands of years ago.
5. Accountants are believed to be involved in different levels of management.
6. For the accountants to work well they should know GAAP guide user.
7. The Chief Accountant informed the employees, that the Management wants them to work better.
8. Accounting is considered to be the systematic development and analysis of information about the economic affairs of an organization.
9. For the employees to improve their professional knowledge they should be regularly trained.
10. A new Chief Accountant is said to be introduced to other officials.
- Read Text C. Agree or disagree with the statements. Define: “true” or “false”.
1. Accounting is the process by which assets, liabilities, equity, income and expenses are monitored over a certain period of time.
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2. The accounting process begins with the record of a transaction and ends with the preparation of a balance sheet.
3. General standards used in presentation and reporting of financial information make them more relevant and informative.
4. The income statement is prepared from net income and dividend information.
5. Entries are not necessarily made in chronological order.
6. A standard balance sheet has four parts: assets, liabilities, ownership equity and expenses.
7. Accounting summarizes and interprets financial activities.
8. Accountants can’t be involved in the management of a company.
9. Net worth equals assets minus liabilities.
10. Accountants do not participate in cost efficiency measures.
Text C
The Accounting Profession
Accountants are business professionals serving the role of contributing to the success of business. Choosing to be an accountant can be a smart choice because of the persistent demand in both public and private spheres.
What is accounting and what do accountants really do?
It is the process by which assets, liabilities, equity, income and expenses are monitored over a certain period of time. Accounting is also a body of rules, conventions and general standards established for uniformity in presentation and reporting of financial information to make them more relevant and informative. Accounting entails capturing financial activities, summarize and interpret them for its various users.
Accountants are involved in different levels of management. From simple recording of transactions to preparation of financial statements and report, to business analysis and even to controllership, accounting professionals play an important part in a company. They participate in cost efficiency measures, consensus of mergers and acquisitions, total quality management, development of information systems and tax management.
The accounting process is a series of activities that begins with a transaction and ends with the closing of the books. Because this process is repeated each reporting period, it is referred to as the accounting cycle and includes these major steps:
1. Identify the transaction or other recognizable event.
2. Prepare the transaction's source document such as a purchase order or invoice.
3. Analyze and classify the transaction.
4. Record the transaction by making entries in the appropriate journal, such as the
sales journal, purchase journal, cash receipt or disbursement journal, or the general
journal. Such entries are made in chronological order.
5. Post general journal entries to the ledger accounts.
6. Prepare the trial balance to make sure that debits equal credits.
7. Correct any discrepancies in the trial balance. If the columns are not in balance, look for math errors, posting errors, and recording errors.
8. Prepare adjusting entries to record accrued, deferred, and estimated amounts.
9. Post adjusting entries to the ledger accounts.
10. Prepare the adjusted trial balance. This step is similar to the preparation of the unadjusted trial balance, but this time the adjusting entries are included. Correct any errors that may be found.
11. Prepare the financial statements.
-Income statement: prepared from the revenue, expenses, gains, and losses
-Balance sheet: prepared from the assets, liabilities, and equity accounts
-Statement of retained earnings: prepared from net income and dividend information
-Cash flow statement: derived from the other financial statements
12. Prepare closing journal entries that close temporary accounts such as revenues,
expenses, gains and losses.
13. Post closing entries to the ledger accounts.
14. Prepare the after-closing trial balance to make sure that debits equal credits.
15. Prepare reversing journal entries (optional) to avoid double counting the amount,
when the transaction occurs in the next period.
An important point of accounting is the preparation of a balance sheet. In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.
A standard company balance sheet has three parts: assets, liabilities and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities.
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Today, accounting is called “the language of business”. The body of rules that governs financial accounting is called Generally Accepted Accounting Principles, or GAAP.
- Read the statements below and choose the one that best expresses the central idea of the text.
1. The accounting profession is demanded both in public and private spheres.
2. A balance sheet is an important point of an accounting process.
3. Accounting is the process including a number of steps by which assets, liabilities, equity, income and expenses are monitored over a certain period of time.
4. In their work accountants keep within the body of rules that governs financial accounting.
- Match the parts of the sentences.
- Invoice, as well as a purchase order a) adjusting entries are prepared
- To make sure that debits equal credits b) are the parts of a balance sheet
- Assets and liabilities c) are made in chronological order
- The records of transactions d) in order of liquidity
- To record estimated amounts e) is called a balance sheet
- Net worth is the difference f) is the transaction's source document
- Assets are listed g) prepare the after closing trial balance
- A summary of the financial balances h) are the sources of an income statement
- Gains and losses i) serves to a business success
- The accounting profession j) between assets and liabilities
- Find in the text the sentences with Infinitive and Infinitive Constructions and translate them.
- Fill in the gaps in the sentences using the words and word combinations from the box:
1. Accountants … in total quality management.
2. Assets … by the liabilities in a balance sheet.
3. The accounting process begins with the … of a transaction.
4. The statement of retained earnings is prepared from … and dividend information.
5. Math errors can cause … in financial statements.
6. Accounting is a body of rules for … in reporting of financial information.
7. Accounting information can be performed for any kind of ….
8. A standard balance sheet has … parts.
9. Net worth is also called … or equity or the capital of the company.
10. GAAP is the body of rules … the financial accounting.
_______________________________________________________________________
discrepancies, organization, participate, three, net income, are followed, governing, uniformity, net assets, the identification
_______________________________________________________________________
- Match the words with the appropriate definitions:
1. invoice a) the state of owning things of value that can easily be
changed into cash
2. liquidity b) a sum withdrawn from an account
3. acquisition c) ownership, right of property
4. disbursement d) a debt, a financial obligation
5. debit e) a written document containing a short
specification and a price of goods
6. credit f) payment, expenditure
7. income g) a property owned by a company, that has value and can
be used or sold to pay debts
8. proprietorship h) a purchase or a process of buying
9. assets i) a sum recorded in receipts of a firm or a loan in a bank
10. liabilities j) receipts, profit, revenue
- Translate Text C using a dictionary.
UNIT IV
AUDIT
- Pay attention to the correct pronunciation of the international words from the text below. Give their Russian equivalents without a dictionary. Remember that many English words in the same form can be translated as different parts of speech.
Auditor, organization, project, product, concept, energy, conservation, goal, material, numerical, factor, associate, subject, safe, security, mission, objective, competent, accurate, examination, fact, legal, form, conductor.
- Translate the following noun combinations:
Project management, quality management, energy conservation, on a test basis, subject area, information systems performance, government agency, performance audit, mission objectives, security audit, informational systems audit, consultant auditor, staff augmentation
- Translate the following word combinations from the text:
to express an opinion, to provide an assessment, statistical sampling, material misstatement, a vital part, environmental concerns, nonprofit organizations, an increasing need, in satisfying mission objectives, to issue an auditor’s report, manufacturing of any article, checking for adherence, governing bodies, third parties, external users, the fairness of financial statements
Grammar Revision: Modal Verbs (Модальные глаголы)
Наиболее часто употребляемые модальные глаголы: сan - могу, можешь, может, можете и т.д. (способность), may - могу, можешь, может, можете и т.д. (возможность), must - должен, должна, должны (долженствование),
should неизменяемая форма – (вам) следует (долженствование или совет).
Другие модальные глаголы: ought to – ( вам) следует (совет), need (to) – (нужно, надо).
Modal verbs can, may, must and their equivalents
| Modal Verbs | Equivalents |
| can | be able +to… |
| may | be allowed+to… |
| must | be+to… have+to… |
| Present Simple | Past Simple | Future Simple только от эквивалентов |
| сan или от эквивалента: am/is/are able +to… | could или от эквивалента: was(were)able+to… | will be able+to… |
| may или от эквивалента: am/is/are allowed+to… | might или от эквивалента: was(were)allowed+to… | will be allowed+to… |
| must или от эквивалентов: am/is/are+to… have/has+to… | от эквивалентов: was(were)+to… had+to… | will be+to… will have+to… |
- Translate the sentences with modal verbs and their equivalents:
- Internal audit can be understood as internal control of financial and non-financial data within a company.
- An auditor has to ascertain the validity and reliability of information.
- Analysis of the data may be performed hourly, daily, weekly or monthly.
- The work should be done on a test basis.
- An auditor was to express an opinion on company affairs.
- Audit is to prevent errors or fraud.
- Audit professionals will be able to specialize in different kinds of audit.
- Auditors must be competent and objective persons.
- They will have to issue an auditor’s report.
- Managers and accountants of the company could present financial statements to audit professionals.
- Read Text C. Agree or disagree with the statements. Define: “true” or “false”.
1. Audit is a part of accounting.
2. Auditing includes only financial subject areas.
3. To prevent errors and fraud is not the aim of auditing.
4. A need for audit professionals is now decreasing in non-profit organizations.
5. Generally accepted audit standards are established by governing bodies.
6. The standards of consultant and external auditors are the same.
7. An audit is an evaluation of a person, organization, system, process, enterprise, project or product.
8. An audit is performed by independent persons.
9. There are different kinds of audit.
10. The consultant auditor may work only as part of the audit team.
Text C
AUDIT
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts can also exist in project management, quality management, and energy conservation.
Audits in accounting
Audits should be performed to ascertain the validity and reliability of information; also to provide an assessment of a system's internal control. The goal of an audit is to express an opinion on the person / organization / system (etc) in question, under evaluation based on work done on a test basis.
Due to practical constraints, an audit must seek to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling can be adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative (numerical) and qualitative factors.
Auditing is a vital part of accounting. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see financial audit). However, recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns. With nonprofit organizations and government agencies, there has been an increasing need for performance audits, examining their success in satisfying mission objectives. As a result, there are now audit professionals who specialize in security audits, information systems audits, and environmental audits.
In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent, independent and objective person(s) known as auditors or accountants, who then issue an auditor's report based on the results of the audit.
In cost accounting, it is a process for verifying the cost of manufacturing or producing of any article, on the basis of accounts measuring the use of material, labor or other items of cost. In simple words the term, cost audit, means a systematic and accurate verification of the cost accounts and records, and checking for adherence to the cost accounting objectives. According to the Institute of Cost and Management Accountants, a cost audit is "an examination of cost accounting records and verification of facts to ascertain that the cost of the product has been arrived at, in accordance with principles of cost accounting."
An audit has to adhere to generally accepted standards established by governing bodies. These standards assure third parties or external users that they are able to rely upon the auditor's opinion on the fairness of financial statements, or other subjects on which the auditor expresses an opinion.
The Definition for Auditing and Assurance Standard (AAS) 1 by ICAI - "Auditing is the independent examination of financial information of any entity, whether profit oriented or not, and irrespective of its size or legal form, when such an examination is conducted with a view to expressing an opinion thereon."
Consultant auditors are external personnel contracted by the firm to perform an audit following the firm's auditing standards. This differs from the external auditor, who follows their own auditing standards. The level of independence is therefore somewhere between the internal auditor and the external auditor. The consultant auditor may work independently, or as part of the audit team that includes internal auditors. Consultant auditors are used when the firm lacks sufficient expertise to audit certain areas, or simply for staff augmentation when staff are not available. Quality auditors may be consultants or employed by the organization.
- Read the statements below and choose the one that best expresses the central idea of the text.
1. The definitions of audit.
2. Audit standards.
3. Audit as a vital part of accounting.
4. Audit in different subject areas of accounting.
- Match the parts of the sentences.
1. Audit is to provide assurance a) with financial information
2. An auditor should ascertain b) is called a cost audit
3. Audit is often associated c) on a contract basis
4. Audit professionals can specialize d) on financial and non-financial data
5. The results of the audit e) the reliability of information
6. A process for verifying the cost of articles f) quality auditors
7. Auditors should always follow g) in security and environmental audit
8. Auditing process includes h) accepted standards
9. An organization may employ i) monitoring of financial data
10. Consultant auditors work j) are presented in auditor’s report
- Find in Text C the sentences with modal verbs and their equivalents and translate them.
- Fill in the gaps in the sentences using the words and word combinations from the box:
1. Audit is used to check whether a company’s … … is handled correctly.
2. Internal controls are functioning to prevent … or ….
3. Statistical … can be adopted in audits.
4. In financial accounting audit is an independent assessment of a company's … … presented by its management.
5. In … … audit is performed on the basis of accounts measuring the use of material, labor or other items of cost.
6. Governing bodies … audit standards.
7. Due to adherence to accepted standards customers can rely upon the … … on the fairness of financial statements.
8. The examination of financial information of any entity should be ….
9. Consultant auditors, as well as quality auditors refer to external … contracted by the firm.
10. Consultant auditors are used to audit certain areas, or for … ….
cost accounting, auditor’s opinion, errors, financial information, establish, personnel,
financial statements, sampling, stuff augmentation, fraud, independent
_______________________________________________________________________
- Match the words with the appropriate definitions:
1. assessment a) a selective monitoring
2. evaluation b) to supply, to deliver, to make available for use
3. enterprise c) running a business or a factory, a plant, a firm
4. entity d) inner, inside
5. to provide e) outer, outside
6. external f) an increase, an expansion of smth
7. internal g) an estimation and calculation of the amount, quality and
value of smth
8. augmentation h) the determination that smth is true by means of facts
9. sampling i) any object or thing, an item or question
10. verification j) an amount fixed for payment
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