What’s accounting?

Part of the economy that studies these systems or the different items that reflect the financial
movements of a company or entity.

Do you think accounting is important to keep a company floating? why/why not?

Keeping business accounting up-to-date allows you to have visibility about what is happening in the
business, which is an advantage for the company since it allows you to make better decisions in the
future, as well as anticipating possible ups and downs, reducing uncertainty.

Do you know someone who works as an accountant? If so, who? Where does this person
work? Do you know what exactly this person does?
Yes, his name is Dulfay OLarte, but he still has a semester to graduate as a public accountant,
however he is already working as a tax auditor in the city of Bucaramanga Santander

a. Match these accounting firms with their definition1.

A. Public Accounting 1. firms typically employ Certified

Public Accountants (CPAs).

B. Tax Accounting
2. firms use accountings kills and
legal policies to uncover fraudulent
and illegal activities

C. Forensic accounting 3. Firms complete fundamental

accounting tasks for small and
medium-sized companies.

D. Bookkeeping 4. Firms focus on tax preparation

and planning for companies of all
sizes, and also for individuals.

3.2. Listening practice

Before watching the video, answer these questions:
- find the definition of “profit” and gives one examples.
● The word benefit refers to a good that is given or that is received. The benefit always implies a
positive action or result and that therefore is good and can favor one or more people, as well
as satisfy some need.
● The profit in economics is the monetary amount resulting from the difference between income
and costs of an investment, business or any other economic activity.

Examples:
● Accounting provides many benefits for the company to be more organized
● Financial statements are a benefit for companies
● This insurance policy gives me greater benefits than the previous one

- look into a dictionary the concepts of internal, external, and government.

● Internal accounting is responsible for analyzing and interpreting the economic data of what
happens with in the company. Its main function is to evaluate the costs and benefits derived
from the different production areas.
● Internal or analytical Accounting is aimed at the knowledge and interpretation of the events
that take place within the economic unit without relation to the outside, such as the formation of
costs and the valuation of products or services

● The main objective of external (or financial) accounting is to obtain historical information about
the organization's relations with the outside world. The main exponent of this information is the
annual accounts, made up of the balance sheet, the profit and loss account, the statement of
changes in equity, the statement of cash flows and there port. External deals with operations
that relate the company to the outside world.

● Governing authority of a political unit, which aims both to direct, control and administer the
institutions of the State, to regulate a political society and to exercise authority

Now, watch the video, make notes and practice your listening skill following the link to the
video: https://www.youtube.com/watch?v=Yj24JwZVd54

After watching the video, discuss and answer the following questions:

- What is the importance of having a good accounting process in a company?

● Accounting plays a vital role in running a business because it helps you track income and
expenses, ensure compliance with laws, and provide investors, management, and the
government with quantitative financial information that can be used to make business
decisions.
 ● Keeping business accounting up-to-date allows you to have visibility about what is happening
in the business, which is an advantage for the company since it allows you to make better
decisions in the future, as well as to foresee possible ups and downs, reducing uncertainty.

- What is the purpose of a business?

● Purpose is there a son for the company's existence. It allows to have clear and realistic
objectives. Determine what are the essential activities of said company and the strategy, "what
is our company and what should be"

- How could you keep your business floating?

● Analyze whet her the product or service is adequate
● get to know customers
● look for the root of the problems and solve it
● propose business strategies
● launch interesting promotions, offers or discounts to call customers
● have excellent customer service
● plan the growth of the organization
● keep an organized accounting
● see alliances for the benefit of oragnization

- What factors you should take into account when having a business?
● social acceptance
● licenses and law regulations
● choose a good commercial sector to place the business
● look for the minimum investment
● create your own brand
● identify good suppliers and customers
● organize the business plan
● study financial possibilities
● have an alternative plan

3.3. Reading practice: Reading about the Accounting Cycle.

Before reading you should complete the following meaning chart:

Meaning synonyms
Spellin
g
liability La responsabilidad es Commitment, duty
una característica de la
persona y consiste en que ella
misma debe responder
por sus actos. Cuando la
norma exige su cumplimiento a
un sujeto, en éste nace la
obligación de cumplir

Income statement El estado de resultados,

también conocido como estado
profit and loss
de ganancias y pérdidas es un
reporte financiero que en base statement
a un periodo determinado
muestra de manera detallada
los ingresos obtenidos, los
gastos en el momento en que
se producen y como
consecuencia, el beneficio o
pérdida que ha generado la
empresa en dicho periodo de
tiempo para analizar esta
información y en base a esto,
tomar decisiones de negocio.

owner's equity Capital del propietario, también heritage

conocida como la capital, es un
término contable, y es un
componente importante de un
balance. Indica la parte de
renta variable de una empresa
que un empresario tiene
derechos en relación con los
activos y pasivos.
Técnicamente, el capital del
propietario es una ecuación
que resta pasivos de los
activos totales.

asset El activo son los bienes,

derechos y otros recursos de
operating
los que dispone una empresa,
 pudiendo ser, por ejemplo,
muebles, construcciones,
equipos informáticos o
derechos de cobro por
servicios prestados o venta de
bienes a clientes.

budget El presupuesto es una calculation and

herramienta que le permite quotation
saber cuáles son sus ingresos
y gastos en un tiempo
determinado, conocer cuánto
puede destinar al
ahorro para el cumplimiento de
sus metas planteadas,
identificar en qué está
gastando su dinero, cuánto
necesita para cubrir sus
necesidades, determinar
en qué está gastando .

cash cash to money in the form of Tickets, Money

coins or paper money, that is,
bills or checks, which are used
to make cash or cash
payments. In short, it is the
physical money that a person
carries and that, therefore, is
not in the bank.

cost refers to the monetary value of Price , value

the expenses of raw materials,
equipment, supplies, services,
labor, products, etc., that are
used for the creation of the
product or service. This is an
amount that is recorded as an
expense in the accounting
records.

depreciation la depreciación se refiere a dos Lost,

vertientes del mismo concepto.
devaluation
En primer lugar,
la depreciación es la
disminución real del valor
razonable de un activo.
 Revenue significa un aumento en el Entry
patrimonio de una persona
natural o jurídica

Tax Un impuesto es un tributo que Demanded,

se paga al estado para tribute load
soportar los gastos públicos.
Estos pagos obligatorios son
exigidos tantos a personas
físicas, como a personas
jurídicas.

Payroll Salary
Una nómina es el registro
financiero que hace una
empresa sobre los salarios de
sus empleados, bonificaciones
y deducciones

Invoice Una factura es un documento Voucher

que avala la compra-venta de
un bien o el préstamo de un
servicio, y más allá de amparar
a los involucrados dando fe de
que la transacción se llevó a
cabo y de permitirle al
contribuyente comprobar sus
ingresos y egresos, es un
documento clave en la
declaración de impuestos

According to the information from the text, tick the following statements, True (T) or False (F)

● The accounting cycle corresponds to the recording of the business’s financial activities. (T )
● The checkbook is one of the tools used to do the post entries record. (F )
● As the books need to be accurate, an unadjusted trial balance verifies whether debits and
● credits match. (T )
● The statements are created as the accounts are up-to-date. (T )
● The accounting set up for the next period is part of the record transactions process. (T )
Based on the reading, describe each one of the following accounting concepts:

Transaction

The transaction is an operation that is carried out between two or more parties and that its objective is
the exchange of goods or services in exchange for a certain capital
________________________________________________________________________________

Posting
addressed to a person or account

________________________________________________________________________________

Trial balance

the trial balance or balance of sums and balances is a report that collects the debit and credit
positions of a company to verify them.
________________________________________________________________________________

Journal entries

refers to the form used to record the transactions carried out in the company in the accounting.

________________________________________________________________________________

Financial statements

Financial statements, also called annual accounts, financial reports or accounting statements, are a
reflection of a company's accounting and show its economic structure. In the financial statements the
economic activities carried out in the company during a certain period are reflected.

______________________________________________________________________________

Worksheet

A spreadsheet is a type of document that allows you to manipulate numerical and alphanumeric data
arranged in the form of tables composed of cells, which are usually organized in a matrix of rows and
columns

________________________________________________________________________________

Adjusting entries

An inventory adjustment is a movement of items into or out of the warehouse. It is functional to add
the initial inventory, losses or increases of merchandise.
________________________________________________________________________________

Closing the books

The accounting closing is the process that consists of canceling the income statement (made up of
the income, expenses, sales costs and production costs accounts) and transferring these figures to
the respective balance sheet accounts (assets, liabilities and equity)

________________________________________________________________________________