UNIT 1: INTRODUCTION TO ACCOUNTING

1. **Accounting is the process of __________, measuring, and interpreting financial

activity.**

2. **Many people think of accounting as a highly __________ field that can be

understood only by professional accountants.**
3. **Accounting has often been called the “__________ of business.”**
4. **An individual must account for his or her __________ and file income tax
returns.**
5. **The underlying purpose of accounting is to provide financial information about
an __________ entity.**
6. **The financial information provided by an accounting system is needed by
__________ decision makers.**
7. **The methods used by a business to keep records of its financial activities
comprise the __________ system.**
8. **The first function of an accounting system is to create a systematic record of the
daily business activity in terms of __________.**
9. **The term __________ refers to a completed action in accounting.**
10. **Not all business events can be measured in monetary terms, such as the
appointment of a new chief __________.**
11. **We classify transactions into related groups or __________.**
12. **To organize accounting information, we summarize classified information into
accounting __________.**
13. **Accounting not only creates information but also involves __________ this
information to interested parties.**
14. **Users of accounting information can be divided into two major categories:
external users and __________ users.**
15. **Financial accounting systems provide financial statements to __________
users.**
16. **Managerial accounting systems assist internal users in reaching certain operating
__________.**
17. **Bookkeeping is the __________ of transactions in accounting.**
18. **Public accountants offer accounting services to clients for a __________.**
19. **In private accounting, the chief accounting officer is usually called the
__________.**
20. **Government officials rely on financial information to help them direct the affairs
of their
21. **Accounting for governmental affairs requires a different approach because the
objective of earning a __________ is absent.**
22. **Universities, hospitals, and churches follow a pattern of accounting similar to
__________ accounting.**
23. **The __________ function of accounting is to help manage and control business
operations.**
24. **Accounting helps individuals make informed decisions, such as qualifying for a
__________.**
25. **The three primary types of services rendered by public accountants are auditing,
income tax services, and __________ services.**
26. **The recording of transactions tends to be mechanical and __________.**
27. **Accounting includes the analysis and interpretation of information as an aid to
making business __________.**
28. **The accounting profession is divided into three areas: public accounting, private
accounting, and __________ accounting.**
29. **Accountants in private industry must record transactions and prepare periodic
__________ statements.**
30. **Governmental agencies employ accountants to prepare __________ and audit
accounting records.**
 UNIT 2: CAREERS IN THE FIELD OF ACCOUNTANCY
### Gap-Filling Questions and Answers
1. **Accounting is often seen as _________.**
2. **The world of accounting is actually very _________.**
3. **The accounts team includes sales ledger clerks and ________ clerks.**
4. **The payroll clerk is responsible for processing staff _________.**
5. **Management accountants prepare the annual ________ statements.**
6. **A good accounts team works to save the company money by minimizing the
________ payable.**
7. **In smaller accounting practices, staff often perform various _________.**
8. **The owner of a small practice is usually a ________ accountant.**
9. **Auditors ensure that the accounts were done in the ________ way.**
10. **Government auditors are sent to companies suspected of breaking the
________.**
11. **Tax advisors help their clients lower their ________ bill.**
12. **Accountants need to be ________ unwilling to accept anything less than an
exact result.**
13. **Accountants must have a good eye for _________.**
14. **Creative accounting involves finding ways to get around ________ without
breaking them.**
15. **Confidentiality is obligatory for all people working with _________.**
16. **Accountants can expect to earn very good _________.**
17. **Accounting is important for a company's _________.**
18. **There is always a demand for good _________.**
19. **Accountants need to stay within local accounting _________.**
20. **Accountants must follow strict rules and codes of _________.**
21. **Auditors are often called the police of the ________ world.**
22. **Higher up the hierarchy, we have the management _________.**
23. **The majority of work in smaller practices is done by _________.**
24. **Accountants need a real love of _________.**
25. **The accounting staff must be ________ to handle audits.**
26. **A talented accountant can advise clients on the best course of _________.**
27. **Accounting helps individuals manage their _________.**
28. **All accountants must ensure their work is done in a ________ way.**
29. **Accountants play a crucial role in the financial ________ of an organization.**
30. **The next time someone says accounting is dull, remember it’s about ________
and money.** (truth)
 UNIT 3
1. The __________ sheet summarizes the assets, liabilities, and equity of a business
entity at a given time.
2. After James passed his exams, he became a __________.
3. The board of directors was satisfied with the __________ explanation of the
unexpected loss reported in the accounts.
4. The sales ledger clerk totaled the __________ and saw that the company was owed
over $1 million.
5. Before we can pay the invoice, we need to record it as a __________ in the
accounting system.
6. As his accountant hadn't finished the tax calculations, he applied for a __________.
7. Double __________ agreements help people pay taxes in the country where the
money was earned.
8. The accountant suggested not signing the final contract until all __________ was
completed.
9. The company had to deal with several __________, including the euro.
10. The company reported a net profit in __________ of $5 million.
11. As it was a Limited Liability Company (__________), creditors couldn't access
John's private assets.
12. The accounting department needs to __________ the bank account to the accounts
daily.
13. The auditors checked the factory to make sure that all __________ listed in the
accounts were there.
14. All purchases over five thousand dollars must be __________ by accounts payable.
15. The company accountant spent two days trying to get the __________ to agree.
 UNIT 4 FILL-IN-THE-BLANK QUESTIONS:
Without good ___, accounts would face a huge amount of extra work.
Bookkeeping is the ___ of accounting and is just as, if not even more important.
Bookkeeping basically involves the recording of any ___ transactions.
Bookkeeping and accounting are not the same thing - bookkeeping is an element of the
___ process.
Bookkeepers provide the accountant with the ___ information which reports are based
on.
Double entry bookkeeping is a more ___ system for accounting.
The double entry system works by recording ___ sides to each income or expenditure
transaction.
Traditionally, bookkeepers kept written records in the form of ___, ___, ___ and other
journals.
Automated bookkeeping software has made bookkeeping ___, but it still requires
suitable training or experience.
The ___ entry system records each transaction only once, making it less effective.
Bookkeepers bring 'the books' to the ___ stage, at which point the work is passed to
the accountant.
Bookkeepers also deal with ___ cash and ___ its use.
Self-employed bookkeepers face the added difficulty of having to deal with clients
who have either ___ or ___ financial records.
The term 'bookkeeper' is now more commonly used to show an individual preparing
___ financial records.
Bookkeepers are often seen as being ___ important to the success of an accounting
department than accountants.
Double entry bookkeeping is known for being ___, with some qualified accountants
not completely understanding it.
Bookkeeping, as with accounting, requires a thorough understanding of the ___ being
used.
In the single entry system, the record does not accurately show the ___ of the
transaction.
Bookkeepers usually deal with ___ tax returns and ___ tax returns.
Bookkeepers are members of a ___ accounting team.
 UNIT 5:
Fill-in-the-blank questions:
Unlike many countries, in the US accountants have two options - ___ accounting and
GAAP.
GAAP is the ___ method of accounting for a public company.
Tax accounting focuses on the transactions which have an impact on the ___ situation
of the company.
The IRS developed a ___ accounting system to levy taxes against net earnings or
taxable income.
Tax accounting commonly uses the ___, which uses declining percentages defined by
the IRS.
Under GAAP, the only option is ___ basis accounting.
Tax accounting allows for the use of ___, ___ or ___ basis accounting.
Using GAAP, unpaid due expenses accrue on the ___.
The IRS imposes limits for both ___ and ___ basis accounting.
Tax accounting is significantly ___ than GAAP.
Tax accounting is the preferred method for the majority of ___ and SMEs.
When the basis of the taxes differs from the financial statements, more ___ is spent on
the process.
Businesses often change to tax accounting basis when changes required by GAAP are
too ___.
Most business owners have a degree of knowledge on ___ taxes.
Tax regulations use ___ language and easily understandable examples.
GAAP rules are more ___ and are designed for professionals with wide financial
knowledge.
GAAP exists to provide accounting ___, standards and practices.
Taxable income differs from ___ as defined by GAAP.
Common depreciation methods under U.S. GAAP include ___ and ___ depreciation.
Tax accounting does not need an ___ basis unless reporting the company tax return as
an accrual basis taxpayer.