Task 9 What does GAAP mean? Read the notes below and say why GAAP is an important tool in accounting profession.

In order to exclude creativity from accounting practices GAAP, or generally accepted accounting principles were introduced in 1936 by the American Institute of Accountants. The need for uniform financial reports by publicly traded companies is urgent. Private U.S. businesses are not required but still follow GAAP. The Governmental Accounting Standards Board estimates that approximately 70% of county and local financial offices comply with the principles.

Task 10 GAAP is founded on the basic accounting assumptions listed in the left-hand column of the table below. Try to match the assumptions and their definitions.

1. Economic Entity		A. Business transactions of a sole proprietorship are separate from the owner’s personal transactions.
2.  Conservatism		B. the term refers to the cash spent when an item was originally obtained.
3. Materiality		C. Revenues are recognized as soon as a product has been sold or a service has been performed, regardless of when the money is actually received.
4. Monetary Unit		D. It is possible to report the complex and ongoing activities of a business in relatively short, distinct time intervals, shown in the heading of each financial statement.
5. Matching		E. Information is important to an investor or lender.
6. Going Concern		F. If the company is not be able to continue business activity, the accountant is required to disclose this assessment.
7. Full Disclosure		G. Expenses must be matched with revenues.
8. Time Period		H. Economic activity is measured in one and only international currency for any transaction.
9. Revenue recognition	I. An accountant might be allowed to violate another accounting principle if an amount is insignificant.
10. Historical cost		J. Accountants are to anticipate or disclose losses, but are not allowed to do a similar action for gains.

Task 11 Study the contexts on the left to find out what the scrambled words are.

1.	General guidelines	CREPISNPIL
2.	The __________ unit assumption means transactions are reported in dollars.	TORENYAM
3.	Adjusting entries help to achieve the ____________ principle.	NTAGHMIC
4.	The cost principle is often described as the __________ cost principle.	THLSCOIARI
5.	__________ practices allows the format of a public utility's balance sheet to be different from that of a manufacturer.	UTIRNYSD
6.	The concept of _________________ allows for the violation of an accounting principle when the amounts are insignificant.	IYARMILETAT
7.	The __________ entity assumption results in business transactions being kept separate from a sole proprietor's personal transactions.	IOCENOCM
8.	In cases of uncertainty, less profit is reported under this concept.	RVETMCSOINSA
9.	Full __________ is achieved through the notes to the financial statements.	ODRCSILUSE
10.	This assumption justifies quarterly financial statements.	IRDOCYIPIET
11.	Defined as the cash or cash equivalent amount at the time of a transaction.	TOCS
12.	Accrual accounting is related to this principle.	NAGMITCH
13.	Results in the reporting of contingent losses, but not contingent gains.	VESTMIRNASOC
14.	Permits the immediate expensing of insignificant assets.	TRIALITAEMY
15.	FASB is the acronym for _____________ Accounting Standards Board.	AFAILNCIN
16.	The __________ concern assumption is that an enterprise will continue on long enough to carry out its objectives and commitments.	OGIGN
17.	Communicating the significant accounting policies in the first note to the financial statements is related to the full ______________ principle.	SECLUDORIS
18.	The U.S. government agency with authority over the reporting requirements of corporations whose stock is publicly traded in the U.S. is the Securities and ______________ Commission.	HXGAENEC
19.	Under the __________-basis of accounting, revenues are reported on the income statement in the period in which they are earned.	CUCLARA
20.	Part of the _______________ unit assumption is that the U.S. dollar retains its purchasing power over time.	ATORMNYE

GRAMMAR

Grammar notes: Articles

How many articles do we have in English? How different are they? Read the notes to revise.

Articles determine nouns. They convey the idea of definiteness (the [ði:])and indefiniteness (a [ei]). Individualized and singled out from all the other objects of the same kind nouns are opposed to a more general reference to an object. the speaker or the writer use articles to establish mutual understanding about what is known and what is new.

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