VOCABULARY NOTE The phrase meeting with (instead of just meeting] is
Writing 3 Writing 3 This is one ofthe companies in Unit, Practice 4. Your
The services advertised were in Unt 5, Practice 2
ANSWERS
4 The only phrase in the Useful phrases that clearly accepts responsibiltyis This was an error on our part. However, We do everything possible to... and Despite all our security
procedures... could lead to an acceptance of ibility, Some other phrases for admitting responsibility are:
This was our mistake...
We are sorry for our error.
Unfortunately, we made a mistake . Regrettably, this wos our responsibility . 2 POSSIBLE ANSWER
Dear Mrs Strutt
I referto your letter of 4 December 20-.
| Lam sorry we recently sent youa mailing describing you as a'valued business customer’, when in fact you currently do no business with
|us, This was an error on our part, Please accept
‘our apologies.
However, we stil ook forward to the possi doing business with you in the future.
Yours sincerely
ity of
XOTE
‘The letter in the Student's Book has a standard layout, glish-language conventions for addresses, dates,
iffer from those of many other languages, and ở to be learned. A useful way of emphasizing that wwe write the receiver's address on the leftis to show learners an envelope with the window on the left.
‘This is not always easy to find in non English-speaking countries, and unfortunately not included free with this
‘her's Book!)
Business conespondence2 Unit §
Accounting
AIMS
BACKGROUND: ACCOUNTING
Companies’ financial statements have to give a true and fair view (not the true and fair view) of a company's profit andits assets and liabilities. This implies that there are various ways of doing accounts, and indeed there are, but companies have to adopt certain principles: in the USA, Generally Accepted Accounting Principles (GAAP), and in most of the rest of the
‘world, International Financial Reporting Standards (UFRS), previously known as international Accounting,
Standards (IAS)
‘The time period principle is that accounts are always forthe same length of time, usually 12 months. This prevents companies manipulating their accounts by changing the end of the financial year to disguise bad periods. The consistency principle states that
‘companies have to use the same methods (e.g. of valuing depreciation and inventory) year after year.
This enables investors and the tax authorities to
‘compare one year's results with another.
‘The separate entity principles that a companyis a legal person, separate from its owners, with its own assets and liabilities. This means that stockholders
have the privilege of limited liability, and i the company {goes bankrupt, they are only liable for the amount they
paid for their shares.
Accounts are usually prepared on the historical cost principle, which is that all assets are stated atthe value at which they were originally brought into the company.
This means companies do not need to calculate the current value of assets every year, although this can be misleading in periods of high inflation. The {going concern principle is that a company can and.
will continue in business and pay its liabilities and creditors. This is why the current value of assets is irrelevant: they are not forsale.
38 Unt? Accounting
Tolearn about: types of accounting; . af financial statements and accounting
The matching principle is that revenue or income is recorded in the period itis generated, along with related costs and expenditure. Examples of this principle are depreciation and amortization, which ar ways of matching the cost of a long-lasting asset ove the period during which it earns revenue. Conservatis or prudence means that you do not recognize any income unless you are almost certain to receive it, an {you record costs as soon as they are incurred, This
‘means that, if anything, companies should understat rather than overstate profits.
Consolidation means bringing together the accounts.
of alla company's subsidiaries intoa single set.
This allows stockholders to find out if an apparently, profitable company has a non- profitable subsidiary with huge liabilities,
Leadin
These headlines all refer to genuine cases. They also suggest why accounting and auditing are important false accounting can easily lead to companies going bankrupt, creditors and investors losing money, et.
Scondal a disgraceful event causing public outrage)
‘seems to be commonly used with both accounting an aueitng
Accounting s explained inthe interview with Eric Sharp, who also suggests why both accounting and auditing are necessary: they provide information for
a company's managers and investors and the tax authorities
The answerto the second question is that there are various possible ways of doing a business's accounts
Vocabulary 1
business school syllabuses include a large umber of courses on accounting, so yourlearners
. know lot of the basic concepts. This exercise ves some basic terms that are used in the following Listening exercises,
ANSWERS:
assets
‘tax accounting auditing cost accounting financial accounting liabilities
bookkeeping.
income expenditure
410 management accounting ®@@x 0 VOCABULARY NOTE.
-ome is also known as revenue.