Text 3. Users of accounting information

Individuals. People use accounting information in day-to-day affairs to manage their bank accounts, to evaluate job prospects, to make investments, and to decide whether to rent or to buy a house.

Businesses. Managers of businesses use accounting information to set goals for their organizations, to evaluate their progress toward those goals, and to take corrective action if necessary. Decisions based on accounting information may include which building and equipment to purchase, how much merchandise inventory to keep on hand, and how much cash to borrow.

Investors and Creditors. Investors provide the money that businesses need to begin operations. To decide whether to help start a new venture, potential investors evaluate what income they can reasonable expect on their investment. This means analyzing the financial statements of the new business. Those people who do invest monitor the progress of the business by analyzing the company’s financial statements and by keeping up with its developments in the business press, for example, The Wall Street Journal, Business Week, Forbes, and Fortune.

Ответьте на вопросы:

Who are users of accounting information?

Why do they use it?

Read the text and answer the following questions:

1. How old is accounting?

2. What century does it date back?

3. When did the main bookkeeping terms appear such as "double entry
bookkeeping", "income",

4. What does the words "debit" and "credit" mean?

5. When and why were developed more complicated accounting systems?

6. Why is term "data processing" associated with bookkeeping?