A.Answer the following question about the balance sheet.Question with asterisk(*)cannot be answer directly from the text.

1.What is the financial product of the accounting process?

2.What is a balance sheet?

3.Does the balance sheet provide financial information for a long period of time(for example,January to june 1993)or does it provide information for a specific in time(for example,on june 30 1993)?

4.What is the difference between assets and liabilities?

5.How is owners’or stockholdrs’equity determined?

6.How can the relationship between assets,liabilities,and owners’equity be represented?

7.Does the accounting equqtion always remain in balance?*Why or why not?

8.How can a business use a balance sheet?*As manager.how would you find a balance useful?

ANSWER:

1.The financial product of the accounting process is the balance sheet.

2.A balance sheet is a final statements that provides a summary of what a company awns and what it owes on one particular day.

3.it provides information for a specific in time,for example,on January 30 1993.

4.assets represent everything of value that is owned by a business,liabilities are the debts that is a company ownes.

5.Owners’or stochoders equity is determinited by subtracting liabilities from assets.

6.It can be represented by the fundamental accounting equqtion,assets equal liabilities plus owners’equity.

7.Yes,it does,Because one side must equal the other if not,it must be wrong with the recording.

8.A balance is usefull for a business,because it provides a financial picture of a company on a particular day,It provides managers with financial information decision making.

THE BALANCE SHEET

Financial statetments are the final product of the accounting process.they provide information on the financial condition of a company.The balance sheey,one type of financial statement,provides a summary of a company owns and what it owes on one particular day.

Assets represent everything of value that is owend by a business,such as property,equipment,and accounts receivable.On the other hand,liabilities are the debts that a company owes-for example to suppliers and banks.if liabilities are subtracted from assets(assets-liabilities),the amount remaining is the owners’hsare of a business,this is know as owners’or stockholders’equity.

One key to understanding the accounting transaction of a business is to understand the relationship of its assets,liabilities,and owners’equity.this is often represented by fundamental accounting equation:assets equal liabilities plus owners’ equity.

ASSETS=LIABILITIES+OWNERS’ EQUITY

These three factors are expressed in monetary terms and therefore are limitied to items that can be given a monetary value.The accounting equation always remains in balance;in other words,one side must equal the other.

The balance sheet expands the accounting aquation by providing more information about the assets,liabilities,and owners’equity of a company at a specific time(for example,on December 31,1993).it is Mde up of two parts.the first parts lists the company assets,and the second part details liabilities and owners’equity.Assets are divided into current and fixed assets.Cash,acconts receivable,and inventories are all current assets.Property,buildings,and equipment make up the fixed assets of a company.The liabilities section of the balance sheet is often divided into current liabilities (such as bonds and long-term notes).

The balance sheet provides a financial picture of a company on a particular date,and for this reason it is useful in two important areas.Internally,the balance sheet provides managers with financial information for company decision making.Externally it gives potential investors data for evaluating the company’s financial position.

AN ACCOUNTING OVERVIEW

Accounting is frequently called the”language of business”because of its ability to communicate financial information about an organization.various interesred parties,such as managers,potential investors,crediators,and the government,depend on accompany’s accounting systems to help them make informed financial decisions.An effective accounting system,therefore,must include accurate the financial status of an organization.

In order to achieve a standardized system,theaccounting process follows accounting principles and rules.Regardless of the of business or the amount of money involved,common,procedures for handling and presenting finanacial information are used.incoming money (revenues) and outgoing money (expenditures) are carefulully monitored,and transaction are summarized in finacial statement,which reflect the major financial activities of an organization.

Two common financial statements are the balance sheet and the income statement.the balance sheet shows the finanacial position of a company at one point time,while the income statement shows the fianancial performance of a company over a period of time.Financail statement allow interested parties tocompare one organization.for example,an investor amy compare the most recent income statement of two corporations in order to find out which one would a better investment.

People who specialize in the field of accounting are known as accountnts.in the united states,accountants are usually classified as public,private,or governmental.public accountants work independently and provide accounting services such as auditing and tax computation to companies and individuals.public accountants may earn the title of CPA(Certified Public Accountant)by fulfilling rigorous requirements.private accountants work solely for private companies or corporations that hire them to maintain financial records,and governmental accountants work for governmental agencies or bereaus.both private and governmental accontants are paid on a salary basis,whereas public accountants receive fees their services.

Throught effective application of commonly accepted accounting systems,private,public,and governmental accountants provide accurate and timely financial information that is necessary for organitational decision-making.

A.Answer the following question about accounting.Questions with asterisks cannot be answer directly from the text.

1. Why is accounting called the “language of business”?
2. How is a standardized accounting systems achieved?
3. What are revenues and expenditures?
4. What do the balance sheet and the income statement have in common?How are they different?
5. *How might the information contained in financial statements be useful to managers?*How might creditors use this information?
6. How are accountats classified in the united states?
7. What kinds of services do public accountants provide?
8. What is a CPA?*do you have a similar type of position in your country?*Explain.
9. *Which type of accounting-public,private,or governmental-appeals to you the most?
10. *What are some management decisions that might be based on accounting information?

ANSWER:

1.Accouting is called the “language of business”because of its ability to communicate financial information about on organization.

2.In order to achieve a standardized accounting systems,the accounting process follow accounting principles and rules.

3. Revenues are incoming money expenditures are aoutgoing money.

4. The balance sheet and the income statement are two aommon financial statement they are different,the first shows the financial position of a company at one point of time,while the second shows the financial performance of a company over a perio of time.

5. The information contained in financial statements might be use to creditors.it helps them to find out whether the company will be able to repay crdit ontime or not.

6. In the unitd states accountants,are classifred as public,private,and governmental.

7. Public accountants provide accounting services such as auditing and text computation to companies and individuals.

8. A CPA is a certified public accountant. Yes we had formerly faculty of economics graduates of 5 elite universities god ‘Drs……..Ak’dogree.

9. Personal question

10. Some company fianancial decision makings moght be based on accounting information for example the management wont to expands its business to build a bigger factory to introduce new variety of goods.

TENSES

Pr = Present ,Ps = Past,S = Simple,C = Countinucus,F = Future,Pf = perfect

1. Pr.s = He write many latters everyday (hatitual action)

2. Ps.s = He wrote m.i. yesterday (occurred in the past)

3. Pr.c = He was writing m.i. now (is occurring right now)

4. Ps.s = He was writing m.i. when t it rained yesterday (two actions in the past)

5.Pr.f = He will write m.i. tomorrow (will happen in the future)

6.Ps.f = He would wrote m.i. yesterday,but the didn’n have time

7.Pr.pf = He has eritten m.i. already (has just happened now)

8.Ps.pf = He had written m.i. when it rained yesterday (two actions in the past)

9.Pr.fc = He will be writing m.i.when you visit him tomorrow (in the future)

10.Ps.fc = He would be writing m.i.whenyou visited him yesterday (in the past)

11.Pr.f pf = He will have written m.i.when you come tomorrow (in the futuring)

12.Ps.f pf = He would have written m.i.when you come yesterday (in the past)

13.Pr.pf c = He has been writing m.i.foe two days until now (in the past)

14.Ps.pf c = He had been writing m.i.for two days until yesterday (coninously from past to past)

15.Pr.f pfc = He will have been writing m.i.for two days until tomorrow (until in the future)

16.Pf.f pfc = He would have been writing m.i. for two days until yesterday (until in the past)

MULTINATIONAL CORPORATIONS

A company often becomes involved in international trade by exchanging goods or services with another country-importing raw materials it may need for production or these trade relationship is the first step in the development of a multinational business.At stage,however,the corporation’s emphasis is still on the domestic market.As trade expands,the corporation’s dealings with companies or people outside the “home country”of that corporation increase.

The corporation then begins to view the whole world as a base for production and marketing operations.The next step in the development of a multinational business is focusing on the world market.The company may estabilishing a foreign assembly plant,engage in contract manufacturing,or build a foreigen manucturing company or subsidiary.Therefore,a multinational corporation is a company that is primarily based in one country and has production and marketing activities foreign countries.

Since World War II,multinational corporations have grown rapidly.The names and products of many of the multinational have become well-knownin the world marketplace:international Business machines(IBM),Royal Dutch shell,Panasonic,Coca-cola,and volkswagen.coca-cola,for example,now has operations in more then 180 countries.

A multinational corporations operates in a complex business environment.Cultural,social, economic,political,and technologi system vary from country to country.In order to operete successfully,a multinational company needs a basic understanding and appreciation of the foreign business environment.

A.Answer the following question about multinationals.Questions with asterisks(*)cannot be answered directly from the text.

1. What is the first step in the development of a multinational business?

2. Where is the company’s emphasis when it is simply trading with other countries?

3. What market does a multinational corporation focus on?

4. A company may estabilish its manufacturing operations in foreign countries what are

Three forms that these operations may take?

5. What is a multinational corporation?

6. When have multinational grown rapidly?*Why do you think they have experienced

Period of rapid growth?

7. *What are some products that are produced by the following multinational

Corporations:IBM,coca-cola,Panasonic,shell,and Volkswagen?

8. *Why does a multinational corporation operate in a more complex businnes

Environment than a domestic company?

9. *What are some of the social and political factors that can vary from country to

Country?

10. Why does a multinational corporation need a basic understanding of foreign

Business environments?*How can a multinational gain this understanding?

ANSWER:

1. The first step(it)is estabilishing the trade relation ship with another countri.

2. The companies emphasis(it)is still on the domestic market.

3. A multinational corporation (it)focuses on the world market.

4. The three forms(they)are:it may estabilish a foreign assembly plant,engange in contract manufacturing,and build a foreign manufacturing company or a subsidiary.

5. A multinational corporation(it)is a company that is primary bosed in one country and has production and marketing activities in foreign countries.

6. Multinationals(they)have grown rapidly since world II.Because during the war many countries knew what resources are scarce or abundant in outhor countries.

7. IBm business machine;rayal,dutch,shell;oil;Panasonic;electronic;coca-cola;soft drink;Volkswagen;auto mobils;

8. Because a multinational, corporation focuses on the world market,and each country has its own systems culturally;economic;political;and technologically where as a domestic company only operates in one coutry which its systems its already familiar.

9. Socially;in japan life time employment systems is applied,where as in Indonesia contract system employment is used,politically;Thailand is monarchism;Indonesia is domestic.

10. In order to operate successfully,this understanding can be gained throught market research.