Unit One

Lesson one

Introduction to Accounting (Part One)

1. INTRODUCTION

Business is an economic activity undertaken with the motive of earning

profits and maximising the wealth for the owners. Business cannot run in
isolation. Largely, business activity is carried out by people coming
together with a purpose to serve a common cause. This team is often
referred to as an organisation, which could be in different forms such as
sole proprietorship, partnership, body corporate etc.

The business activities require resources (which are limited & and have
multiple uses) primarily in terms of material, labour, machinery, factories
and other services. Business success depends on how efficiently and
effectively these resources are managed. Therefore, there is a need to
ensure that the businessman tracks the use of these resources. The
resources are not free and thus one must be careful to keep an eye on the
cost of acquiring them as well.

Recording of business activities has to be done scientifically so that they

reveal the correct outcome. The science of bookkeeping and accounting
provides an effective solution. It is a branch of social science. This study
material aims to give a platform to the students to understand basic
principles and concepts, which can be applied to measure the
performance of business accurately.

2. DEFINITION

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 Definition by the American Institute of Certified Public Accountants
(Year 1961)
“Accounting is the art of recording, classifying and summarizing in a
significant manner and in terms of money, transactions and events which
are, in part at least, of a financial character, and interpreting the result
thereof”.

2. OBJECTIVE
S

Objectives of
Accounting

To Know the Providing Information

Solvency to the Users for
Position Rational Decision-
making

Systematic Ascertainment of
Recording of Results of above
Transactions Transactions
Ascertain the
Financial
Position of
Business

2.
CLASSIFICATION

The various sub-fields of the accounting are

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 ACCOUNTI
NG

Determining the Information

financial results for generation for Accounting to assist
the period and the controlling operations management in
state of affairs on the to maximise planning and
last day the efficiency and profit. decision making.
accounting period.

Financial Accounting Management Accounting

Financial Accounting is based on the Management Accounting is primarily
monetary transactions of the enterprise. based on the data available from Financial
Accounting.
Its main focus is on recording and It provides the necessary information for the
classifying management to assist them in the process of
monetary transactions in the books of planning, controlling, performance evaluation and
accounts and preparation of financial decision-making.
statements at the end of every accounting
period.
Reports as per Financial Accounting are Reports prepared in Management Accounting are
meant for the management as well as for meant for management and as per management
shareholders and creditors of the concern. requirements.
Reports should always be supported by Reports may contain both subjective and
relevant figures and it emphasizes on the objective figures.
objectivity of data.
Reports are always subject to statutory Reports are not subject to statutory audit.
audit.
It ascertains, evaluates and exhibits the It evaluates the sectional as well as the
financial strength of the whole business. entire performance of the business.

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 Lesson Two

Introduction to Accounting (Part Two)

1. Accounting Cycle

When the complete sequence of accounting procedures is done which

happens frequently and is repeated in the same directions during an
accounting period, the same is called an accounting cycle.
Steps/Phases of Accounting Cycle
The steps or phases of the accounting cycle can be developed as under:

Recording
of
Transaction
Financial
Statemen Journal
t

Closin
g Ledger
Entries

Adjusted Trial
Trial Balanc
Balance e
Adjustment
Entries

A. Recording of Transaction: As soon as a transaction happens it is at

first recorded in the subsidiary book.
B. Journal: The transactions are recorded in the Journal chronologically.
C. Ledger: All journals are posted into the ledger chronologically and in a
classified manner.

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D. Trial Balance: After taking all the ledger account closing balances, a
Trial Balance is prepared at the end of the period for the preparations
of financial statements.
E. Adjustment Entries: All the adjustment entries are to be recorded
properly and adjusted accordingly, before preparing financial
statements.
F. Adjusted Trial Balance: An adjusted trial balance may also be
prepared.
G. Closing Entries: All the nominal accounts are to be closed by
transferring to the Trading Account and Profit and Loss Account.
H. Financial Statements: Financial statements can now be easily
prepared which will exhibit the true financial position and operating
results.

2 . BASIC ACCOUNTING
TERMS

 Debtor: Debtors are those persons from whom a business has to

recover money on account of goods sold or services rendered on
credit. These debtors may again be classified as under:
(i) Good debts: The debts which are sure to be realized are called good
debts.
(ii) Doubtful Debts: The debts which may or may not be realized are called
doubtful debts.
(iii) Bad debts: The debts which cannot be realized at all are called bad
debts.
 Creditor: A creditor is a person to whom the business owes money or
money’s worth. e.g. money payable to the supplier of goods or provider
of service. Creditors are generally classified as Current Liabilities.
 Capital: It is the amount invested in the business by its owners. It may
be in the form of cash, goods, or any other asset which the proprietor or
partners of the business invest in the business activity.

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 Profit: The excess of Revenue Income over expense is called profit. It
could be calculated for each transaction or for business as a whole.
 Loss: The excess of expense over income is called loss. It could be
calculated for each transaction or for business as a whole.
 Transaction: It means an event or a business activity which involves an
exchange of money or money’s worth between parties.
 Asset: An asset is a resource owned by the business to use it for
generating future profits. Assets can be Tangible and Intangible.
Tangible Assets are Capital assets which have some physical
existence. e.g. Plant and Machinery, Furniture and Fittings, Land and
Buildings, Books, Computers, Vehicles, etc. The capital assets which
have no physical existence and whose value is limited by the rights and
anticipated benefits that possession confers upon the owner are
known as intangible Assets., e.g. Goodwill, Patents, Trademarks,
Copyrights, Brand Equity, Designs, Intellectual Property, etc.
Assets can also be classified into Current Assets and Non-Current
Assets.
Current Assets – An asset shall be classified as Current when it satisfies
any of the following:
(a) It is expected to be realised in or is intended for sale or consumption
in the Company’s normal
Operating Cycle,
(b) It is held primarily for the purpose of being traded,
(c) It is due to be realised within 12 months after the Reporting Date, or
(d) It is Cash or Cash Equivalent unless it is restricted from being
exchanged or used to settle a
Liability for at least 12 months after the Reporting Date.
Non-Current Assets – All other Assets shall be classified as Non-Current
Assets. e.g. Machinery held
for long term etc.

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 Lesson Three

Introduction to Accounting (Part Three)

1 . Vouchers

• It is a written instrument that serves to confirm or witness (vouch) for

some fact such as a transaction.
• A voucher is a document that shows goods have been bought or
services have been rendered, authorizes
payment, and indicates the ledger account(s) in which these transactions
have to be recorded.

Types of Vouchers
Receipt Payment Non-Cash or Suppor ng
Voucher Voucher Transfer Voucher
Voucher

(i) Receipt Voucher

A receipt voucher is used to record cash or bank receipt. Receipt
vouchers are of two types. i-e.
(a) Cash receipt voucher – it denotes receipt of cash
(b) Bank receipt voucher – it indicates receipt of cheque or demand draft
(ii) Payment Voucher
A payment voucher is used to record a payment of cash or cheque.
Payment vouchers are of two
types. i.e.
(a) Cash Payment voucher – it denotes payment of cash
(b) Bank Payment voucher – it indicates payment by cheque or demand
draft.

(iii) Non-Cash Or Transfer Voucher

These vouchers are used for non-cash transactions as documentary
evidence. e.g., Goods sent

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on credit.
(iv) Supporting Vouchers
These vouchers are the documentary evidence of transactions that have
happened.

2 . THE CONCEPTS OF ‘ACCOUNT’, ‘DEBIT’ AND ‘CREDIT’

 The concept of Account

• An account is defined as a summarized record of transactions related to
a person or a thing e.g. when the business deals with customers and
suppliers, each of the customers and suppliers will be a separate account.
Typically, an account is expressed as a statement in the form of English
letter ‘T’. It has two sides. The left-hand side is called as “Debit’ side and
the right-hand side is called as “Credit’ side.
Dr. Cash Account Cr.
Debit side Credit side.

2 . Types of Accounts

Account
s

Personal Real Nominal

Representiv Tangibl
Natural Artificial e e Integible

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(1) Personal Account: As the name suggests these are accounts related
to persons.
(a) These persons could be natural persons like Suresh’s A/c, Anil’s A/c,
Rani’s A/c etc.
(b) The persons could also be artificial persons like companies, bodies
corporate or associations of persons or partnerships etc.
(c) There could be representative personal accounts as well.
(2) Real Accounts: These are accounts related to assets properties or
possessions. Depending on their physical existence or otherwise, they
are further classified as follows:
(a) Tangible Real Account – Assets that have physical existence and can
be seen, and touched. e.g. Machinery A/c, Stock A/c, Cash A/c, Vehicle
A/c, and the like.
(b) Intangible Real Account – These represent possession of properties
that have no physical existence but can be measured in terms of money
and have a value attached to them. e.g. Goodwill A/c, Trade mark A/c,
Patents & Copy Rights A/c, Intellectual Property Rights A/c and the like.
(3) Nominal Account: These accounts are related to expenses or losses
and incomes or gains e.g. Salary and Wages A/c, Rent of Rates A/c,
Travelling Expenses A/c, Commission received A/c, Loss by fire A/c etc.

 The concept of Debit and Credit

 In double-entry book-keeping, debits and credits (abbreviated Dr and

Cr, respectively) are entries made in account ledgers to record
changes in value due to business transactions.
 Debit is derived from the Latin word “debitum”, which means ‘what we
will receive’. It is the destination, that enjoys the benefit.
 Credit is derived from the Latin word “credre” which means ‘what we
will have to pay’. It is the source, who sacrifices for the benefit.
 The source account for the transaction is credited (an entry is made
on the right side of the account’s ledger) and the destination account
is debited (an entry is made on the left).

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The whole Financial Accounting depends on Accounting Equation which
is also known as Balance Sheet Equation. The basic Accounting
Equation is:

Assets = Liabilities + Owner’s

equity
or A = L + P
or P = A - L
or L = A – P
Where A = Assets, L = Liabilities, P = Capital

While trying to do this correlation, please note that incomes or gains will
increase the owner’s equity and expenses or losses will reduce it. Students
are advised to go through the following Practice to understand this
equation properly.

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 Lesson Four

Practice

Reading Section
Read the text carefully and answer the questions

Accounting is a system meant for measuring business activities,

processing information into reports, and making the findings available to
decision-makers. The documents, which communicate these findings
about the performance of an organization in monetary terms, are called
financial statements. Usually, accounting is understood as the Language
of Business. However, a business may have a lot of aspects which may not
be of financial nature. As such, a better way to understand accounting
could be to call it The Language of Financial Decisions.
The purpose of accounting is to provide a means of recording, reporting,
summarizing, and interpreting economic data. In order to do this, an
accounting system must be designed. A system design serves the needs
of users of accounting information. Once a system has been designed,
reports can be issued and decisions based upon these reports are made
for various departments. Since accounting is used by everyone in one
form or another, a good understanding of accounting principles is
beneficial to all.
The accounting profession is generally divided into two categories: 1)
private accounting and 2) public accounting. Private accountants are
employed by a business, while public accountants practice as individuals
or as members of an accounting firm. Public accountants are subject to
strict government regulations and requirements which are determined by
each individual state where a license is granted. Private accountants on
the other hand require no licenses. They perform tasks which have been
determined by their employer. Accounting fields

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exist that specialize in very specific areas of a business. The examples are
auditing, budgetary, tax, social, cost, managerial, financial and
international.

[Adapted from Shekhar, 2016]

1. In which paragraph are the following information found?

NO. INFORMATION PARAGRAPH

1. A private accountant needs no license. ……………

2. One of the objectives of accounting is to give interpreting

economic data. ……………

3. The profession of accounting is classi ied into public

and private accounting. 3

4. A public accountant must obey the regulation established

by the government ……………

5. The nature of accounting is to measure a business activity ……………

and process the information into a report.

6. Accounting is usually called as a language of business. ……………

2. Decide if the following statements based on the passage are True (T)
or False (F).
1. An accounting system is designed to complicate summarizing and
interpreting economic data.
2. A well understanding of accounting principles is beneficial for people
who are working in a business.
3. Private accountants practice as members of accounting firm while
public accountants are directed by a business.
4. Private accountants have to obey the government’s regulation and
require license.
5. Private accountants perform jobs which are determined by their
employer.

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6. Accounting is a system meant for measuring business activities,
processing information into reports, and making the findings difficult to
decision-makers.
7. One of the ways to understand accounting is also to consider it as the
language of financial decision.
8. The aspects of all business activities have a financial nature and can be
measured by using accounting principle.
1 Classify the characteristics below into the categories of
accounting profession. See the example.

join an accounting are employed by a

firm business

Public are instructed by the

have a license
Accountants employer

do not need a
license obey the rule of government
Private
Accountants
strict to the
state’s rule practice as individuals

Speaking Section
Introducing Oneself and Others
What do you do when you meet someone for the first time? Usually, you
will introduce yourself to him/her. In introducing themselves or others,
people usually start by greeting, mentioning their name, address,
profession, etc.
In the context of a business environment, giving detailed information of
yourself will help your colleagues understand more about you. This is
important to gain recognition in your field and profession from your
colleagues. There are some ways to let your colleagues know about
yourself. Here are some expressions you may use in introducing yourself
and others.

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 Mentioning your name
Hello, my name Amin ……. My friends call me …….. Hi! I’m Karim ……….. You
can call me ………..
Let me introduce myself. My name is Muhammad ………..
Mentioning your occupation
I am a private accountant.
I am an accounting student.
I work for Genuine accounting company at ……, El Kouba,…. Algeirs.
Talking about your place or origin
I’m from …(For instance, Telemcen….)
I come from …………..
I was born in ………….., but I grew up in……..

Talking about your address

I live in …… street No. …. Jakarta.
I live on Soekarno Hatta street No. 15, Surabaya.
My origin is Lampung, but now I live in Slamet Riyadi street No 12
Surakarta.

Talking about your interest

I am very interested in analyzing a inancial report. Reading an economic
book is my favorite activity.

2/ Interview two of your classmates by asking the information provided in

the boxes below.

Classmate 1: …………………… Classmate 2:……………………

Name:………………………….. Name: …………………………..

Date of birth: ………………... Date of birth: ………………...
Hometown: …………………... Hometown: …………………...
Recent Address: …………… Recent Address: ……………
Educational background: ………………………………………
……………………………………… Educational background:
Current study:………………. ………………………………………
Major: …………………….......... Current study: ……………….
Interest: ……………………….. Major: ……………………..........
Interest: ………………………..

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Page 5 of 5
 Lesson Five

Speaking Section
Introducing Oneself and Others
What do you do when you meet someone for the first time? Usually, you
will introduce yourself to him/her. In introducing themselves or others,
people usually start by greeting, mentioning their name, address,
profession, etc.
In the context of a business environment, giving detailed information of
yourself will help your colleagues understand more about you. This is
important to gain recognition in your field and profession from your
colleagues. There are some ways to let your colleagues know about
yourself. Here are some expressions you may use in introducing yourself
and others.

Mentioning your name

Hello, my name Amin ……. My friends call me …….. Hi! I’m Karim ……….. You
can call me ………..
Let me introduce myself. My name is Muhammad ………..

Mentioning your occupation

I am a private accountant.
I am an accounting student.
I work for Genuine accounting company at ……, El Kouba,…. Algeirs.

Talking about your place or origin

I’m from …(For instance, Telemcen….)
I come from …………..
I was born in ………….., but I grew up in……..

Talking about your address

I live in …… street No. …. Jakarta.
I live on Soekarno Hatta street No. 15, Surabaya.
My origin is Lampung, but now I live in Slamet Riyadi street No 12
Surakarta.

Talking about your interest

I am very interested in analyzing a inancial report. Reading an economic
book is my favorite activity.

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2/ Interview two of your classmates by asking the information provided in
the boxes below.

Classmate 1: …………………… Classmate 2:……………………

Name: ………………………….. Name: …………………………..

Date of birth: ………………... Date of birth: ………………...
Hometown: …………………... Hometown: …………………...
Recent Address: …………… Recent Address: ……………
……………………………………… ………………………………………
……………………………………… ………………………………………
Educational background: Educational background:
……………………………………… ………………………………………
……………………………………… ………………………………………
……………………………………… ………………………………………
Current study: ………………. Current study: ……………….
……………………………………… ………………………………………
……………………………………… ………………………………………
Major: …………………….......... Major: ……………………..........
Interest: ……………………….. Interest: ………………………..
……………………………………… ………………………………………

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 Reading Section
Read the text carefully and answer the questions

Finding a job in the accounting field is a smart decision. Accounting is a

field that will always be in demand and it is a field that you can continue to
grow and move up inside your company. There are so many different
positions you can find in the accounting field. Careers in accounting can
range from entry level positions to executive level. Then, this passage
highlights some prospective careers in the accounting field.
The most famous career in the field of accounting is being accountants.
Accountants are those whose job is to prepare and examine financial
records and tax. They make sure that records are accurate and that taxes
are paid properly and on time. Accountants perform overviews of the
financial operations of a business in order to help it run effectively. They
also provide the same services to individuals, helping them create plans of
action for improved financial well-being.
There is a wide assortment of different careers in accounting that people
can pursue to improve their career standing. Bookkeeping is one of the
career paths that will allow all individuals the opportunity to work in a
fast-paced career lifestyle in the accounting field. The primary
responsibilities for a bookkeeper include using software, spreadsheets
and online databases. The duties also include posting financial
transactions. In many cases, the bookkeeper is responsible for receiving
all of the cash, cheque and voucher transactions that take place in the
business.
Moreover, a budget analyst is also a potential job in accounting. Budget
analysis involves a correlation between project goals and budgetary
concerns. A budget analyst helps various organizations and businesses
organize and allocate their financial resources by developing and
executing budgets from them. They monitor spending to remain within
budget and estimate future spending requirements. In addition, budget
analysts spend most of their time analyzing data, evaluating budget
proposals, recommending spending costs, redistributing extra funds, and
preparing annual reports.
[Adapted from Struyk, 2019]

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1. Fill in the gaps in the definitions of accounting jobs below by
choosing the available words from the box.

Accountant
explore asses assists get
ensure give dedicate record

An accountant is a person whose job is to ………… financial records

and tax.
Accountants ………… that records are accurate and that taxes are paid
properly and on time.
Accountants also ………… financial operation services to individuals, and
help them create plans of action for improved financial well-being.
Bookkeeper
The bookkeeper is responsible to …………. all of the cash, cheque and
voucher transactions that take place in the business.
Budget analyst
A budget analyst various organizations and businesses to organize and
allocate their financial resources by developing and executing budgets
from them. Budget analysts ……….. most of their time analyzing data,
evaluating budget proposals, recommending spending costs,
redistributing extra funds, and preparing annual reports.

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2. According to the reading passage, in which accounting job does the
following duty belong? Check (√) the correct box.

Accountant Book Budget

keeper analyst
1. A person who is responsible for
managing software and online
database.
2. A person who handles an allocation of
inancial budget of an
organization.
3. A person who helps a
inancial operation of a business run
effectively.
4. A person who deals with data
analysis, budget proposals
evaluation, and annual report writing.
5. A person who assists individuals to
create action plans for inancial
well-being improvement.

3. Match the words with their meanings. See the example.

1. Company a. the action of conducting a business deal
2. Accountant b. a person who manages inancial accounts
3. Finance c. an estimate of income for a set period of time
4. Business d. an institution dealing with commercial
5. Bookkeeper business
6. Transaction e. the management of large amounts of money
7. Budget f. a selling and buying activity that someone is
engaged in
g. a person who keeps records of the
inancial affairs

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 Lesson Seven

Practice

Speaking
Section
Meeting People
Useful Phrases
Hello, Mr/Ms….. I’m ……
Good morning. How are you today?
It’s nice to meet you.
(It’s) nice to meet you too.
May I introduce to ….?
I’d like to introduce you to ……..
Have you met…..?
See you later. Cliptartstation.com Match the
words on the right with the correct questions

[a] What is your ……..? 1. office

[b] Where do you ……? 2. brothers and sisters
[c] How do you …….? 3. jobs
[d] Where is your ……..? 4. name
[e] Do you have any ……? 5. from
[f] What is your ……….? 6. work
[g] Where are you ………? 7. division
[h] What is your main ……? 8. card
[i] Do you have a name…..? 9. do
[j] Where will you ….? 10. go

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7. Write number [1 – 8] to put the conversation below in order, then
practice with your partner.

…………. Hello, I’m OK, thanks, but I’m lost.

…………. Oh, I see, fortunately I also will go to the
seminar. Come with me.
…………. Great! Then, where are you working?
…………. I am going to join a business and accounting
seminar at Plaza Hotel.
…………. Where will you go?
…………. I’m working as an accountant at one of a
company in this city.
…………. Hi, how are you?
…………. How lucky I am, It’s nice to meet a good
accountant like you.

Reading

Auditing can be defined as the objective evaluation and examination of the

financial statements of a company or an organization to ensure that the
records represent a fair and accurate view of the transactions they claim.
The audit can be conducted either internally by the employees of the firm
or the organization, or externally by a third party, i.e. outside firm. Stating
differently, Audit alludes to a process of checking, which is independent, of
the financial records of the firm or an organization, to opine on the
financial statements.

An audit is classified as internal or external, depending on the

interrelationships among participants. Internal audits are performed by
employees of your organization. External audits are performed by an
outside agent. Internal audits are often referred to as first-party audits,
while external audits can be either second-party or third-party. A first-party
audit is an internal audit conducted by auditors who are employed by the
organization being audited but who have no vested interest in the audit
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results of the area being audited. A second-party audit is an external audit
performed on a supplier by a customer or by a contracted organization on
behalf of a customer. Second-party audits tend to be more formal than
first-party audits because audit results could influence the customer’s
purchasing decisions. A third-party audit is performed by an audit
organization independent of the customer-supplier relationship and is free
of any conflict of interest. Third-party audits may result in certification,
registration, recognition, award, license approval, citation, fine, or penalty
issued by the third-party organization or an interested party. Third-party
audits for system certification should be performed by organisations that
have been evaluated and accredited by an established accreditation
board, such as the ANSI-ASQ National Accreditation Board (ANAB).

An auditor may also specialize in types of audits based on the audit

purpose, such as to verify compliance, conformance, or performance.
Some audits have special administrative purposes such as auditing
documents, risk, or performance or following up on completed corrective
actions. In some cases, an auditor complies with federal, state, and local
security legal requirements by studying existing and new security
legislation, enforcing adherence to requirements, and advising
management on needed actions.
[Adapted from Knechel et al., 2013]

Find the definition of the terms below by referring to the passage.

No Terms Definition

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 1. Audit …………………………………………………………………
…………………………………………………………………
…………………………………………………………………

2. Interna l Audit …………………………………………………………………

…………………………………………………………………
…………………………………………………………………

3. Externa l Audit …………………………………………………………………

…………………………………………………………………
…………………………………………………………………

According to the passage, in which auditing category does the following

statement belong? Check (√) the correct box.
No. Statements Interna External
1. It is performed by the
employees f r o m the related
organization.
2. It is also called as a second-
party or third-party audit.
3. It is often referred to a first-
party audit.
4. It is conducted by an outside
agent.
5. It tends to be more formal in
the process of auditing.
6. It may result in certification,
registration, recognition, award,
or even penalty issued by
external party.
According to the reading passage, in which paragraph are the
following main ideas? Match them correctly.

An auditor has specialization in

certain types of audit based on
Paragraph 1 the purpose.

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 An audit is an activity to evaluate
Paragraph 2
the financial reports of a company.

Paragraph 3 Audit could be categorized as

internal and external.

4. Answer the questions below based on the passage.

a. According to the passage, what is the purpose of an

auditing?
b. What does a first-party audit refer to?
c. What is the difference between first-party audit and second- party
audit?
d. Who has the authority to issue audit certification?
Mention the special administrative purposes of some audits

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 Lesson Nine

Auditing: Part Two

Speaking
i
Inviting Colleagues
An invitation is a request, a solicitation, or an attempt to get another
person to join you at a specific event. An invitation is either accepted or
refused. In a business environment, employees often encounter a
situation where they are required to make an invitation for their business
colleagues. It can be to attend a meeting, do a special job, and even go for
lunch. Therefore, making an invitation is a particular skill that an
employee must be acquired.

Study the following conversation.

Sure. There must be a finance 1

book I want to buy. How about Would you join me to the book fair? There
you? are a lot of new release books about
3
accounting.
I think that is interesting.
Let’s go then.

As depicted in the above conversation, there are some expressions to

deliver and respond to an invitation. To be noted, an invitation can be
either accepted or refused. To enrich your vocabulary in giving, accepting

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 and refusing an invitation, look at the following phrases and how they are
used in a sentence

Do you want to go to the city library to find a

book about how to write a financial report?
∞ Would you like to go with me for lunch?
∞ Would you be interested in going to an
International
Conference on Sharia Finance?
∞ How do you fancy visiting our new office?
∞ Care to come over for a weekly meeting?
∞ I was just wondering if you would like to
go with me at the book fair.
∞ We’d be delighted to have you over to
the opening of Indonesian accountant exchange Dreamstime.com
program.

∞ Sure. What time?

∞ I’d love to, thanks.
∞ That’s very kind of you,
thanks.
∞ What a great idea, thank you.
∞ Sure, when should I be there?

∞ I can’t. I have to work.

Sorry.
∞ I am sorry. I have another
appointment.
∞ That’s very kind of you,
but actually
something else this I am
afternoon.
∞ Well, I’d love to, but I am already
going out to my office.
∞ I’m really sorry, but I have got
something else

Page 2 of 4
 Reading
Section
The man in the picture is thinking about what a budget analyst
should do. Can you help him to find his job?
A budget analyst helps organizations and companies manage their
finances. These individuals prepare budgets and develop projections
based on past economic and spending trends. Budget analysts are crucial
for maintaining profitability, reaching financial goals and attaining
long-term growth. They may work in a number of industries with small and
large companies. Jobs can be found with financial firms, healthcare
providers, educational institutions, government agencies and more.
One of the main responsibilities of budget analysts is developing a
company’s budget. This may require the analyst to work with project and
department managers, as well as stakeholders, to figure out the benefits
and costs of different programs, according to the Bureau of Labor
Statistics. Budget analysts also research data, analyse their findings and
review financial records. Throughout the process, the analyst may
recommend spending cuts and funding levels.
Budget analysts are also tasked with making sure that bookkeeping,
budgets and other finances comply with company standards, laws and
regulations. They may recommend changes to other stakeholders and
management regarding more efficient ways to use their funds. Additional
duties include providing technical analysis, monitoring spending for
deviations and preparing annual reports and other documents.
Budget analysts must also make sure they are informing program
managers of the availability and status of funds to reduce the chance that
the company will go over budget. Monitoring spending is critical to ensure
this doesn’t happen, and the budget analyst must also estimate future
financial needs based on the organization’s current spending and budget.
[Adapted from Brooks, 2018]
1. Do the following statements agree with the views of the writer in
the passage above? Thick (√) the correct answer.

Page 3 of 4
 YES if the statement agrees with the writer. NO if the statement
contradicts the writer.

No. Statements Yes No

1. The main duty of a budget analyst is to

help an organization manage its finances.

2. A budget analyst does not have the

responsibility to analyze data and interpret the
findings.

3. A budget analyst plays an important role

in achieving inancial goals.
4. A budget analyst prepares budgets and develops
projections based on future
economic and spending trends.
5. One of t h e other duties of a budget analyst
include technical analysis and preparing annual
reports.
2. Find eight words from the passage above in the following box by referring to the
definition provided in the table. It can be vertical, horizontal, or diagonal.
Number 1 is done as an example.

A R I S K U R O K P B U D G E T
I P R O F I T R T U C I T Y I M
U N E T E P O L N O O I L G S A
A A D D E A T U K I M L O R E N
E N T U R P R I S E P E U O D A
I D E R S T I L O K A E S W T G
D R E S U T T I N E N D E T U E
D E V E L O R I B L Y O P H S R
F I N A N C E Y S T S I D E A I
S T A K E H O L D E R O N Z E C

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