ACTCOMM C-35

Activity 1: Vocabulary Activity

Word Definition Part of Speech

These are data about monetary transactions of a person or
Financial Information a business (Bragg, 2018) Noun

Parties are those who are involved in a transaction. They

can be the “Primary Users” of financial information or its
Parties “Other Users.” Primary users are creditors/lenders, Noun
suppliers, and investors. Other users are the government,
management, and the public (Rice, 2020).
Offset in accounting generally means creating contra
Offset accounts to offset another account on the balance sheet Verb
(Wright, n.d.)
Gains are transactions that occur outside a company’s
Gains main business activities; they result in the sales of an Noun
asset instead of an inventory (Accounting Coach, n.d.)
They are decreases in a company’s income that are
caused by activities outside the company’s normal
Losses Noun
operations (What is a Loss?, n.d.). They can be lawsuits,
etc.
Assets are resources with high value that individuals,
Assets corporations, or countries possess expected to provide Noun
future benefits (Barone, 2020)
Current value are assets and liabilities measured at the
Current Value current or present value at which they can be sold or Noun
settled (Bragg, 2018).
“An accounting standard is a common set of principles,
Accounting Standards standards, and procedures that are basis of financial Noun
accounting policies and practices (Kenton, 2020).
Activity 2: Answering the Questions to the Reading Comprehension Questions

1. According to the text there is only one standard of presenting financial information?

According to the text, GAAP is the standard widely recognized by accountants. However,
companies can also choose among 3 standards provided which are: local accounting standards;
International Financial Reporting Standards (IFRS); and US’ GAAP. So, the answer is no since
there are other standards mandated by a specific country or location to present financial
information.
2. The text mentioned a practice that most English companies when presenting their assets and
liabilities. What is this called?
The practice is called offsetting or the process of offsetting unrealized gains from unrealized
losses, or to re-value long term assets upwards, provided sufficient proof of the current value can
be shown.
3. According to the text what is the common way of presenting financial information?
According to the text, there is no exact way of presenting financial information as it is still
dependent on a specific county’s laws. However, it also indicates that some countries such as
USA and Japan are allowed to use the standards of the International Accounting Standards
Committee but should include a reconciliation to domestic or local GAAP. So a common way to
present financial information is through the use of the standards of the International Accounting
Standards Committee.
 References

Accounting Coach. (n.d.). gains definition. Retrieved from Accounting Coach:

https://www.accountingcoach.com/terms/G/gains

Barone, A. (2020, May 28). Asset. Retrieved from Investopedia :

https://www.investopedia.com/terms/a/asset.asp#:~:text=An%20asset%20is%20a

%20resource,or%20benefit%20the%20firm's%20operations.

Bragg, S. (2018, October 07). Financial Information. Retrieved from AccountingTools:

https://www.accountingtools.com/articles/2017/5/10/financial-

information#:~:text=Financial%20information%20is%20data%20about,third%20party

%20credit%20analysis%20firms

Kenton, W. (2020, May 17). Accounting Standard. Retrieved from Investopedia:

https://www.investopedia.com/terms/a/accounting-standard.asp

Rice, J. (2020). College Accounting. New York: McGraw-Hill Education.

What is a Loss? (n.d.). Retrieved from Reviso:

https://www.reviso.com/accountingsoftware/accounting-words/loss/#:~:text=Definition

%3A%20In%20financial%20accounting%2C%20a,or%20a%20loss%20from

%20lawsuits.

Wright, T. (n.d.). Offset Accounting. Retrieved from azcentral:

https://yourbusiness.azcentral.com/bad-debt-reserve-hit-profit-loss-statement-21191.html