- •Передмова
- •An accounting overview
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •1) Answer the following questions about accounting. Questions with asterisks (*) cannot be answered directly from the text.
- •2) Oral study.
- •V. Language study
- •1) Substitute appropriate terms for the italicized words or phrases in the sentences below.
- •2) Translate the sentences.
- •Unit 2 a balance sheet
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •1) Answer the following questions about accounting.
- •2) Oral study.
- •V. Language study
- •1) Look at the terms in the left-hand column and find the correct synonyms or definitions in the right-hand column. Copy the corresponding letters in the blanks.
- •2) Translate the sentences.
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •1) Answer the following questions about accounting.
- •2) Oral study.
- •V. Language study
- •1 )Look at the terms in the left-hand column and find the correct synonyms or definitions in the right-hand column. Copy the corresponding letters in the blanks.
- •2) Translate the sentences.
- •Unit 4 An annual report
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •1) Answer the following questions about accounting.
- •2) Oral activity.
- •V. Language study
- •1) Look at the terms in the left-hand column and find the correct synonyms or definitions in the right-hand column. Copy the corresponding letters in the blanks.
- •2) Translate the sentences.
- •Overheads and their recovery
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •1) Answer the following:
- •2) Oral activity.
- •V. Language activity
- •1) Look at the terms in the left-hand column and find the correct synonyms or definitions in the right-hand column. Copy the corresponding letters in the blanks.
- •2) Translate the sentences.
- •Unit 6 The auditing framework
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •Answer the following questions:
- •Say whether the following statements are true or false according to the text.
- •V. Language study
- •1) Look at the terms in the left-hand column and find the correct synonyms or definitions in the right-hand column. Copy the corresponding letters in the blanks.
- •2) Translate the sentences.
- •Unit7 Methods of depreciation
- •II. Reading
- •III. Word study
- •IV. Comprehension check
- •1) Answer the following:
- •Unit8 Funds: inflow and outflow
- •Reading
- •III. Word study
- •V. Language study
Unit8 Funds: inflow and outflow
I. Pre-reading activity
Discuss the following questions.
What sources of funds for a company can you think of? What are the important differences between these sources?
How does a company may use its funds?
What example of a cost which doesn’t involve cash leaving the company can you give?
Reading
Read the text and answer the questions that follow it. Study new terms.
Funds: inflow and out flow
Sources and uses of funds
Sources:
funds generated by trading operations; cash received from sales net of cash paid out for expenses ( the term cash flow is sometimes given to this amount);
funds injected into the business on a long-term basis; issues of shares plus any premium received on issue; debentures and other long-term loans;
funds released from long-term applications for use elsewhere in the business; sales of fixed assets such as land, buildings, plants and vehicles; loans to subsidiary companies repaid by them;
funds lent to the business on a short-term basis; trade creditors; bank loans and overdrafts; amounts payable to the Inland Revenue; bills of exchange payable.
Uses
funds lost in trading operations, i.e. when the payment of expenses exceeds receipts from sales;
funds used to acquire permanent assets such as land, buildings, plants, vehicles, fixtures and fittings and long-term investments;
funds paid away outside the business to repay debentures and loan stock, or to redeem share capital;
funds invested outside the business in loans made to subsidiary companies;
funds used to acquire assets of a short-term nature, stocks of material, work in progress and finish goods; trade credit allowed to debtors who have no paid yet for goods sold to them; short-term investments as a temporary repository of idle funds; bills of exchange receivable.
Not that already, with this simple analysis shown above items concerning funds moved into and out of the business on a long-term basis, they are being mixed in with short- term movements, and the source of application of funds from changes in the asset structure.
The funds generated by trading operations can be computed as in sources above, but an alternative method of calculating the same figure is to take the net profit before tax and add back all non-cash costs that have been deducted in the profit calculations. A good example of a cost which has not caused an outflow of cash during the year is depreciation. It is a means of spreading over a period of years the cash spent when a fixed asset was originally purchased. The term cash flow is often used for net profit plus depreciation and any other non-cash costs identified during the year.
If sources exceed uses there will be a balance of cash representing funds provided but not yet put to use in the business.
The ‘capital employed’ acts as a reservoir into which funds flow from four major streams. The funds are then tapped off as a result of managerial decisions to irrigate the five fields, and any funds remaining in the reservoir will be presented by the bank balance. If, however, uses exceed sources, the reservoir will run dry and, unless extra short-term credit can be arranged at short notice, some of the uses will not receive all the funds they need and the business suffer as a result. Funds, like water, can run in different directions, so funds from any source can be used to finance any use, although it is imprudent to use short-term funds to acquire fixed assets, unless long-term funds will be raised to cover the position quickly.