Английский язык = English. Учебное пособие-1
.pdf4.The company’s … are enormous.
5.A sense of humour is a great … in this job.
6.He had his book printed at his own ….
7.I don’t know how the government can justify the … of the project.
8.Her company sent her to Paris and paid all her …
9.Half of our … goes on rent.
10.Government helps for … families.
11.The … of traffic is always slow at rush hours.
12.The factory manager used a flow-chart to explain the …
13.Invoice the company for any … that you incur in the course of your work.
14.The company incurred heavy … in its first year.
15.The British teachers in China were paid in local …
16.They are expecting of over $2 million … in the current year.
17.A current account is a bank account which usually doesn’t earn … and from which money can be taken out any time by cheque.
Exercise 10. Study the meaning of the words cost, price, charge.
Price is the amount of money needed to buy a particular object. Cost is like a price but is used less for objects, and more for
services.
Charge means a sum of money demanded especially for allowing someone to do something.
Exercise 11. Choose the correct word.
1.What is the price/cost of this watch?
2.How much did this watch cost/charge you?
3.How much did he charge/cost you for repairing the car?
4.There will be a small charge/price for admission to the museum.
5.The builder costed/priced/charged the job at $150.
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GRAMMAR EXERCISES
Exercise 1. Explain the use of modal verbs in the following sentences.
1.Please inform us when you could deliver the goods.
2.The steamer may arrive tomorrow morning.
3.The experts admit that the goods may have been damaged in transit.
4.A company may hold goods that it doesn’t own.
5.The accountant must consider the intent of the sales agreement.
6.Acquisitions of inventory should be recorded by the buyer when legal title passes to the buyer.
7.When determining whether goods in transit should be included in inventory the company must review the terms of the shipping agreement.
8.Specific identification is to provide useful information about inventory items.
9.I had to go there yesterday.
10.He ought to help them.
11.You need not go there.
Exercise 2. Translate the following sentences into English using modal verbs and their equivalents.
1.Может быть, он и вернулся в Москву, но я его еще не видел.
2.Товары, должно быть, были упакованы очень тщательно.
3.Директор еще не пришел. Он должен быть в 11 часов. Вам придется подождать.
4.Мы должны были встретиться в 6 часов, но представитель компании не пришел.
5.Согласно контракту, товары должны быть доставлены не позже 1 сентября.
6.Мне недолго пришлось ждать бухгалтера.
7.Счета нужно проверить.
8.Письмо следует отослать сегодня.
9.Товары, может быть, прибудут раньше, чем вы ожидаете.
10.Они смогли выполнить все условия договора.
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READING SECTION
I. Read Text A and do post-text exercises.
TEXT A
Inventory Valuation:
Determining Cost and Using Cost Flow Assumptions
Inventory is the term used in the United States to describe the assets of a company that are intended for sale in the ordinary course of business, are in the process of being produced for sale, or are to be used currently in producing goods to be sold. In many other countries, the term stock is used for inventory. What constitutes inventory for a particular company depends on the normal operating activities of that company.
Proper identification of inventory items and valuation of inventory are important because inventory can have a material effect on both the balance sheet and the income statement. The inventory of manufacturing and merchandising companies often as one of the most significant assets, in dollar amount, is reported on the balance sheet.
The basis issues raised in accounting for and reporting inventory are:
–classifying inventories by type;
–selecting an inventory accounting system;
–identifying items to be included in inventory;
–determining the expenditures and cost allocations to be included in inventory cost;
–making assumptions about inventory cost flow, when necessary;
–choosing among alternatives to the cost basis of valuing inventory, when necessary;
–estimating inventory costs when a physical count of inventory items is not practicable or possible.
Major Inventory Classifications
The inventory classifications reported on the balance sheet and costs included in those inventory classifications depend on
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the normal operating activities of the company. A merchandising company ordinarily purchases goods for resale to customers, either at wholesale or at retail. As consumers, most of us are more familiar with retail merchandising companies than we are with wholesale merchandising companies. For example, Sears, Montgomery ward, the local Oldsmobile dealership, and the local grocery store are primarily retailers because most if not all of their sales are going to consumers. All merchandising companies, whether wholesalers or retailers, have only one general class of inventory – merchandise inventory, or simply inventory. The merchandise inventory account, however, often consists of several specific inventories of goods intended for sale. Merchandise inventory costs normally include the purchase price of the inventory plus any other costs incurred to get the inventory items in location and condition for sale to customers.
A manufacturing company produces the goods that it sells, rather than purchasing completed goods for resale. As a result, manufacturing companies normally have three types of inventory, each of which is associated with a stage of the production process: raw materials inventory, work-in-process inventory, and finished goods inventory.
Raw materials inventory consists of goods and materials that ultimately will become part of the manufactured product but that have not yet entered the production process. For example, the raw materials inventory of an automobile manufacturer might include sheet metal, nuts, bolts, and paint.
Work-in-process inventory consists of units in the production process that require additional work before becoming finished goods. The cost of raw materials inventory in work-in- process inventory are the costs of the raw materials incorporated in the product and the cost of labour applied directly to the completion of the product to date, plus manufacturing overhead costs incurred before the date when the amount of work-in-process inventory is determined. Manufacturing overhead costs include the cost of supplies used in the production process, such as machine oil; the cost of labour necessary to support the production process; insurance and utilities ex-
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pense; and depreciation on property, plant, and equipment employed in the production process.
Finished goods inventory consists of units that have been completed and are available for sale at the end of the accounting period. The cost of finished goods includes the costs of raw materials and labour that can be traced directly to the completed product, as well as manufacturing overhead costs incurred during the production process. [15, pp. 398–399]
Exercise 1. Find the English equivalents of these phrases in the text.
Находятся в процессе производства; хозяйственная деятельность; балансовый отчет; существенные активы; коммерческие товарные запасы; товары, предназначенные для продажи; отчет о результатах хозяйственной деятельности, каждая из которых соответствует; производственный процесс; незавершенное производство; затраты; прежде, чем стать; накладные расходы; издержки; можно непосредственно перенести.
Exercise 2. Answer the following questions.
1.What does the term “inventory” mean?
2.What are the major inventory classifications that might be reported in the balance sheet of a manufacturing company? Of a merchandising company?
3.Why are proper identification of inventory items and valuation of inventory so important?
4.What does the inventory classification depend on?
5.A merchandising company has different classes of inventory, doesn’t it?
6.What do merchandise inventory costs normally include?
7.What does raw-materials inventory consist of?
8.What is normally included in work-in-process inventory?
9.What do manufacturing overhead costs include?
10.What type of inventory do finished goods available for sale belong to?
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Exercise 3. Complete the following statements.
1.Inventory is the term …
2.The term “stock” is used for …
3.Inventory can have a material effect on both …
4.The inventory classifications depend on …
5.All merchandising companies have …
6.Manufacturing companies normally have …
7.The cost of raw materials inventory includes …
8.Work-in-process inventory consists of …
9.Finished goods inventory includes …
Exercise 4. Translate the following sentences from Russian into
English.
1.Товарно-материальные запасы компании зависят от рода ее хозяйственной деятельности.
2.Инвентаризация существенно влияет на балансовый отчет компании.
3.Коммерческая компания продает товары оптом или
врозницу.
4.Компания-производитель выпускает товары, а не закупает готовые товары для продажи.
5.Компания-производитель имеет три типа материальных ценностей, каждый из которых соответствует этапу производственного процесса.
6.Транспортные расходы компании включаются в инвентарную ведомость сырья.
7.Накладные расходы включают стоимость дополнительных средств, используемых в производственном процессе.
8.Инвентарная группа готовой продукции включает в себя накладные расходы, понесенные в процессе производства.
Exercise 5. Divide the text into several logically complete parts. Give a heading to each of them.
Exercise 6. Give the definition of inventory.
Exercise 7. Find the sentence in the text which says about the importance of proper identification and valuation of inventory.
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Exercise 8. Give the main characteristics of a merchandising company.
Exercise 9. Name all types of inventory of a manufacturing company.
II. Read Text B and answer the questions.
1.How does the periodic inventory system differ from the perpetual inventory system?
2.What is meant when cost of goods sold is referred to as a residual amount under the periodic inventory system?
3.What disadvantages does the periodic inventory system have?
4.What points do we determine in accounting for inventory?
5.What kind of book-keeping system can an accountant use for inventory?
6.When the periodic inventory system is used, the amount of inventory on hand is determined continuously, isn’t it?
7.What advantages does the perpetual inventory system have?
TEXT B
Inventory Accounting Systems
In accounting for inventory we need to determine both the amount of inventory on hand of the end of the accounting period, which is reported as a current asset on the balance sheet, and the cost of inventory sold during the accounting period, which is reported as a deduction from sales on the income statement. The amount of inventory on hand and the cost of inventory sold can be determined by either the periodic inventory system or the perpetual inventory system.
As the name implies, when the periodic inventory system is used, the amount of inventory on hand is determined only periodically. All inventory acquired during an accounting period is recorded by debiting the purchases account. The amount of inventory at the end of the accounting period is determined by counting inventory units. The dollar amount is the purchases account at the end of the accounting period is added to the cost of the inventory on hand at the beginning of the period to de-
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termine the total cost of goods available for sale. The cost of this ending inventory is deducted from the cost of goods available for sale to determine the cost of goods sold. As a result, when the periodic inventory system is used, a physical count of inventory is required, and cost of goods sold is a residual amount that is dependent on the amount of ending inventory.
When the perpetual inventory system is used, there is a continuous record of changes in inventory. Inventory, rather than purchases, is debited when inventory is acquired. Sales of inventory are recorded by debiting the cost of goods sold account and crediting the inventory account for the cost of merchandise sold. Thus, the perpetual inventory system provides a continuous record of the balances in both the inventory account and the cost of goods sold account.
If the company has a computerized book-keeping system, it is possible to record additions to and withdrawals from inventory almost instantaneously. Moreover, development and growth of computerized book-keeping systems have made the perpetual inventory system cost-effective for an increasing number of companies. The use of optical scanners when recording sales at the cash register can be incorporated into a perpetual inventory system.
The essential distinction between the periodic inventory system and the perpetual inventory system is that, under the periodic system, the cost of inventory sold is determined by deducting the cost of the ending inventory from the cost of inventory available for sale during the period. Under the perpetual system, in contrast, the cost of inventory sold is subtracted from the cost of inventory available for sale to give the cost of the ending inventory.
The periodic system requires a physical inventory count and serves only to verify the inventory records when a perpetual system is used. The periodic inventory system is best suited to companies with large quantities of low-cost inventory items, such as a hardware store. The perpetual system is better suited to high-cost inventory items for which continuous monitoring
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of inventory is important as in the case of the inventory of an automobile dealership. [15, pp. 400–402]
Exercise 1. Complete the following statements.
1.In accounting for inventory we need to determine …
2.There are two inventory systems …
3.When a periodic system is used, a physical count …
4.The cost of ending inventory …
5.When the perpetual inventory system is used, there is …
6.Development of computerized book-keeping systems has made the perpetual inventory system …
7.The essential distinction between the two inventory systems is …
8.The periodic inventory system is best suited to …
9.The perpetual system is better suited to …
Exercise 2. Describe the following.
1.The periodic inventory system.
2.The perpetual inventory system.
III. Read Text C and give a summary of it.
TEXT C
Goods in Transit
Acquisitions of inventory should be recorded by the buyer when legal title passes to the buyer. Often, however, it is not easy to determine exactly when title passes. Because the financial statements normally are not materially affected, companies usually record inventory acquisitions as goods are received. When a company follows this practice, the purchases account (when a periodic system is used) or the inventory account (when a perpetual system is used) and related accounts payable must be adjusted for any goods in transit and for which title has passed to the buyer as of the end of the accounting period.
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When determining whether goods in transit should be included in inventory, the company must review the terms of the shipping agreement. If goods are shipped “f.o.b. [free on board] shipping point”, legal title and the responsibilities of ownership, such as insurance and shipping costs, pass to the buyer when the seller delivers the goods to the shipping agent. In this case, goods in transit should be included in the buyer’s inventory.
If goods are shipped “f.o.b. destination”, the goods belong to the seller until they are delivered to the destination point by the shipping agent. In this case, title and the responsibilities of ownership remain with the seller until the goods reach the specified destination, and goods in transit should be included in the seller’s inventory. When goods are shipped “f.o.b.” destination, the transportation costs are at the expense of the seller.
When there is some question as to whether title has passed to the buyer, the accountant must consider the intent of the sales agreement, special industry practices, normal accounting policy of the buyer, and similar factors. For example, it is a common practice to treat goods manufactured for a special order as being sold as soon as they are physically separated from the manufacturer’s regular inventory. Special-ordered goods are not assets (inventory) of the manufacturer because the economic benefit embodied in such goods can accrue only to the customer who placed the special order [15, p. 404].
IV. Translate text D in writing.
TEXT D (1)
Consigned Goods
A consignment is a transaction in which one party, the consignor, ships goods to a second party, the consignee, who attempts to sell the goods for the consignor. The consignee is responsible for exercising due care and protecting the goods from loss or damage but incurs no liability to the consignor. When goods are sold by the consignee, the sales price less a selling
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