会计英语,第四章
会计英语Chapter 4 Current Assets
会计英语
出版社 经管分社
会计英语Chapter 4 Current Assets
会计英语
出版社 经管分社
4.1 Cash
Accountants define cash as money on deposit in banks and any items that banks will accept for deposit. These items include not only coins and paper money, but also checks, money orders and travelers’ checks. Banks also accept drafts signed by customers using bank credit cards, such as Visa and MasterCard. Thus sales to customers using bank cards are cash sales, not credit sales, to the enterprise that makes the sale.
全英文初级会计第四章
-Indirect cost allocated to A = $2 × 3000 = $6000
-Indirect cost allocated to B = $2 × 2000 = $4000
To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
4-6
Costing Approaches
• Actual Costing – allocates indirect costs based on the actual indirect-cost rates times the actual activity consumption
100 hours
Overhead Allocation
Rate:
$1,000 ÷ 100 DLhrs
= $10/DLhr
Overhead Applied to Job #123:
$10/DLhr X
5 hours used in Job #123
= $50
The Cost Object:
Job #123
DM DL OH
$100 $200
$50
Total Cost: $250
To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
会计专业英语-Chapter4 Inventory and cost of goods sold
Chapter4 Inventory and cost of goods sold SpotlightDanny opened a supermarket named Happy Mall. There are variety kinds of inventories in the supermarket. The merchandise inventory is Happy Mall’s largest asset while the cost of goods sold is the largest expense. How to manage these inventories is the most important issue for the company. However, the cost of the purchase of each batch may be different. The different cost of goods sold may lead to different net income. So how to measure the cost of the inventory sold? How to measure the ending inventory?The management of inventory has significant impact to an entity, especially commercial enterprise. Reasonable inventory management can help the enterprise to calculate the profit and report the assets correctly. Through the control of the inventory, the enterprise can achieve the ultimate goal of inventory management-Improvement of economic benefit.Text1 Classifications of inventoryInventories are also called merchandise inventories. Inventories can include any of the followings:•Finished Goods product•Work in progress being produced•Materials•Purchased goods2 Inventory and cost of goods soldExhibit 4-1Financial statement Account StatusBalance sheet Inventory On handIncome statement Cost of goods sold Sold3 Gross profitFor merchandising firms, an initial step in assessing profitability is gross profit. Gross profit, also called gross margin, is the excess of sales revenue over cost of goods sold. It is the difference between sales revenues and the cost of goods sold.Gross profit= Sales revenue-cost of goods sold4 Accounting for inventoryThere are 2 main types of inventory accounting systems:•Periodic inventory system•Perpetual inventory system4.1 Periodic inventory systemThis system in which the cost of goods sold is computed periodically by relying solely on physical counts without keeping day-to-day records of units sold or on hand.The periodic inventory system does not involve a day-to-day record of inventories or of the cost of goods sold. Instead we compute the cost of goods sold and an updated inventory balance only at the end of an accounting period, when we take a physical count of inventory.Beginning balance+ Newly purchase-Cost of goods sold=Ending balanceCost of goods sold=Beginning balance+ Newly purchase-Ending balanceExhibit 4-2Goods available for sale -Inventory left over = Cost of goods sold 4.2 Perpetual inventory systemIt is a system that keeps a running, continuous record that tracks inventories and the cost of goods sold on a day-to-day basis. The daily record helps managers control inventory levels and prepare interim financial statements. In addition to this continuous record-keeping process, companies periodically physically count and value the inventory.No matter which method a company choose to manage its inventory, it should conduct a physical count at least once a year to check on the accuracy of the continuous record.Journal entry:①Inventory is purchased:Dr: Inventory. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .XXXCr: Cash. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . XXX②Inventory is soldDr: Cash. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . XXXCr: Sales revenue. . . . . . . . . . . . . . . . . . . . .. . . . .XXXDr: Cost of goods sold. . . . . . . . . . . . . . . . . . . . .. .XXXCr: Inventory. . . . . . . . . . . . . . . . . . . . .. . . . . . . . .XXX5 The various inventory costing methodThere is a challenge to recognize the cost of goods sold. Because the unit price is different every time when purchase inventory.There are four accepted inventory method•Specific identification method•Average cost method•First-in, first out•Last in, first out5.1 Specific identification methodIt is also called specific identification method. Specific identification method concentrates on physically linking the particular items sold with the cost of goods sold that we report. Business cost their inventories at the specific cost of the particular unit. This method is relatively easy to use for expensive, low volume。
会计英语chapter 4
Example ----perpetual system ----perpetual
On Jan.1, the inventory account balance was $7,000, the whole year sales revenue was $10,000, on Dec.31, Inventory account balance was $2,000, and when its actual counted value was $1,000. cost: 7000 – 2000 = 5000 profit 10000 – 5000 = 5000 2000 – 1000 = 1000 ------- operating expenses
Service enterprise VS merchandising concern
Service enterprise Net income is then calculated by deducdeducting expenses from commissions earned or fees earned. net income = fees (commission) revenue - operating expenses.
Purchase, sales revenue and cost of goods sold
Merchandise purchases
gross purchase & net purchase net purchase = gross purchase – any purchase discounts – any purchase returns and allowances + transportation costs (paid by the buyer)
《会计英语》Accounting04解读
4
Coins (硬币）
currency （纸币）
Cash is defined as any deposit banks will accept.
Checks
Money orders （汇票）
A cash equivalent is an investment that is readily convertible to a known amount of cash and is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes. 现金等价物是指企业持有至到期，容易兑换成确定金额的现 金，并且市场价值不随利率的变化有较大波动的一项投资。
June 15, 200x Petty Cash 250 Cash To open the petty cash fund
250
13
Example of Petty Cash Payments
• Jose is the petty cash custodian responsible for the fund. • On June 20, he purchased supplies in the amount of $70. • For each disbursement, he prepares a petty cash ticket. • At all times the amount of cash in the petty cash fund plus the petty cash tickets must equal $250.
实用会计英语unit4简明教程PPT课件
4-2
实用会计英语 / Practical Accounting English
Guidance 学习指导
Contents
04
【Unit 04】
Accounting for Manufacturing Business
1 2 3
4-3
【 LESSON 】
MANUFACTURING BUSINESS AND ITS OPERATING CYCLE
MODULE 1
A. Reading material
1. Operation cycle of a manufacturing business The major operational activities of manufacturing businesses are purchase, manufacturing and sale of products. Examples of manufacturing business include General Motors produces automobiles, Nike produces Athletic shoes, Coca-cola produces beverages and Sony produces stereos, televisions and radios, etc. Most of the accounting procedure discussed in previous lessons applies equally to manufacturing business.
1. 制造企业的经营活动 制造业企业的主要经营 活动包括采购、生产和销售 产品。前面课程中所讲到的 大部分内容对制造业的会计 核算都适用。4ຫໍສະໝຸດ 7MODULE 2 手不释卷
会计专业英语课件Chapter 4
(1) Acquisition
▪ Classified as measured at FVTOCI, an investment in debt or equity instruments is recorded at its cost at initial recognition, including the purchase price and transaction costs that are directly attributable to the acquisition of the financial asset.
【Example 4-3】
▪ Take the bonds purchased by company W on June 30, 2019 for illustration. Assume that company W classified these bonds at FVTOCI. On December 31, 2019, the quoted market price of the bonds was $1,030,000. On acquisition, company W should make the following entry:
• Only investments in debt, such as bonds, satisfy the recognition requirements for financial instruments measured at amortized cost since investments in stocks do not produce interest or refund the principal.
• is prepared to amortize bond discount or premium for each interest receipt.
第4章 Current Assets《会计英语》PPT课件
Unit 1 Cash and Its Control
➢Efficient management of cash includes measures that will:
(1)Provide accurate accounting for cash receipts, cash payments and cash balances;
(4)Make all payments by check.
Unit 1 Cash and Its Control
➢BANK STATEMENT AND BANK RECONCILIATION. Since all cash receipts are to be deposited intact in the bank and all significant cash disbursements are to be made by check through the bank, each month the bank will provide the depositor with a statement of the depositor’s account, accompanied by the checks paid and charged to the account during the month. A bank statement shows the balance on deposit at the beginning of the month, the deposits, the checks paid, any other debits and credits during the month, and the new balance at the end of the month.
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C4 - 14
Advantages of Using Periodic Inventory
• The accounting records for inventory and
cost of goods sold are updated only at the end of the accounting period (month, year, etc.). • Thus, in the middle of the period, there is no record that shows how much inventory is on hand or how much has been sold (COGS). • This is an easy, inexpensive method.
C4 - 10
COGS Schedule
Assume that each unit cost $6
Units
Beg. Inventory + Purchases = Goods Available - End. Inventory = Cost of Goods Sold 3 8 11 5 6
Cost
C4 - 12
4-2 Two inventory systems
P110
• Two main systems for keeping merchandise inventory records:
–Perpetual inventory system - a system that keeps a running, continuous record that tracks inventories and the cost of goods sold on a day-to-day basis –Periodic inventory system - a system in which the cost of good sold is computed periodically by relying solely on physical counts without keeping day-to-day records of units sold or on hand.
C4 - 1
Learning Abstract
4-1 Service enterprise Vs merchandising concern 4-2 Two inventory systems 4-3 Purchase, Sales Revenue and Cost of Goods Sold 4-4 Alternative Income Statement Formats 4-5 Worksheet and Closing Entries 4-6 Practices in China 4-7 Acid-test Ratio, Gross margin Ratio
C4 - 2
4-1 Service enterprise Vs Merchandising Concern
– Service enterprises provide services or intangible products to their customers. – Merchandising-sector companies purchase and then sell tangible products without changing their basic form.
C4 - 9
Cost of Goods Sold
The goods available for sale represents the amount that “could have been” sold. The goods that are NOT sold are called “ending inventory.” Subtracting the ending inventory from the goods available for sale determines the amount of “cost of goods sold”.
Chapter 4 Merchandising Activities and Accounting Information Systems Learning Objectives
1. Nature of Merchandising Business 2 a. Accounting for Purchases 2 b. Accounting for Sales 2 c. Transportation Costs 2 d. Merchandise Transactions 3. Merchandising Chart of Accounts 4. Merchandising Income Statement 5. Merchandising Accounting Cycle 6. Acid-test Ratio, Gross margin Ratio
C4 - 16
4-3 Purchase, Sales Revenue and Cost of Goods Sold
• In the perpetual system, purchases of merchandise directly increase the Inventory account, and purchase returns and allowances and sales directly decrease the Inventory account. • Inventory amounts are updated each time an inventory transaction is processed.
Merchandise Inventory
Equals : Gross Profit Minus: Selling and Administrative Expenses Equals: Net Income
C4 - 8
Tracking Inventory Costs: Goods available for sale
C4 - 3
Income Statement
Service Business
Fees earned Operating expenses Net income
$XXX –XXX $XXX
C4 - 4
Income Statement
Merchandising Business Sales Cost of Merchandise Sold Gross Profit Operating Expenses Net Income $XXX –XXX $XXX –XXX $XXX
C4 - 13
Advantages of Using Perpetual Inventory
Continuous determination of inventory value Continuous determination of gross profit Affordable with computers, scanners, and bar codes on most products Perpetual inventory accounting provides management controls Managers know which items are selling fastest and the profit margin on those items
$18 48 $66 30 $36 BI + Purch GAFS - EI COGS
All available goods must be accounted for as either ending inventory or COGS.
C4 - 11
Inventory Systems
• The key to calculating cost of goods sold is accounting for the ending inventory. • Cost valuation - process of assigning specific historical costs to items counted in the physical inventory
C4 - 17
1. Purchases and Purchase Returns
• In a perpetual system, the journal entries are:
To record the purchase of merchandise : Merchandise inventory Accounts payable (or Cash) To record the return of merchandise: Accounts payable Merchandise inventory
C4 - 5
Income Statement Comparison
Service Business Fees earned Operating expenses Net income $150,000 120,000 $ 30,000
20% of revenues
Merchandising Business Sales revenue Cost of mdse. sold Gross profit Operating expenses Net income $600,000 450,000 $150,000 120,000 $ 30,000 75% of revenues
C4 - 15
Taking a Physical Count
• Regardless of the type of accounting