Seltion of th trms Th trms ar dirtl lvantto th ara of.aounting.V gnraltms ar not inludd.no ar vr thnial ons.

only in stion l ar mor basi trms inludd whr w think that thir f othr mor spializdtrms.Finally' th languag is important to th undrstanding undstanding modl is pdominantlBitish nglish; and th aountingpriniplsand pratisa thos urrntly i n u s i n t h U K .

oNTNTS Stion 1 Fats and figurs Th Basis st l Introduing ounting 1 st 2 Fats and figus Tst 3 lntroduingaounting2 st 4 Aounting Phrass st 5 st 6 prssing hang st 7 positions ofhang Thnology Tst 8 Tst 9 Computing Fundmntlsof finanil aounting Tst l0 Banking stll ashAounts Tst 12 rading doumnt Tst l3 Buying and slling Tst l4 Adjustmnts Tst l5 Making hangs Tst 16 Profit and loss Tst l7 Profit nd loss aount stl8 nd oyr Businss organization st 19 Businsss Tst 20 Fals pratis Tst 2l Shas st 22 Slrasissu st 23 Partnships Tst 24 Giving advi Tst 25 Aquisitions Finnial ounting st 26 anings Tst 27 Taxation Tst 28 Dpiation st 29 Dpiating:phrasal vbs Tst 30 Auditing Tst 3l Th work of th auditor st 32 Prsonalontats Finnial statmnts nd atios st 33 Ratios l st 34 Ratios 2 st 5 h alan sht Tst 36 Valuation ostok Tst 37 Goodwill Tst 38 Aounting poli st 39 Funds

I 2
J

Aounting lnasand dras thnolog Inomation

othr titls in th sris

Tst You Businssnglish lmtr st Yur Businss nglish Mrktig bst Your Businss nglish Htl od o|ring st Your Bsinss nglish lntrmdit Tst Your Businss nglish Srtril Tst You Businss nlish Fine

4 5 6 8 9 l0

Setion 2 sh ounting Puhass and sals Adjustmnts Firral aounts

l3 t4 l5 l6 t'7 t8 l9 2l 22
Z

IZ

Stion 3 BusinssStuturS Shas Partnships Aquisitions Setion 4 arnings and taxation Dpiation Audit Prsonalontat Stion 5 Ratios h balansht Valuations Aounting poli Funds

25 26 2'7 28 30

,!JJ

5 6 ,7 38 9

4l 1
a-

4 44 45 41 49

sIoN
Stion 6 ost anlsis atials Costing mthods arginal osting Stion 7 Planning Budgting Tlphonommuniation Control Stion 8 Prforrnanappraisal Rsults Priing Invstmnt Csting Tst 40 Tst 4l st 42 Tst 43 st 44 s t4 5 Costs ost analysis Stok ontrol Stok osts ost stinmnt g i n l o s t i n g

l: H BASIS

50 5l 52 53 55 56 58 60 6l 62 63 65 66 61 68 70 '72
I

1 aounting Introduing

Compltr th following words.(Sr ampl): l This ompany has supplid goods but has not rivd any mony or thm yt. 2 ompanirs mak this whn thy sll thir goods for mor than it osts thm to mak thm. 3 Companis mak this whn thy sll thir goods for lss than it osts thm to mak thm. 4 Goods whih ar bought by th ompany. 5 Goods whih th ompany has availablto sll. 6 An amount of mony whih is takn out of an aount. goods but not paid Customrs who havr rivd or thm t. 8 A rdution in th prie whih is offrdto ustomrrs. 9 This is th nam of th diffrnbtwnth rdit and dbit sid of an aount. l 0 his is drawn up to hek that th two sidsof th aountsar th samr. l 1 Th ost of transportinggoods is alled this.

Planning and ontrol Tst 46 Coporatplanning Plnning inomation Tst 47 Budgting st 48 Varians st 49 Tst 50 Tlphoning Control Tst 5l Dision making Prforman Tst 52 Brak.vnanalysis st 53 th rsults Prsnting Tst 54 Priing Tst 55 Confusing words st 56 Tst -57 Invstmnt Disions Tst 58

CRDIToR

L*_ _

P_-__-- s s--__K
w___ D____L

Answes Word list

'/5 8

D_--__R S D __C-____ B___---

T_.__t_ B C___*-G, L D S

r2 Th offiial books for kpingaounts.

Stion I.. Th bsi,s

Stion I.. Th bsis

Fats and figurs

word. (S xampl): Writ th numbr o alr of th following nt to th orrt

2 aounting Introduing

omplt th tbllowing words. I This is th nam or buildings, mahinry, mony in th bank and mony owd by ustnrrs.

multipliation rmula division prrntag avrag ratio addition rat subtration

(t 74%

A D L

c)
@ ooos

f=/{zv1
000's

2
1 -l

h loss o valu of th things in numbr ( l ). Mony wlrih is borrowd.

Jan 2.4 Feb 2.5 .9 I\^ar .6 APri\ 3.4 MAY

'&, 11
1 $; =#

4 Th xtra mony a ompany or prson pays for

borrowing mony.

5 h total sunr of mony whih is supplid by th

ownrs o a ompany t st it up.

**- _-

6 Cash or goods whih th ownr taks from

th omparry or his own privat us.

__w___ s
GOO ACQU

il;" 6
tronth\Y

1 Ths ar ought b popl wishing to invst in

th ompany.

8 Th xtra amount whih is paid for a ompany abov

th valu o its assts.

@ 1,623 + 3'004
( 6J)) ,-

-- 4'621

/)

:-

02 6,2 = 1,872.4

9 Th purhas of anthr ompany. l 0 An offiial amination of th aounts. l l A finanial plan for th futur.

B____T B sT

=8,149 9 , 2 6 0_ 1 , 1 1 1

c 5 _-

t 2 A statmnt of th finanial position of th ompany.

301

ili#i'
Bi'::i:lndiret

724 200

-- 3.62

'r:,
(q\

t12.24 / hour

Setion ] '. Th bsi:s

S'tiotl I.. Tlrc basis

Aounting

Phrass

Fill in th missing words in th sntns blow. Clroos rom th following. You should us ah word mor than on.

o th phrass in boldin th sntns ( l 10)blow?hoosth What is th maning on th right.Writ your answrs orrtdfinitionfiom th list (a.-j) in th grid (Sxampl): blow.
l How do ou aunt fr th suddn fall in th stk valr.r? 2 Agnts buy and sll goods on their own aunt. 3 Thy gav th soliitor a dtaild aount of th ustomr's businss dals in th last ar.

aount

aounts

aountant

aounting

aountany

a) poplsay b) rport ) undrno irumstanrs d) onsidr ) xplain 0 big ustomrs 8) orthmslvs lr) baus o i) on rdit j) rprsnt

' .:" ]:: :::.:: ::::

*: ':s havbnntrd orrtlyin th bank

2 H 'sat u n i v rs i ty s tu d y i n g .............

, 'n::]:::::-::: ::-::HH:-n"".
o o o::u:::,::-:]:::.:::]':

notytdidd onthir

4 h draft aounts had to b adjustd on aount of th disovry that a major dbtor had gon bankrupt. 5 Raw matrials ount for 30,, o th marrufturing ost.

of finanial transations in th

5 Most popl in th profssin rad ........ journals in ordr to stay inormd. 6 Sh,sbn working as an .........'. yars now. 7 Th dirtors of th ompany approv th .......... th.......... ....'....... ' .a r . Y.

' magazines and

6 lry a gulzrustoms in this shop and ar now abl to buy on ount. 7 n no aount slrould ths figurs b rlasd both board mting. 8 Whn rnaking disions or th futur th manags hav to tak this yar's poor prrman into aount. 9 By all aunts, thy w,ill bnfit grtl i th dal gos througlr' l0 Th advrtisingompan has won two nw aounts in South Aria.

with this firm t-orsvral

at th nd of

':::::: . . .. . . . ;";.n,;,.ll'ompltdthdrat
sstm. for th onsignmntto Bombay. is rallnot an xatsin. knowldgin ordr to

9 ah branhmaintains its own full .......... l 0 Thy havopndan lt

t 2 A businss managrrndssom undrstand what he radsin th ompany

Stion I: Th bsis

Sctio ],. T|l bsis

hang xprssing

Whih dirtion hangs. phrasswhih ar usdto xprss Hr ar thirty vrbs/vrb graph.Th do thy show?Writ th phrassin th olumn blow th appropriat numbro spasshowsth numbrof phrassorah.

b stabl salat improv rdu shrink

tllin xpand inras rmain onstant slow down

dras doubl fall jump rtain position slump

dpn drop grow maintain sam lvl ris soar

dsnd dwindl hold flrm rovrr rokt suffr

dtriorat diminish

U) uJ
J

Setion 1.. Th bsics

Stion I.. Th busi,s

of hange Prepsitions

Thnology

Fill in th nrissing prpositions in th sntnsblow. hos from th following:

Look at th drawings blow and writ tlr numbrs l l4 nxt to th orrt word or phras.

at

btwn

by

from

to

kyboard iax

srn CD modm pintr papr and pnil tlphn rasr

I I9 8 5 .

mousr window tool bar mnu bar manual

2 3 4 5 6

l0 ll

t2

Stion l: Th bsics

Setion l.. The bsis

Computing

ornplt th rossword.

Aross 3 Th od whih idrntifis ah ll in th tabl. rrport flls should b stord in th sals........ 5 All th sztls 7 hoos on o ths from th mnu to tll th omputr what to do. 8 Gt in1brmation bak rom a stord fil. 13 Bring in information rom othr appliations. 14 Rmov. 15 Put th inlbrmation on th srn so that you an rad it.

Down l Do this rgulal so that you don't los any infbrnration. 2 Canl th last ation. 4 A rgistr of nams, addrsss and othr information. 6 Without th password this will b dnid to you. 9 This lts u lav a doumnt. l0 Put inormation into th doumnt. l l Mov quikly through th doumnt. 12 n ara whr a sgmnt o information an b stord. 14 Clik th mous and roll it to anothr part of th srrn. l6 Stop an opration bfor you lrav ompltd it.

sCTIoN2:FUNDAMNTALSoFFINANCIALACCOUNTING

Setion 2.. Fundmntls f finnil tt,ounting

10

Bankins

||
l-l2 nxt to th ortword

Cash aounts

Look at th drawingsblow and writ th numbrs or phras. bank hqu rossing paing-in slip ountrfoil drawr payer hqu numbr dat of dposit aount numbrr bank statmnt bank ovrdraft balan

Choosfrom th ollowing: blw. in th sntns wordsor phrass Fill in tlrmissirrg

brought dposit

ontra

arrid

lard spimn

hargs stoppd

urrnt transation

disrpanis ptty ash

ffij
o
o o

+.{folN

ro.G
.6o.0 2

o\ o\ o\ o\ o\
iO\

'\\o \ o\
i O\

l Small amounts o mon whih ar paid out for things suh as ptrol, soap and book. bus fars ar usually rordd in th 2 h u s t o m rh a s t o p a y . . . . . . . . . . it provids. 3 ah singl movmnt of mony in th aount is known as a......... 4 At th bginning of ah month th balan from th prvious month is rordd at th top o th aont as .'........ ....orward and at th nd o th forward. month as balan . . . .t o t h b a n k o r t h d a i l s r v i s

il ,ro6t]-lo

\o

iO

to

ffi1 ta-hYElt'F.bt'i :

5 Th bank Statmrnt should b hkd against th ash book to mak sur th figurs ar th Sam and that tlrr ar no 6 If th drawr inorms th bank immdiatly that a hqu has bn stoln or lost' th hqu will b by th bank and no paymnt will b mad.

.,..'.=.

l Fv .r.r/*

^l

r-p+4
#*
,-----

Iit,tol
oBol
,tl^n
g,i.,$( .Rr* aANK ft

7 If doubl nty has takn pla within th ash book th itm dos not nd to b as doubl ntr and th itm is known as a :::-::::::::T:'ook 8 Whn a hqu is rivd and paid into an aount it Will b dbitd to th aount on it has bn 9 To mak sur that hqus hav bn signd by th aunt holdr th bank hks th signatur against a .......'..... . signaturwhih thy hold. l0 Holdrs o a aount ar issud witlr hqus but riv littl, i any, intrst, whil ustomrs with a aount will riv a highr rat of interst.

oSl5l5

rq-. B,$lK

; A.E jl_9PPl

iu l outing S 't io 2 : FudttIs o| .fin,

|2

Tradingdoument

13
it-tvot quarrtity

Buyins andselling

S : tio n 2.. Fundmn t ls o/, utlt ill g finn i l ,o

Fill in th missing wds irr tlr doumnt blow. hoos rotrrth ollowing: dispath dat valu addd tax

Choos th corrt word in ah o th followins:

trad disount tax point

unit pri amount

trms dsription

h book whihontainsa list oall omparry salsarrangd by datis known as th a) salsaount b) salsard ) salsinvoi d) salsdav book A ............ a) ashdisount .. is not rord d in d oub lntrv . b) rfund
) tad disount d) ash sal

Ltd loe SmoII Min lndustriL stte Antown

Ltd N Tes Stret 24High Newtown .. (1)....... Customr no. item P245 47g 1 AX31 No'0066798 (3) (5) . .. -3 paks 10reams 5 boxes (4). .' fileards A4papr penils

3 F-aulty goods whilrar sntbak to th supplirby th

lnvoie

ustomrar known as
d) disounts n o t o W t o o

;; ;.;;;;
4 ^ ........' muh mony. a) quality ontrol

b) provisions

) rovrs

. . . . .s y s t ms h u l d m a k s u r t h a t d b t o sd o b) rdit ontrol ) rdit not

19.. 19.. 12Januar

d) rdit transr

0 . Tee4331 o.ltnrflo Aount No. A0u

ry

3s9
1.20

9:g

A ompany slls goods on rdit, but iustonrrs nv pay fbr ths goods th m o n o w i r r gi s k n o w n a s . . . . . . . . . . . . a) bad dbts b; dbits ) bad paymrrt

d) bankrupts

h stimatd pns f nt bingpaid by dbtorsis a|an........

a) allowan b) dvaluation ) proviso

known as
d) rovision

,89
6.00

7 t you alulatdiffrrrt prntags ordbtswhih

diffrnt lngths o tim,you an prparalan...'..'. odbtors. b) aging ) rduing

havbnowing for ...... shdul d) inrasing

goods otal (8). ..

44.50 8.90 35.60 3.56 39.16

a) progrssiv

8 In manyountris a ta is adddto thpriogoodsnlsrvies, but som goodsma b and no tax is <lu.

a) xmpt b) ptional ) xusd d) unovrd At th nd of an aounting priod, dtails of tax olltd and tax paid ar givn to th authoritis on an offiial orm alld a ................

a) statmnt

b) dlaration

) rturn

d) onfirmatin

(10)

net :30daYs

Stion 2.' Fundnlntls oJ.finncil t'unting

14

Adiustments

15

Vlaking hanges

Stio 2.. Fund mn ls of Jin i l rl, , oun t tltg

Math th following xampls with th orrt word or phras from th box' Writ th orrt numb in th spas in th bo.

Hr is a lttrroma firm oaountants to lint.ompltth lttr by insrting th missingphrass. Choos romth b blow. a) adjustmrrts b) thauditdaounts ) ndd0 pri1|997 d) do not hsitt,to ontat ) with th final aounts 0 aumulatd 8) hang h) th bank ovrdrt. i) hqu for f2,500 ;\ provision *-^--:-. .1) for bad

rror o omission omprnsating journal rror rroroomnrission rrorof originalntry..... an ovrast aount rrorof prinipl ..... rvrsal ontris an undrast aount.....

l Tony anks has addd up th figursto produa flgurwhih is lssthan it shouldb' 2 The salsaountand th purhasrsaountwrboth addd up wrongly by th samamount. 3 ari Stwrtorgotto rordth transation in th aounts. 4 Frank Mann ordd th purhasof th lorr in th puhass aountbut it WaSa fid asst. 5 Su Blak has orrtdth rror and rodd it in this book. 6 Anna Franks mad a nristak in th invoibut ntrdth Samfiguin both th salsand th ustomr's aount' 7 Lsly Brunovskyntrl th orrtamount in th orrtaountsbut as a d bi t . a dbit whrit should havbna rdit,and a rditwhit should havbn
Dear r Lee We have p1easure the period We are also (1) sending you a list (2) .... of a (3) into so the Nominal Ledger .'." bank pa1rments. understates to whih have drawn of the adjustments so that the opening whih you need at Norr-inal Ledger balanes in nlosing five opies of the full aounts for

to make to your

1 ay 1997 agree with ' Please

put in the details are missing

^/

in

Deerrber 1995 for

Customs and xise

\9

cQ

These details (4) . Inrease purhases.

bank pa1ments by 185.20 This will over various

and ode it smll

diret

differenes

(5) . ake new Norninal (6) . (7) and equipment We feel (S) (9) If disuss Yours it is in

ldger

.. - -. over the Years' for code headings ..... ..... debts. the present ode headings for plant

8 Garry Blus has addd up th figurswronglyto podua total whih is gratr than it shouldb. 9 Tho Koh ntrdth orrtamount brrtin th wrng ustomr's aount.

at ost

to 0011. the also ost and depreiation easier easier of the

better

to separate Ledger It .....

fixed assets

the Nominal

to mke it

to o)are to find any like to

makes it hanges

whih have been made. these or would (10) .... .. us.

you have any problems them further, sincerely

with

please

Lydia Triffs

d/rr|/l, vltL

tlunt ing S 't i on 2 ..Fundmen tul s oJ,finn i I ,

16

Profitandloss

|7

Profit andlossaount

S , t iott 2 .. Fundnle t l s of rin il lout in,

Fill in th missirrg words in th sntns blw. hoos rom th following:

Math th itms (l*l0) to th ntris (a-j) rom a Traling and Profit and Loss Aount.

xpnss adrninistrativ traordinary

ost of sals ordirrary

distribution tind

dividnd turnovr

Trading and Pofit and Loss Aount

f000's urnover Cost ofsales profit Gross Distribution osts d Administrative expnss Other operating inome lnom from shares inrelated ompanies lnome from other fied asset invstments Other interest reeivble lnterest pyabIe Profit onordinary ativities before taxtion ax onprofit onordinry tivities Profit onordinary tivities fter txtion traordinary inome ax onextraordinary profit Profit forthefinaial year Retained profits from year last ransfer to geeral reserve Proposed ordinay dividend profits Retaind arried year to next 60 _30 190 90 1B 15 20 10 900 550 350 105 245 55 00

l As A. Z. DsignsLtd is a small printingompany'all thir printingontratsar .. a ti v i ti s . kn ow nas . . . . . . ...... 2 Rntly, a fllm ompanypaid A. Z. Dsignsa lagamount of mony to us th ompan'sprmisrswhn thy wrmaking a film. his was rorddin th inom. P&L Aount as , l:::-:-:::::::.::-"', 4 ^t th nd oth ya Smof th profitsmay b shadout among th wh will riv a ........... sharholdrs ar shownas .........'.. 5 Th ostsof gtting th goodsto th ustomrs ostsin th P&L Aount. 6 atrials whih ar usd up in manufaturingand workrs,wagsar rordd a s. . . . . . . . . . . . ' '.l: :::::::::.: 8 Th ompany may dideto kep somr of th profits at th nd of th yar and .. profits. th amountis shownas ...'..,....' inurrd in th offi ar shown as -].::" u"o pnss is known as maksin its normal ativitis

45 345 18 27 '109 218

0
12 24A 40 280

Sction 2.. Fundmntls of Jinnil countig

18
l h valu o stok at th nd of th ar has bnddutd. 2 Bank intrston th ovrdraft. in sharswith voting rightsin othr ompanis. 3 Dividnds from invstmnts 4 Nt invoidamountsfor sals. profitswhih will not b paid out to invstors. 5 This yar'S 6 Th dlivrydrivr'swags. for rnt on buildingswhih havbnlt for a short tim as thy 7 ony rivd arr not bingusd. 8 This monry will probablyb paid out to sharholdrs. and lgal fs. stationry 9 Tlphon, for orporationta frm last yar. l0 An ovrprovision
orrt on.

ndofyar

. S t io n 2 ..Fu dm n t l s o.fJi n i l , , oun ting

Look at th words in itli,in ah o th ollowins sntnsand hoos th

On th first day o th nw flnanial ya th ompany ounts and rords all th matrials, parts' mahins, statiorrryt. in th annua| 'rtl,kpil lstok-tk. Nw rgulations man that th aoLlntants must publii: lpublish th rading and Profit and Loss Aount in on of ourJbrmts l f.ormtions'

3 If th information in th Trading and Profit and Loss Aount is only for

insidr l intrnlus, th ompan an did to prsnt th information as it wishs. 4 Th law stats how muh inrmation must e dislo'dlnlosd in th Tradins and rofit and Loss Aount. 5 This ompany turnovr is lsndd l dril,d from th sal o manuaturd goods. 6 h nots whih arc ppnll ldhrd to th Trading and Profit and Lss Aount plain how th figurs hav bn ompild' 7 Th ompan wishs to approinlt l pprtin otor xpnss qually btwn Distribution Costs and Administrativ xpnss. 8 Th auditors' rmurutionlompenstiot"t or thir srvis should b shown in th nots. 9 h aountants hav to :rdit lru orporation Ta on ordinar ativity profit whn thy ar prparing th rading and Profit and Loss Aount. l0 Th final tax figur will probabt b diffrnt to th book figur So an amount has bn transrrdto th dct I d/rrdtaxation aount. l l [t is nssary to stat th lolumntslmo||intsof th hairman irr th nots.

sTION 3: BUSINss oRGANIZATION

S t ion 3.. Bu,itts,; orgnizttion

19

Businesses

20
a) subsidiary b) goup ) non-profit-making d) stok xhang ) partnrship ) dirtors g) privat limitd h) dbnturs i) publi limitd j) holding ompany k) annual gnralmting

Fals praties

(1-11) with th words or phrass(a-k) on th right. Math th following sntns Writ your answrsin th grid blow.(Sxampl): 1 h holdr of thshas lnt th ompany mony but has no voting rights. 2 A goup of six aountantshavdiddto form an assoiationto arr on businssin ommon and mak a profit. 3 h invstorsgiv thsr popl th powr to run th ompany. oflth voting 4 his ompany holds mor than 5o/o sharsin anothr ompany. 5 mbrs of the publi an only invstin this ompany if thy ar invitd to do so. in many ompanisan b mad by 6 Invstmnts buying sharson this markt. 7 The publi at larg an br sharholdrsin this ompany' 8 Th golf lub was stup with th intntionof not making a profit. 9 Fifty-on pr nt of th voting sharso this ompany ar hld by anothr ompany. l0 This is th mtingwhih is hld on a yar for th sharholdrs. 11 This rxists whn svralompanisar in a rlationshipof owning and bing ownd'

A Complt th following tabl.

Noun

draud dit/dption pilring

Wast mlspproprlatlon

brak
forg falsifiation

rr mbzzlmnt

B Fill in th missing words in th sntns blow.hoos from th tabl above.

Whn valuing the stok, thrar many rasonswhy th managrmakes an allowan of 0.5"h ' of items. fionatural.............. W had to mak sur that employs ould not . . from th offi' 8 9 l0 1l small itms

I J

Th bookkprtrid to f200,000 but th auditor 6y(' bamsuspiiouswhn h found hangs[6 5rne invois.

Setio 3.. Businss orgniztio Sction 3: Busiess orgnltn to ............ In rdr to avoid paying tax h didd undrstating profits. .. th doumnts by

2l

Shares

Fill in th missing words in th sntnsblow. Choos from th following:

5Svralpropllostlargsumsofmonydutotlr..............of pnsionfunds. 6 A srious.............. wrpublishd. bforthy was oundin th draft aounts

appropriation ordinary issud bonus prfrn dnomination prliminary intrim rdmabl nominal unalld

th hquwas a 7 Thv disovrdthat th signaturon

l his ompan has issud shars in f5 ....... 2 At th nd of th flnanial ya profits ar flrst o all alloatd to pay th fld prntag d i v i d n d so n . . . . . . . . . . . 3 Th prntag dividnd. 4 Th ompany hav didd to issu thir xisting shar holdrs. 5 Th ompan is allowd to issu a total amount o shars known as th shars fr o harg to . . .s h a r s .

sharholdrs hav voting rights but do not hav a fid

th Howvr, :::'::":. :':- :::j,i.]i;;; ;;,.;;.;;; ;;j:,'.al.

6 Thr wr larg

xpnsSin starting th ompany.

7 Thy hav only askd for som of th amount payabl on th shars, so thr is still a lot of apital. . during

8 20|12009 writtn bhind a dbnturr mans that it is ............. that tim. 9 h final aounts should inlud an ........... how th ompany will us th proflts. 10 Atr trading for si months, th ompany paid out an dividnd.

... aount whih shows

St io 3.,Busillss orgniztion

Stion 3.. Busitl,s rgiztion

1,, 22

Sharsissue

23

Partnrships

A ompan has issud l0,000 shars and th ollowing trat has bn takn rom th bank ount.

hos th orrt word r phras in th following statmnts about partnrships.

l Ia partnr is liabl only to th amount of apital h invstdh is a

Bank

App|iationand Allotment monies App|iation Allotmentmonies First all Seond all H. Jay Appliation and AlIotmentrefund

. . . . . .p . artnr.

50

a) liability

b) limitd

) orporat

d) dad

1550 1500 600 2700 0075

2 he partnrs want an oftial agrmnt about thir sha in th prtnrship' so tlry ar goirrg to daw up alan .......o partnrship. a) dd b) transation ) titl d) instrumnt

3 If thr isn't an offiial writtn agrmnt, but a partnr signs a balan sht whih shows that profits hav not bn shard qually, agrmnt would b a) implid b) statd ) drawn d) blivd

Us th inormation in this rxtrat to fill in th missing words in th txt blow. hoos from th ollowinc: i I allotmnt issud appliation nominal appliations ovrsubsribd all ss first foritd sond

4 Partnrs an hoos to produ fid apital aounts or ............ apital aounts. a) hangabl b) moving ) variabl

d) flutuating

rfurrd

rissud

5 A partnr who dos not tak an ativ part in th businss is alld a partnr.

a) silnt

b) dad

) slping

d) inativ

6 Whn partnrsan't or don't want to ontinuin partnrship thris a o f l ah. shar s (1).............. l 0 ,0 0 0s i x p r ntpr fr n Th ompan (2) on who wantdto bu th sharshad to pa |0.' Invstors ...and 30%on th 4,tl on allotmnt, on th first(3) . ..... 20oll (4) ........... ...all. Th salwas vr popularand th issuwas shars. or 15.500 wrrivd (5) .. ... . (6) A (7) An (8) of th mony or 500 sharswas mad. was mad on th basisof two sharsfor vrythr monis ...appliation applidofor th rmainingl5,000.h (9)... . fo ' skd m o nis ( l 0 ) .' ............ w r s toff agai n s t h . and sr o ndalls ..... d i d n ' tp a y t h ( 1 l ) ..' . '...' T h h ol d rof l , 0 0 0s h a r s ....... of th partnrship. a) divor b) domposition ) amalgamation d) dissolution 7 Whn thishappns a ......... Aount is opndto rordth transations. ) Sals b) Rlization ) Distribution d) Liabilit 8 Whn th partnrship omsto an nd,th dbtsor liabilitis a ........ a) dishargd b) disposd ) distributd d) dissolvd 9 on partnwho owsth partnrship mony,will havto anelhis ....'.. to th partnrship firm. a) dal b) laim ) indbtdnss d) artils

f,

ij *

Stio 3.. Businss orgniztion

Stion 3: Businss orgniztin

24

Givingadvi

Turning to profit sharing'I think it would b bstfor ah o th partnrsto riv intrst on thir apitl invstmnt and thndidhow to sharth rmainingprofits.

a lttrto a firm of aountants phrassar from two diffrntlttrs: Th ollowing askingfor adviand th rply.Thy ar all mixd up. Put thm in th orrtordr to produtwo orrtlttrs.

W look forwardto haringfrom ou. Yours sinrly

)n.n |'|nr
Thank you lbr our lttrof 26 Januaryrgardingth sttingup of a I am now writing to givyou my first thoughtswhih you may partnrship. want to disussurthr.

First oall, I suggst that as r Ford is not going to b involvd in th daily managmnt oth partnrship h b mad a limitd partnr. This mans that his liability is linritd to th amount oapital invstd by him. H an riv a fid amount o intrst on his invstmnt or an amount basd on th profits. I lthat r Grant' as th managing partn and r Blst who will b ativly involvd, should riv salaris for thir work.

Dar Ms Simon

So arw hvagrdthat r Ford will givf20,000as apital but will not Mr Grant will managth businss tak part in th running of th businss. but ontributonly f3,000.Mr Blst will providf8,000 as apital and ssistin i and whn rquird. th businss

W now ndfinanialadviabout th struturo th partnrship and would b gratul you if would assistus. W havplanndour nxt mtingfor 21 Fbruary,and would lik to disussyour idasthn.

I trust that you will flnd thspoints usful.If you wish to disussanything plaslt m know. urthr

I2
Dar r Blst Finally, th law dos not rquiryou to draw up a lgal dd of partnrship but I think you should hava writtnagrmnt.

ffi

: -
J;;

tj

rqust for advi

rply

--]

Sc tiotl 3.. Businss orgniztion

Sc tiotl 3.. Busiess orgiztiott

25

Aquisitins
) onsolidatd aounts ) firrnial honymoon g) minority intrst h) agring th book valu of assts

Look at th ollowing drawings, thn fill in th aptions. hoos rom th ollowing: a) joint vntur b) a tak-ovr bid ) showing intrstin anothr ompany d) launhing a bid

BUlLDRs LD

wR
LD

F"/

:t :4.
-v'/

to,000

sCTION 4: FINANCIAL

ACoUNTING

26

arnings

Us th words in bold at th nd of ah of th following sntns to orm a word whih fits in the blank spac.

I I

27

Taation

Stion 4., Finnil ounting

h ollowing phrassar from thrdiffrntlttrswrittnby an aountant onrningtax mattrs. Thy ar all mixd up. Put thm in th orrtordr to produthrorrtlttrs.

and paid ...'.... whih ar alulatd I Wagsar anings 2 Th payroll ontainsdtailsof all th ..'......' for th ompany. makesa .........'... 3 Th employr gross salary. who work

rvek Yours sinrly mploy

r'/L,T,Wh Tippt Partnrship 1

for tax from the workrs' ddut

how muh ta to pay' prsonal...'...... 4 Whn alulating is st againstth amount somonr arns. 5 In th UK, poplwho havworkdand paid into National Insuran an laim bnfitsfrom th Statr. Thes inlud bnfit and a pnsionfor ..........

rliv W noti romour filsthat your 1997Inomax rturnhas not bn ompltdyt.

mply rtir

' *

": T:i*i:J:1*mav :::::o:

pav m'n'1hrv
ontibut ddut Yours aithully

7 Paymntsto a pnsionshemmay b tax .......... 8 Pnsion shmsopratdby a ompany may b non-

ontribut 9 Th law in som ountris saysthat an mploywho is ill *::::::"}}T;:nt of pay whih is known as statute

t'/L,T.Ifu, '
h ippt Partnship n. I

.,

::::::::-::::jffi::,"ys

hav aholiday
ntitle W would rrommndthat you mak paymntsOn aountof f2'345on l January l998 and 2,46on 1 July to avoid intrst hargs.

l1 Thy rivan inrasah ya as thy ar paid an . . . . . . . . . . . s a l a ry . l2 Th govrnmntststh tax band btwnon tax thrsholdand th nt.

inrmnt

wid


ion 4.' Finnt,il .oullting S,| Stion 4.,Finnil ountig

Dar r Pndrgast

28

Dpreiation

Cirl th odd on out in ah oth ollwins:

W also nlos th Corporatin Ta Rturn and trust that you will b abl to agr our figurs in du oursr.

Fixd assts ould inlud a) buildings ) th firm'sdlivryvans

b) plant and mahinry d) ul or tlr vans

2 Dpriationd to physialdtrioration o an asstmay inlud a) waand la b) thft ) rosion Dar Ms Post As this is a opy of our |991l98tax assssmnt. W havrntlrivd inorrtw havlodgda Noti oAppal. 3 ahinry boms obsoltdu to ) nw thnology ) hangsin produtionmthods
d) rot

b) onsumption d) hangs in fashion

4 Amortization is th provisionfo onsumptionof th ollowing itms a) mortgags b) lass ) patnts d) opyright

on bhal of Collins ntrpriss Ltd w nlos a opy o th flnanial aounts for th yar ndd 30 Novmer |991 togthr with a opy of our Crporation Tax omputation.

5 A provisionordpltionwuld b usdorth ollowing itms a) mins b) buildings ) quarris d) oil wlls 6 Th ollowing ar mthodsof dpriation a) straight-lin ) th sum of th yars.digits b) rduingbalan d) marktvalu

if ou ould lt us havth W would lik to ompltit and would b gratul for th yar ndd dtailsof dividndsrivd romyour UK sharholdings 5 April 1991. Yours sinrly

7 A mahinould b disposdof by bing a) srappd b) rsold ) rvalud d) tradd in Th aountswhih would rordthr salor disposalo a mahinar a) mahinryaount ) mahinrydisposals aount b) salsaount d) provision fo dpriation (mahinry) aount

,'1-ry,tTh Tippt Partnrship I

lttr l

lttr 2

ltter3

Stion 4.. Finil counting

Stio 4..Finrlnil outig

29

Depreiating: phrasal vrbs

30

Auditing

Rpla th words in brakts in ah of th following sntnswith a phrasal vrb of similar maning. hoos rom th following and mak any nssary hangs. (S xampl):

ath th ollowing trms(l-l4) with th orrtdfinition(a-n) on th risht and writ your answrs in th grid blow. I statutoryaudit a) offiialdoumntstatingth intrnalruls of th ompany b) followingon atth othr without a brak ) this hks that ontrols ar opratingfftivly d) rquirdby law ) mony rivd romon dbtoris wrongly rorddto anothr )rgulats th ompany'srlationship with th publi g) tstinga small numbro rprsntativ itms h) arridout all th tim i) ollowing doumnts or transations through th systm j) piof wok you ar givnto do k) arfulstudy o all th dtails l) aountantwho xamins a firm's aounts m) prviouslngthotim n) mak surit's tru with mor information

arry on look up

ath on sll off

lar up st asid

los off st out

draw up turn out

go ovr writ off

2 ontinuous audit 3 Mmorandum f Assoiation 4 Artils o Assoiation 5 walk throughtst 6 ompliantst 7 substantiv tst 8 tmingand lading 9 auditor 10 prior priod l l audit assignmnt l2 orroborat l3 statistial sampling l4 onsutiv numbrs

l As th mahin had no srap valu, thy simply (rordd as worthlss)

. v!tnI!/. it

aff

th fid assts should b (displayd) 2 The mthodsusdfor dpriating . . . '. ' i.n t h n o t sa t th n d . t (ontinu) 3 Dspitmassivlosssthis ya th firm intrrds ...... t.r a d i n g . o) 4 Thy oundth tru valu o th land whn th firm had to (dispos .....i .t . 5 W think it is bstto (kpavailabl) invstmnt in nwquipmnt. (provd) 6 Th stimatd lif of th assts ....... mony ahyar or ttur

.'.....to b vry aurat.

7 If you annt rmmbr th ormulafor th rduingbalanmthodof (findin a book) dpriation, it ....... 8 It a good ida to (onsidr) ....... th diffrntwaysof dpriating asstsbfordidingol1on partiularmthod. you an (finish) 9 Aftr disposalof th asst .....' ...... th aount.

l 0 h surplusor dfiiny th is transrrd whnyou (prpar) ..'.................... Profit and Loss Aount. is bginningto (bom l 1 Th sum of th yars'digits mthodof dpriation popular) in uropnow. ....... 12 ^ hang in th mthoddpriation should(solv) problmo alloatingosts. th .......

-)
a

'7

l0

ll

t2

l3

t4

Stion 4..FinniI :ountig

31

ThWork of theauditor

32

Personal ontats

S 't ion 4.,Finn'il r:outinp

Fill in th missingprpositional plrrass in th ollowing sntns. hoos from th fbllowins:

Look at th follwing drawings, thn fill in th missing wods. Choos rom th ollowins:

agr with insist on

a) Would you lik a op o th rport./

blam or rason for ausd by rr to diffrn btwn rsponsibl fbr in lin with suspiious o

ould I ask you to sign hr? Brnik. Ni to sy ou ag ain.

b) ay I introdumy ollagu, r Fry?

s) Good morning.r

)
l h auditr disovrd that thrwas a th bank balan. 2 I th ntrisin th aountsar not lar,h an th originalinvois.
1 J

Wll, I rall nd a bit nror tim!

h) Is nt Friday suitabl? i) PIs taka sat.

th ash book and

d ) Don't mntion it! Plasd to hav bn abl to hlp. ) Not ompltly, ['m araid.

i) Don't Worry.I'll fill thm in latr.

You must

an ofiial signatur on all larg ordrs. .....th ompany

4 Th auditor must hk that th rords ar ....'....

rquirmnts.

5 Th auditor must sk th 6 Th audito is ..........

th aounts. Th authoritis will mistaks in th aounts.

any larg disunts or llowans. ...' lrking thr rasn for any hangs in

"u9

t h a u d i t o r . . . . ' . . . . . . . . . . . . . . . . . .a .. .... n.

8 Th auditor must hk that th purhasinvois in th Purhass Jounal. 9 h au di t orsho u l db .' .......... ortingrrors. l0 i st akr smay b ......' ..... aountingpross.

th ntris

.' a n y s h o r t-ut mth ds of .. th wro n gstps usdin tho r iginal

Setion 4..Finil ounting

SCTION 5: FINANCIAL

I 33 Ratios
Complt th following words.

sTATNTs

AND RAIos

1 Th profit pressd as a fration or perntag of th ost prie. 2 Th prfit prssd as a fat. lon or prntag of th sllingpri.

__*- U
I\4A C_TON

|l|a prot| f ?

|hv lt old

3 A prntagof profits whih thy pay

th manag'

attt fontll?

Gn qt prprth)

4 Ratios hIp us to ana|ze and . aountinginformation. 5 Shows that a firm has nough mony to surviv in th short.trm. 6 How quikly stok is turnd ovr. 7 The rang of differnttyps of goods whih a firm sel]s.

IN

LI-_*D*__

SToK

whih ar rturnd. 9 Shows if th firm an mt its dbtsin th long trm. l0 Th amount of borowing by a firm.

8 Th salsfigurminus any goods

sA____*
T-_N--_ S__v___Y
G*_R-_ Y__ l_ F-__ VA

l|nr,tt 'Y.r bfin

l l Th rat of turnon an invstmntin shars. l2 xpnsswhih do not hangvnwhn ativitis ar inrasingor drasing. ativitishang. 14 You an sethis whn information from sevralyrars is ompard. l3 xpnsswhih hang whn th flrm

T__ N

Section 5..Finnil sttmnts nd rtios

Setion 5'. Finncil sttmnts d rtios

34

Ratios2
a) apitalStr utur b) liquidity ) invstmnt d) profltability ) us of assts

35

sht Thbalan
Calld up shar apital Dvlpmnt osts Nt urrnt assts Tansibl assts

A ath th typ o ratio (a-) with th orrtdsriptiono its funtion ( l 5).

1 shows how wll th businSs an mt its ommitmnts as thy all du 2 shows how sussullyth businss is trading 3 shows how wll th businss is using its assts 4 provids information about how th apital strutur o th firm is affting th ost o apital and th rturn to sharholdrs 5 shows how th ompany's prforman is rfltd in th markt pri of a shar

Fill in th missing ntris in th Balan Sht blow. Chos from th ollowing: Amounts owd by rlatd mpanis rditors: amounts falling du atr on yrar Fixturs and fittings Profit and lss aount Gnral rsrv Stok

B Whih typ of ratio ar th ollowing? hoos rom a- abov.

. urrrnt ratlo . pri arningsrati . fixd assts/nt worth . asst/sals . aid tstratio . gross profit/sals . dividnd ovr or ordinar shars . borrowing/ntworth . olltionpriod for dbtors . nt profit atrtax/sals

Fixed Assets lntangible ssets ( 1 ). . . . . . . . . . . . . Goodwill ( 2 ). . . . . . . . . . . . . Land and buildings ( 3 ). . . . . . . . . . . . . lnvestments ompanies Shares in re|ated Loans to re|ated ompanies Current Assets ( 4 ). . . . . . . . . . . . . Raw materials Finishedgoods Debtors Trade debtors ( 5 ). . . . . . . . . . . . . Cal|edup share apita|not paid Prepayments Creditors: amounts falling due within one year Debentures Bank overdrafts BiIIsof ehange payable ( 6 ). . . . . . . . . . . . . otal assets less urrent liabiIities ( 7 ). . . . . . . . . . . . . Debentures Bank loans Capita!nd reserves ( 8 ). . . . . . . . . . . . . Other reserves: reserve Capital redemption

180 40 600 20

000's

220 620

4,'100 59 4.159 4,999 600 800

1,400

1,200 400 500 400 2,500 600 50 50

700 3,200 8,1 99 200 7.999 6,000

100 100

(e) .............
( 1 0 ). . . . . . . .

300 599

899 1,'100 7,999

Stion 5..Finncil Sttmntsnd rtios

Sction 5.. Finncil sttmnts nd rtis

36

f stok Valuation

37

Goodwill

Complt th ollowing words.

A Look at th following drawings whih dpit diffrnt motivs for paying or goodwill, thn fill in th aptions. (on is not a motiv!) Choos from th following:

l Th first gods whih om in ar th first to lav th firm. (abbrviation) 2 Goods laving th flrm ar th last whih wr rivd. (abbrviation) 3 h valu of all th goods in stok is alulatd as an avrag. 4 Th dirt osts of prodution (matrials, labour and xpnss)giv this figur. 5 I a stok itm wr sold, this is th mony whih would b rivd aftr taking awa th osts of disposal. 6 Th ost of gtting an itm to tak th pla o a stok itm. 7 Th valu of itms whih a ompany is produing at th momnt' 8 Itms whih ar usd up whn produing goods for sal. 9 Th main valuation mthod usd in alulating th input valu. 10 A rtailr an rturn unsold goods to th manufaturr whn thy ar supplid on ths trms. 1 1 Th quantity of goods whih ar availabl for sal.

a) Costs in rsarh and dvlopmnt b) Th businss njoys a monopoly

) A

wll-known nam

Ngativ goodwill

L ___

) rad marks and patnts

s) Loation of th prmiss

A__
P_-_-

c___
COST

d) Skilld labour for

NT R-_L_-_-_ vALU Cos

R__L_-_M-N_

ffil&'y" [ffi=

W_---IN-P M

_SS R__L-

H-S__R_-

COST

S'tio5'. Finnil sfurmntsd rtios

Stion 5: Finncil sttemnts nd rtios

38

poliy Aounting

h fbllowing trats ar takn rom Nots to th Aounts. Giv a mor lormal wod or phras for th words givn in brakts. hoos from th words in th bo at t h s t a (o a h s t i o n .

adjustmnts

appliabl

omplian

onvntion

stating

\|.'sE
B Goodwill may b tratd in diffrnt was in th aounts. Fill in th missing wrds in th sntnsblow. Chos rom th followins:

Basis of preparation of aounts Th aounts hav bn prpard undr th histori ost (nomal prati) (l) ... . ... , oS modifid by th rvaluation of rtain fixd assts'in ...... w i t h t h p r o v i s i o n so f t h C o m p a n i s A t l 9 8 5 to UK Aounting Standards. ( a g r m n t( )2 ) . . . . . . . . and (fitting) (3)

Th group aounts ar th rsult o th onsolidation o th aounts o th ompany and its subsidiaris,with appropriat (hangs)(4) .......

Rationalization and losure osts ontinud rationa|ization osts ar hargd bor (plaining) (5) th trading profit. Closur osts of major sits ar tratd as an traordinary itm.

aquird ratd

amortizd liminatd

balan sht rsrvs

brought usful

arising Depreiation

stimatd

xrss

is inurrd

pr annum

In th mpany,s books: urhasdgoodwill should normally b (l) asstfrom th books whn it is (2)

immdiatly as an

goodwillto b for purhasd In somompanis, it may b appropiat li . (3 ) . . . . . . . . ...o no mi ...y a rb y y a ro v ri ts ( 4 )... . . ... ...within th ompanyand not Goodwill whih has bn(5) .. ....... into th books at all. bought' should nrvrr b (6) in i s n g a ti v g o o d wi l li,t s h o u l db a d d dto th(1).........',..............'.... Wh n t h r of th firm. th (8)

Dpriationon hold buildingsand lasholds with mor than 50 yarsunxpird is poviddon a straight-lin (eachyar)(6) ... ... basisat ,% No dpriation is providdon rhold land. Computrsand othr quipmntar dpriatd on a straight-lin basisovr thir (gussd) (7) ... ... ... livso btwn four and tn ars.

Stion 5: Finnil stltmntsnd rtiqs Goodwill Goodwill (xisting)(s) ....... (9) ........... ... on aquisitions,bing th (xtra)

Sction 5..Finncil Sttemtsnd rtios

... of ost ovr th fair valu of th nrt asstsaquird, is hargd

39

Funds
.. of funds. d) inom

against rsrvSin th yar of aquisition.

hoos th orrt answr in ah of th following: l Funds oming into a firm ar known as ............

a) springs xpnditur Rsarhand dvlpmnt is hargdagainstprofltsin th yar in whih it (happns) xpnditur All rvnu 00).........
a) working

b) sours

) origination

a) appliation

b) dlgation

) disposal

d) onsumption

b) urrnt

) profit

d) ash

4 Whn ou tak awayurrnt liabilitis romurrnt asstsyou havth amount . . u n d s . o............ d) flow b) workingpital ) asst a) liability
5 Finanial statmnts about ash unds ar usually known as

Frign urrnis rats in strlingat xhang ar xprrssd urrnis Asstsand liabilitisin orign dat. at th balansht ..... (l l) ...... (givn)
a) ash flow

.....statmnts. b) ash rsour ) ash outflow d) ash loss

a) sal of fixd asst b) drawings

) dpriation

d) loan rpaymnt

Pensions rlatd bnfits to providfor rtirmnt ontributionsar mad to pnsionshms final salarisin rspto(today's) (12) to (forast) and ar in pnsions, inrass (13)......... ..... staff,and for post rtirmnt hargdto th profit and loss aountas inurrd.

is............. flowound s 7 A n itmwhihinv olv s ) salof fixd b) book loss n a) provisionor saloffixd asst asst bad dbts

d) bolk profit on salofixdasst

8 Aftr making adjustmntsor itms whih don't involv th flow of funds th nt pr o fito r lossis k nownas ............ b) outflow o funds ) ash movmnts d) total gnratd a) grossprofit
rom oprations

9 If a ompany rdusthir stok and th numbr o dbtors,thy will '... . ash. d) librat ) disharg a) dlivr b) rlas
Dfrrd taation Dfrrd taxation ariss (for) (l4) itms whr thr is a timing

diffrn btwn thir tratmnt for aounting purposs and thir tratmnt or taation purposs. Provisions ar mad at th appropriat rats for dfrrd taation to th xtnt that it is (thought) ( 15) in th forsabl utur.

th liability or asst will aris

sTIoN

6: COSTING

40

costs

S,tion.. osling

4l

Costanalysis

Fill in th missing words in th trms blow.Choos from th following:

ak on word ronr th lt-hand olumn and on rom th right to omplt ah of th following sntns.(S xampl):

apportionmnt intgratd

ntr indirt

onvrsion intrloking

dirt lbour

fixd marginal finnil prim funtional ailitis analysis disins pross lt prfit matrials ost

Trm

Dfinitin Costs whih arr dirtly rlatdto making a produt (.g. labour and pnss). matrials'

onsumabl maximum businss arbitrar manufaturing

2
a J

Costs of hangingmatrialsinto produts. Costs whih ar not ditl rlatdto making a produt .g.rnt, administration. This ould b a loation, a funtion, a pi of whryou an quipmntor a group of mploys purposs. for ontrol idntify and alloatosts You divid th ommon ovrheadosts btwnth various ativitiswhih us thm aording to how muh thy us. Costs whih alwaysstay th samevenif th numbr o itms produed hangs.

l Aountanyprvidsh,.,4..d*Tfu.whih businss disions.

is usd to mak utur

ty to mak 2 In ordr to sud, ompanymanagrs growth baus this is whrapital omsrom. rathrthan .truosts',thy oftn hvto 3 Bausaountants rly on stimats mak pross but ar not part 4 '.'.....'... ...... ar usdup in th manufaturing of th final produt. 5 All th dirtostsof manufaturins to as........ ar rfrrd 6 ovhadis th ost of providing produ goods. 7 Th managmnt aountantshould undrstand th to mak a produt in th atory. 8 Cost aountinguss transationomrs from. .. whih looks at whrah .. whih you ndto

7 I

The ost of paying workrs to mak th produt. Th ost of making a singlxtra unit abovthe numbr alrady planned. You don't sparatflnanial and ost aounting.

l0

Sparatost and finanial aountswhih ar ronildsomtims.

.. usd

Stion .. osting

Stio 6.. osting

42

ontrol Stok

43

osts Stok

Th graph shows a firm's pattrn o invntory ontrol. Look at th graph and omplt th sntnsblow b hoosing th orrt figur (a ).

Hr ar 20 ostsrlatdto holding stok,obtainingstok and stokout.Did olumn on th whih ost group thy blongto and writ thm in th appropriat nxt pag.(Sampls):

aountlng osts 1, 1 0 0 1,000 900

air onditioning for warhous traostsfor urgntpurhass

damag

soK

LVL UN]s

Bo0
70o 600
500 400 300 200 100 6 7 B I 't0 1'l 12 1 3 1 4 1 5 1 6 1 7 1 8

dtrioration

lnvntor osts

on apital intrst in stok invstd

loss of ustomrs

loss o ustomr goodwill

lost sal

pilfring

prodution stoppags insuran stors, and surity

lME _ WEEKS

purhasingdpartmnt osts stors'runningosts

ostsfor stting-up produtionrun

a) 700 units b) 300 units ) 900 units 4 Th buffr stok lvl d) 100pr wk ) 6 wks

tooling ostsor intrnalordring

transportosts

Wagsor stors, staff

work-orrustration

Stin .. ostiltg

S'tion 6.. osting

holding stok

Cost asertainment

tff. . p 9r*'.

stokout

Us th words in bold at th nd o ah o th ollowing sntnsto orm a word whih fits in th blank spa. (S xarnpl):

l hrr will alwaysb som n2Ic,1,1,r..i"alulating produtostso multiplproduts. 2 Yo u ndp rd ut oststo m ak a ............. btwn poduts. , ':::::-:::-:]]::j:uno th salsothmor

aurate

ompar

prfit 4 Pross ostinglooks at th a dpartmnt ovr a priod of tim. of ostsin aumulate

5 oprating ostingis th way of alulatingth ost o th ...... '... .' .. osrv is. 6 Matrial lossswhih resultromth naturof th oprating mthodar usually 7 Losssausdby inffiint oprations ar 8 h disposalof wastmight inur
obtining stok

provide

void rvnt epend ...b y thsalof srap . . b twn distint rover

9 So mo stsm ay b ......' .... srap and wast. ll

'.p'qP9rt....w

l0 Bo o kkr prs norm allyd on,tm ak a .' .......' ' ..

may b possiblon somprodutswhih ailth qualit ontrol. .............. in

rtify

|2 Injobbingprodution thris littlor no dsignfrom prvious ords.

repeat

Sction : osting Setion ..

45

osting Marginal

in ah of th graphsshown? A Whih ost bhaviourpattrnis illustratd osts smi-variabl urvi-linarvariablosts total fixdosts mainl variablosts total linar variablosts mainly flxd osts sts stppd th following ovrhadost itms? Whih graph rprsnts
OutPut-)

---) Output

is rquirdfor ightworkrson th produtionfloor, a) On suprvisor with ahightworkrrs. salarisinras so th ostsfor suprvisors' b) Wastdispsalostspr unit allas output rissshowing an onomyof sal. ) Roaltisar paid on ah unit produd. a small basi salary and d) Th produtionmanagrrivs ommissionon ahitm produd. a prntag and ) hr is quartrlystandinghargfor th tlphon additionalostsorahall mad. ) Thr is a standardhargfor th mahinand normal usag pr unit. but usagabovth agrdvoluminrass g) h rnt for th buildingsrmainsth samwhthroutput or drass. inrass

sIoN

7: PLANNING

AND CONTROL

46

planning Corporatr

Stion 7'. Plnning d otrol

DVLOPII\G A CORPORAT PLAN

ssessmnt Stg: . xtrnal nvironmnt nalzing raw matrials, skilld labour and othr rsours whih th organizaI"ion a n u s a n d l ) . . . . .

Th proessof dvlopinga oporatplan goesthrough severalstages. Put th itms (a_i) blow in th orrt pla on thr orporatplan. a) Stting oporat pois and diding about whr th organation wants to go in trms of prformanand rsults. b) Idntifying opportunities and thrats and analyzing the major strngthsand waknsss of th organization. ) Prparing ation plans and sttingtargtsfor diffrntdpartmnts. d) Analyzing prodution failitirs and prsonnl urrntly at work and analyzing urrnt trading ativitis. ) Agreing on th stratgis whih th organizationwill adopt. ) Considring th epetationsof th mploys, th ustomrsand the sharholdrs. g) Assssingpossiblefutur ations of ompetitorsand studyingonomi forasts and soial trnds. h) Rviwing th onomi,politial and soial fators whih a afftingth organation. i) Considring altnativstratgies.

. organization . utur . stakholdrs, ptations objectiv St{lg pprisI stg (sWoT) Iution Stg Strtegic pln opertionI plnning

2).....
3).....

4 ). . . . .

s).....
6 ). . . . . 7 ). . . . . 8).....

e ). . . . .

Stion 7..Plnnin nd ,ontrol

,I
I

Planninginformation

48

Budgting

Stin 7..Plning nd r'otro|

to ormth orrtword orah of th following: Rarrangth ltts pthigh wagsand dmandlow pris'mplos 1 Whrustomrs of ...... thris a ........ want high dividnds' sharholdrs . ( f l t o nfio t r i n s t) i...............

Fill in th missingwords in th sntns blow by making ombinations with th word .budgt'. Choos from th following.(Sampl):
approprtatton furrtional ash mastr ofir ommitt priod urrnt prinipal fid slling

, :T::::::"::]::

-1;;ljly

prdution, or profit markt bithr

l Nt yar,s budgtis bingprpardb th rdg th nt wwks. 2 Th salsmanagrhas to givhis budgtstimat to th ....... by tomorrowmorningso that h an hkit bfor th mtins nt wk. 3 Fo r mo stonrp anis th .' ......,. ....... is a y arb ut d u to th rapidlyhangingnaturof th ashionindustrythy prparthir budgtvr ourmonths. 4 hr is a limit t th amount omony whih ma b spnton rsarh and 2. ovrr

annot standstill, it must ithrgrow or dlinand so a nt ash flow 3 A businss ) ....' ......... i n r as i s t hg r o wt h( rg t tat' 4 orporatplanningmust plan svralyarsahadso (ongl grnra astforinge) p a r to f isa major f............... r............... 1............... planning. orporat m.......... 5 anagrsus(odmngill) diffrntonditions. undr ....to prditth utur

6 W somtimsssimilar hangsvry fou fiv or si yars;this is known as a p...'.......... ( l i a l yp t t a r n ). . . . . . . . . . . . . . 7 Whn mvmntsin an organizationfollow a simila pattrn to othr vntsthy l) .......... show(t or r i o n 8 To form a orporatpoli,orporatplanninglooks at vryasptoompany t............... as a (taltopont) ::::::: ::: ::::]: :iown 9 Changs in th population struturor ag profils of ustomrsar amplsof (gr aphmod i i n f o rm a t i o n. ...... d) ........ for growth,GDP about onmionditionswill inludforasts l0 Inormation (i on i nt fl a ) i ........ an d

''::: " ::::.: ::::: :::":]: :::',1.'flH;1 ;l]i],l"".'..

....... has b np rp ad . 6 In ordr to havan fftiv managmnt ontrol systm, Wprpara for a short priod otim. 7 Th marktdmandis or900,000 units' but th istingplant' whih is only apabloproduing500,000 units,is th fator. ' ':.:*:-:::::.::i::-:::.::o]"'o* into tn trritoris, ahwith its ow

dvlo pm nt. so an ...........

9 Salsmn's salaris' rnt for salsofis, advrtising and publiityar somo th itmsinludd in th 0 In ordr to mak surthat thrwill b noughash availabl to mtdmands and providadditional finani quird' a ........... ....'.. must b prpard.

''^: final ..'....' :::::::1.::: il:J:il:1THjH:"*1i..n.

Sctiott 7..Plnning nd ontrol

Stion 7..Plnning nd control

\arians /|o a,
A Dltth wrong word in itlics in th followingtwo sntns. l.|vourbl 1 Th diffrnbtwnth budgtdand atual rsultsis lvrs whn profits ar highr. |fvourb| 2 Th diffrnbtwnth budgtdand atual rsultsis dvers whn profits ar lowr. (A). (F) or advrs ar favourabl i th varians did B In th followingsituations l Thr hundrdtonnsof matrialswrusd at a prie of $45 pr tonn. Th standard pri is $47 pr tonn. 2 Th ompany bought salt at standard pri but th prossusd mor than plannd. 3 h workrs wokd hardr than xptdduring th ar and produtioninrasd. was f50,000. on ovrhad xpnditur 4 h budgtd was f65'000. Th atual ovrhad 5 Th hmialsusdin th prosswrusdin diffrrntproportions from th standardmix and th total pri was lowr. tam was away from work 6 on mmro th manuaturing without wagsbut th tam workd qually wll without him.
Math ah of th situations (1-6) abov with th orrt varian (a-f) blow. a) ovrhad pnditur varian

50

Tlephoning

Fill in th missing words in th tlphon dialogu blow. Choos rom th following:

Can I suggst

I'd also lik

What w nrd is

First of all

an you lt m hav I look orwardto

nam is

Wan arrang

How an I hlp you

That'srisht

Blum: Br g:

John Blum. H llo.(l) ...... .. ....... And rsBrg .l' m anag ingDirtorof WoodthLtd' a wood mahinrmanufaturr. ( 2 ). ' . ' ' . ' . . . . Oh,ys. . . . . . .? ..

Blum: Brg:

Wll, an assoiat in th industryrommndd ou. You hlpdrais finanfor Bill Wyld a wyars ago.

Blum: Brg:

Ys.(3) Wll, WoodthLtd now wantsto xpandinto nw maktswith a nw produt.Up till now Whavsrvdspialists in th wood industrybut our nWprodut is aimd at th small manufaturr. (4)........... ...... f. inan. Right! (5) ... . ....... I,ll ndsombakground inormation. (6)... ........ ....... a op y of our b alan sht and p rofitnd loss figursfor th past thryars?

b) matrial usagvarlan ) matrial pri varian mi vrian d) matrials ) laboumixturvarian fl labour ffiincyvarian Blum:

Stion 7'. Plning nd ontrol

Brg: Blum:

of ours. a l t t r yo ur idasand a ashflo w ' ...... o u t l i ning forastfor th nw produt' (7). . . ,,. ' .. Fin. If you lt m havthsby th bginningf nxt wk, hat will givm orth wkatr. a mting (8) .. ... ...'..' noughtim to look throughth flgurs. G ood. ( 9 )........... That'sfin.(l0) in th nt fw days. o n M o nday 16that 9 'lo k? ...' .' a . m ting your lttrand aounts .. riving

51

Control

Stion 7..Plnning nd ontrol

ompltth f,llowing words. l his typ of aountingis usdto mrasurhow fftiv managr's disionhas bn. 2 his is th first of,thrstpsin a formal ontrol sstm. 3 his is th sondo thrstpsin a ormalontrol systmwhrth objtivs arr put into ation. 4 h last of thrstpsin a flormalontrol systm whrth rsultsar studid. 5 his mansorrtand ontainingno mistaks. 6 A diffrn to th xptrdstandard. 7 To giv rsponsibility to othr poplin th organization rathrthan do it yourslf. 8 This kind of sstmaptsthat standardsan b hangdand adjustdas nssary. 9 Produtsdo this i thy rahth rquirdquality. l0 b hangor rststandads. l l his data allows you to omparaltrnativs. l2 his systmworks towardsan idal standard. l3 At prsnt, at th momrnt,today. D R_S___S_B__

Brg: Blum:

s__T__G

Brg: Blum:

oP____r_G
F___BA__ A--_--

Brg:

I'll post thm fistthing tomorrow.I look forwardto mtingyou on onday 16th.

v--_-N-

Blum: Brg:

Goodby. Goodb

o___ Loo_ _--o-R_V__ __P__-_l_--_-D-Loo c____N_ D

l4 only information whih is importantand signifiant. R _ _ _ V _ _ T t 5 An instrumntwhih ratsto rtainonditions and providsinformation. l6 To hang, altror adapt.

s__s__
M -.__F_

I rl
l

sTIoN 8: DCISION AKING

52

Performane

53

Break.vn analysis

Stion 8.' Dcision mkig

A ath th following phrasal vrbs with the orrt maning.(Sxampl): a) arrang/display 3 go over to 4 put forward 5 bing in 6 get out of 7 st out 8 to mak out 9 bring about ) undrstand d) austo happn ) avoid )nountr g) hangr h) submit i) arn
5'00010'000 15,000 20,000 25,000 0'000

Graph A

B Fill in th missing phrasal vrbs in th srntnsblow.Choos from th list (1-9) abov. 1 Th inasin raw material pris will ......... 2 Th ontrat to reflt th ruis liner will a rdution in profits. .......muh nddrvnue.

What do th lins and b in graph A rprsnt? a)-___-_ b )S - _ _ _ POINT

What is point alld? ) _ _ What do arasd and e rprsnt?

d)__--_

3 Inlud all th rlvantfigurson th prformanrport and thn it .........'... larlyfor sniormanagmnt. problmsof sttingralistibudgtsbaus 4 h ompanyhav........ thy hava poor aountingsystm. 5 Th dpartmnt managrs havto ........'... this wk. thir budgtsby th nd of

2 What is ara/in graph B known as?

M_____oF s

3 How muh ar fid pnsrsprr annum in graph A? 4 How muh ar th fidxpenss in B?

6 Bausoinompltrords, it is impossiblto ............ figurswralulated. 7 lt's amazingwhatsomefirms will do to ............

how th final

5 Whih graph is a basi profit graph?

payingorporatta.

8 Profits ovr th last threyars havinrasdstadilyand th firm has diddto ....... with th pansionof th businss. 9 Bausof larg variansbtwnth budgtdand atual osts,thy should ....... a diffrntmthodof alulatingth varian'

Sctin 8.. Disin nkig

54

thersults Presnting

Look at th ollowing drawings, thn fill in th missing words. Choos rom th ollowing:

a) Yu ar rquirdt b) In othr wrds ) In my opiniorr d) l'd prr

) I stronglrommnd to b 0 hr Sms by 8) H is supportd h) Lt m just larify .This is th brak-vn point. ....... w' llb sinto m ak a profitat 30.000 units.'

TheLow

+-!.96

2+

LAtsoiJB@$s . ovRtlAD6 tABlA}

a smallmistak ...'... in th alulation.'

_-l*MAttActNc*l .l DlREoR l
ANA6I.4N l | A0JNAN

soK |_
osolaim.

tzoo,ooo tB|=ts/s.v

rathrthan the ontinuousstok-tak prsnt doingan annual systm stok-tak.'

Stion 8..Disio mkig

Stion 8.' Decision mking

55

Priing
th ollowing:

56

words Confusing

blow.Choos from Fill in th missingwords in th sntns

hoos th orrtword in ah o th followingsntns. l W'r sttingall th pris or nt ear ptl ptth nw rangr whih won't b rdfor anothrr thrmonths. osts. rmmbr lremindhim to bring th omparativ 2 an o:u 3 Atr th onfusion ovr th bank transation,thy havagrdto liv lwve hargs. |ollusionwith ah othr to fix pris. 4 Ths two ompanishavbn in :ollision to th onr wr uSnow. lltrntpriing strutur 5 W should us an ltrntiv 6 W'v had an offiiousl offiil |etterto tll us about th hangsin xport rgulations. 7 Whn diding on nrw pris you mustn't los sightlsite of markt bhaviour. 8 On thy havagrdth figursw an precdl procedwith th osting. 9 Plas insurl ensurthat only th most rntfigursar inludd in th alulations. l 0 Whn wr ar stting standards w allow 10Yn for dint l dtiv goods' l l hr must b a mistak in th alulations somwhr. Ths figurs ar just not
crdibl l rditble.

bhaviour iling floor full ost

omptitors dmand ladr lgislation

disrtion mak or buy

lastiit substituts

pakagingan 1 For somr produts,suh as prfum,pnsivand attrativ ....f o r t h m . inr as t h . . . . . . .... ar in mptitionwith othr ompaniswho manufatur 2 Most businsss o r ............ si mi l arpr odut s shouldfirstlok at th prisstby his ........... 3 A manufaturr bforh stshis own pris. should b 4 Whn prparing information for priing disions,th aountant awarof markt markt,th should ar working in a vry omptitiv 5 If salsrprsntativs stprisat thirown ......... prhaps , ]::i:.:::::::::::::::onfidntial 7 Govrnmnt rgulatsth pris for rtain produts. thrwill b no hoiin th

t2 l3

Th ash budgt must tak ssonlll ssonbl variations into onsidration. l persutd for ta vasion. Th onsultant is bing pros:utd managmnt havr now didd what msuremnts lmeSurS to tak to

produt ar known as 8 Th maximum and minimum pris whih an b st for a rsptivl. and pri th pri

of asstm ofaprodut, , ': :::::::"::'":ffi:J:J::.?.."'ost

t 4 Th

inras produtivity.

l0 A pri ....... thirpris. stting

wathwhn is a produtwhih all othrompanis .......

llThofdmandshowshowonsumrswillratwhnpris ar altrd.

8.' Dision mki S,tin

57
apital

Invstmnt

Sti 8.. D,ision mking

EO JO

Deisions

h sam word is missing in ah o th following sts of thr sntns.Choos from th following:

ompltth llowing words by hosingan appropriat prfix.(Smprfixs may b usdmor than on.)Chos from th ollowins:

arnings

forasts

pay.bak

rrturn

(l) . Th stimatd

potrntial is vry importnt whn you a hoosing n .......

l Low dmandfor thir produtshas md produtionvry ..... profitabl. 2 W don't hava dtaildost analsisyt' so th managmrnt arr '.... didd abot futur invstmnt. 3 Yu must mak vrythingvry lar now i ordr to avoid anv ..... undrstandings latr' 4 Four SasonsLtd has bn ..... sussful in marktingth nw produt. 5 Sin ..... rgulation, tlephon ompanishavbnablto st thir own pris. 6 Th ompanwould b mor profitablithy ould rduth amount o ..... usdapaity. 7 Thy havediddto ..... ontinuth produtionof Produt P baus sals havfalln. Thy havhangdth way th masurprofit as absorptionosting is .....adq uat. 9 Th managmnt think that th poliy of xpandingsalsis ..... orrt. l 0 Prisfor raw matrialsate..... normally high at th momnt. l l hy ''... stimatd th fftof th omptitor's produtson salsin this marktstor'

invstmnt projt. . his projt will yild .......of800,000 ovr fiv yars. . h amount f mony an mploy rivs,and th mon gnratd tiom an projrt ar both known as .'.....'.'.. invstmnt

(2\
. Th want to know th xptd ........... on invstmnt. . Somprojts yild a high ratof not do thy baus b rjtd will . h is th profityou gt from it. on an invstmnt ....... (3) . Th

in th antn'sportsntrand staffroom will pnditur .......

bnfitth whol ompany. . In tn yarsw shouldb ablto rovr invstd. th .......... . h total anrountof ronwhih is invstd b th ownrsof a mpanis known s............ (4\ . What is th

liklyto b? priodo this invstnrnt ....... . Thy.llhavto b prpard romthis invstmnt. to wait longrfor a .....'.. . R ov r i n t ....'..'.... i s k n o wn a s gh o s t so a n i n v s t m n t

(s)
. .............. o utuinflation atshav not bn takn into onsidation. . Th atual onomi li o th assts turnd out t b longr than th original . Statmntsabout what is xptd in th futur ar ..........
i

t2 Th rportshowdthat moving th produtionto a nw sitwas ..... dsirabl. l 3 An inras in th priof land was totally.....ptd. l 4 Lots of th doumntation whih was lost in th fir is....' rplaabl.

Answers
sTIoN l: TH BASICS
Tst l 1 reditor 2 profit 3 loss 4 purhass 5 stok 6 withdrawal 7 dbtors 8 disount 9 balan l0 trial balne l l ariag 12 ldgs Tst 2 5 multipliation 2 formula 7 division l prntag 3 avag 8 rtio 4 addition 9 rate 6 subtration Tst 3 l assts 2 dpriation 3 loan 4 intrst 5 apital 6 drawings 7 shares 8 goodwill 9 aquisition 10 audit l 1 budgt 12 alan shet Tst 4 l aount 2 aountany 3 aounting 4 aounts 5 aountany aountant 7 aounts, aounting 8 aountant, aounts 9 aounting l0 aount l 1 aountany 12 aounting, aounts Tst 5 1) Tst 7 I from, to 2 btwen 3at 4of 5bv 6 by, to, of 1 8t 9of l0 at ll to 12 brtween Tst 8 kyboard l modm 2 srn 3 mous 4 tlephon5 fa 6 printr 7 CD8 manual 9 mnu bar 10 tool bar I I window l2 pape and pnil l3 rasr 14 (Also alld a rubbr') Tst 9 Aross 3 addrss 5 dirtoy (Som omputrs may us th word folder.) 7 ommand 8 rtriv 13 import 14 dlrt 15 display Dwn l sav 2 undo 4 databas 6 ass 9 sap l0 ntr l l sroll 12 fild 14 drag

2e) 3b)

4h)

'7 c) '8d) 9a) 100

si) 6D

Test A doubl salat xpand grow inrase improv jump rover ris rokt soar B dlin dras dpn dsnd dtriorate diminish drop dwindl fall rdu shrink slow down slump suffr

b stabl hold firm maintain sam lvl rmain onstant rtain position

r--l
!r II tl ll Il

16 abort SCTIoN 2: FUNDANTALs OF FINANCIAL ACoUNTING

Test 10 1 bnk hqu l l rossing 2 pying-in slip 10 ountrfoil 4 drawr 6 py 5 hqu numbr 72 dateofdposit 7 aount numbr 3 bank statment 8 bank ovrdraft 9 balan Tst 11 1 ptty ash 2 hargs 3 transation 4 brought' aid 5 disrpanis 6 stopped 7 ontra 8 lad 9 spimn l0 urrnt, dposit Tst 12 l invoi 2 tax point (y also b invoi dat.) 3 dspath dat 4 dsription 5 quantity 6 unit pi 7 amount (Somtims alld valu or total.) 8 trad disunt 9 valu addd tax l0 terms Tst 13 l d) salsday book (Also known journal.) as sals 2 3 4 5 6 ) trad disount a) rturns b) rdit ontrol a) bad dbts d) provision

7 b) aging 8 a) exmpt 9 ) rturn Tst 14 ror of omission (3) ror of ommission (9) error f prinipl (4) ompnsatingerror (2) ror of original ntry (6) rvrsalofntis (7) jounal (5) an undrast aunt ( l ) an ovrastaount (8) Tst 15 l) 2) 3i) 4h)

Tst17 lb) 2D 3) 4a)

d", ,:\
f It

ip (\
.v

B l 2 3 4 5 6 7 wastag pilfr embzzl falsiy misappropriation rror forgry

si)

ed) lo e)

6) 7h) 8i)

Tst 18 l stok-tak 2 publish, formats 3 intnal 4 dislosd 5 drivd 6 appndd 7 apportion 8 rmunration 9 aru l0 dfrrd l l emolumnts

8) 9a) l0 d)

6i) '7 e)

s0

Tst 21 l dnomination 2 pfn 3 ordinary 4 bonus 5 nominal, issud 6 prliminary 7 unalld 8 rdmabl 9 appropriation l0 intrim Tt22 I issued 2 appliation 3 all 4 sond 5 ovrsubsribd 6 appliations 7 rfund 8 'allotmnt 9 ss l0 allotmnt I I first 12 forfitd l3 eissud l4 nominal Tst 23 1 b) limitd 2 a) dd 3 a) implied 4 d) flutuating 5 ) slping 6 d) dissolution 7 b) Ralisation 8 a) dishargd 9 ) indbtdnss Test requst Jbr dvie''9, l l, 3, l0, l r p l .5 . , 2 , 8 , 7 , 1 2 ,4 , 6 Dar s Simone Wo frinds and mslf hav disussd stting up a partnship and w ar now writing to

you for advi. So far we hav agrd tht Fod will giv f20,000 as apital but will not tak part in th running of th businss.r. Grnt will manag th businss but ontribut only 13,000. r Blest will provid f8,000 as apital and assist in th businss if and when rquird. W now nd finanial advi about th strutu of th partnrship and would b gratful if you would assist us. W hav plannd our nxt mting for 2l Fbruary, and would lik to disuss your idas thn. W look forward to harins from you. Yours sinrly

I trust that you will find thse points usful. If you wish to disuss anything furthr plase lt m know. Yours sinly 2tta;tle-' Camilla Simon Tst 25 l) 2) d)

4r)

5a) 6h) 7e) 8c)

STION 3: BUSINSS ORGANIZATION Tst 19 l h) dnturs 2 ) patnership 3 fl dirtrs 4 j) holding ompany 5 g) privat limitd 6 d) stok hang 7 i) publi limitd 8 ) non-profit-making 9 a) subsidiary l0 k) annual gnalmting 1l b) group

)rl.n Vzr
Jan Blst

SCTION 4: FI NAN CIA L ACoUNING

Tst 1 1 ordiny 2 xtraordinary 3 tunovr 4 dividnd 5 distribution 6 ost ofsles 7 administrativ xpnses 8 rtaind

Tst 20 A Noun fraud dit/dption pilring Wastag misappropriation breakag rgry falsifiation rror mbzzlmnt dfraud
div

Vrb

pilfr wast mlsapproPnatr brak forg falsif rr

emzz|e

Tst 26 l wekl Dar r Blst 2 mploys Thank you fo our lttr of 3 ddution 26 Januar rgarding th setting 4 rlif up of a partnrship. I am now 5 unmploymnt,rtiremnt witing to giv you my first 6 ontributions thoughts whih ou may Want to 7 ddutibl disuss furthr. 8 non.ontributory First o all, I suggest that as 9 statutory Ford is not ging to b l0 ntitlmnt involvd in th daily managel l inmntal mnt of th partnrship h b 12 widths mad a limitd partnr. This mans that his liability is limitd est 27 to th amount of apital invstl t t rI : 6 , 2 , | 0 ed by him. H an ivea fixd Ittr2..5, 9, 7, amount of intrst on his invstlttr3: 8,4, I mnt or an amount basd on th profits. I l that r Gant, as Dar Mr Pndrgast th manging partnr, and r W noti from our fils that Blst who will be ativly your 1997 Inom ax rturn involvd, should riv salaris has not bn ompltd yt. fo thir work. W would like to omplete it Tuning to profit sharing, I and would b gatful if you think it would b bst or ah ould lt us have the dtails of of the partnrs to reiv intrdividnds rivd from your st on their apital invstmnt UK shaholdings for th yar and thn deid how to shar ndd 5 Apit l997. th rmaining profits. Yours sinrly Finally, th law dos not rquir .l -4ayou to draw up a |ega| dd of IV',Y, IW,d partnrship but I think you , should hava wittnagrmnt. . D. Tippet h ippt Partnrship

Dar Sir/adam on bhalf of Collins ntrpriss Ltd w nlos a opy of th flnanial aounts for th yar ndd 30 November |99,7 togthrwith a op o our Cor. poration Tax ComPutation. W also nlos th Coporation Tax Rtun and trust that you will b abl to agr our figurs in du ours. Yours fithfully I M. D. Tippt Th Tippt Partnrship n. Dar Ms Post W hav rntly rived a opy of your l997198tax assssmnt. As this is inorrt w hav lodgd a Noti of Appal. W would rommnd that you mak paymnts on aount of L2,345 on I JanuarY 1998 and f2,46 on 1 July to avoid intrst hargs. Yours sinrly

tfN{

Tst 29 l wrot off 2 st out 3 arry on 4 sll off 5 st asid 6 turnd out 7 look up 8 go ovr 9 los off l0 draw up 1l ath on 12 lar up Tst 30 ld) 2h)

SCTION 5: FINANIAL sTATMNTS AND RATIOS

Tst 33 I mark-up 2 margin 3 ommission 4 intrprt 5 liquidity 6 stokturn 7 sals mix 8 turnov 9 solvny l0 garing l1 yild 12 fixd 13 variabl 14 trnd Tst 34 A lb) 2d) 3) 4a) 5) B urnt atio (b) pri arnings ratio () fixd assts/ntworth (a) asst/sals() aid tst ratio (b) gross profit/sls (d) dividnd ovr for rdinary shars () borrowing/nt worth (a) olltion priod for dbtors () nt profit aftr tax/sales (d) Tst 35 l Dvelopmnt osts 2 Tangibl assts 3 Fixturs and fittings 4 Stok 5 Amounts owd by rlatd ompanis 6 Nt urrnt assts 7 Creditors: amounts falling du aft on ya 8 Calld up shar apital 9 Gnral rserv l0 Profit and loss aount Tst 36 l FIFO (fist in, first out)

q I' ,il
rl ll ll l1 lt Il Il ll ll Il ll Il It ll ll Il ll ll ll ll Il It ll ll II ll ll II ll Il II ll lt II ll ll Il ll Ir It 1l ll II tl il tl tl ll ll II ll ll II tl ll tl tl ll II lt ll ll II 1t ll II 1l ll lt ll ll ll lr II ll ll II 1r lr lr ll II lr ll ll lr ll ll ll ll tl ll ll ll ll li II II ll ll ll ll ll l, ll II al ll

l Il 1l Ir I1 l1

dp
,l

2 3 4 5 6 7 8 9 l0 l1

LIFO (last in, first out) Avrag ost Prim ost Nt ralizabl valu rplaemnt ost work-in-progrss raw matrials histori ost sale or rturn stok lvl

6 ) dpriation 7 ) sale offixd asset 8 d) total gnratd from or. atins 9 b) releas

tooling osts fo intenal ordring stokout prodution stoppags loss of ustomr goodwill tra osts for ugnt purhass lost sal wok-fo frustration loss of ustomrs Tst 44 l inauray 2 omparison 3 profitabl 4 aumulation 5 povision 6 unavoidabl 7 prvntabl 8 xpenditur 9 rovrabl/rovrd l0 distintion l l rtifiation l2 rptition Tst 45 A 1 total linear variabl osts 2 tota| fixd osts 3 stppdosts 4 smi-variablosts 5 mainly vriabl osts 6 mainly fixd osts 7 urvi-linar variabl osts B a) b)'7 )l e)4

sCIoN

6: CoSTING

Tst 37 A l) 2) 3d) 4c)

30

sc)

sD

4a)

6a) 7f) B 1 2 3 4 5 6 7 8 liminatd aquird amortizd usful ratd brought rsrvs balan sht

Test 40 1 dirt 2 onvrsion 3 indiret 4 ntre 5 apportionmnt 6 fixd 7 labour 8 marginal 9 intgatd l0 intrloking Test 41 l finanial data 2 maimum profit 3 arbitrary disions 4 onsumabl matrials 5 prim ost 6 businssfailitis 7 manufaturing pross 8 funtional analysis Tt42 l d) l00prwk 2 ) 6 wks 3 a) 700 units 4 b) 300 units 5 ) 900 units Tst 43 holding stok wags for stors' staff invntory osts stors' insuran and surity pilfring intrst on apital invstd in stok air onditioning for warhous dtrioration damag storrs'running osts btaining stok transport osts stting.up osts for podution run aounting osts purhasing dpatmnt osts

6) 7k) 8)

eD

M. D. Tippt Th Tippt Partnship

,1:p, l

10 m) 1l i) 12 n) 1 e) 14 b) Tst 3l l diffrn btwn 2 refer to 3 insist on 4 in lin with 5 rason for 6 rsponsibl for 7 blam for 8 agr with 9 suspiious of l0 ausd by Tst 32

Tst 28 l d) ful for th vans: this hanges and is a ost t th businss. is a 2 b) thft:dtrioration gradual loss in valu. Thft iS total. 3 b) onsumption: obsolt mahins still xist but onsumd matrials ar usd up. amortization 4 a) motgags: rfrs to intangibl assts, a mortgag is a liability. 5 b) buildings: dpltditms bome smallr' 6 d) markt valu: th prie an asstould b sold for todaY. 7 ) rvalud: givn a nw stimat of its valu. 8 b) sals aount: rords salsof goods podud bv th firm. not assts.

Tst 38 l onvntion 2 omplian 3 appliabl 4 adjustmnts 5 stating 6 7 8 9 l0 II 12 l3 14 15 pr annum stimatd arising exss is inurrd ruling projted xisting in rsptof onsidrd

d)s 06 2
SCTION 7: PLANNING AND CONTROL Tst 46 l h) 2 d) 3g) 4 D 5 a) 6 b) 7 i) 8 ) 9 )

le) 2) 3D 4D si)
6a) 7e) 8)

eh)
l0 d)

Test 39 l b) sours 2 a) appliation 3 d) ash 4 b) woking apital 5 a) ash flow

Tst 47 l onflit of intrst 2 ointd 3 targt 4 long rang forasting 5 modlling 6 ylial pattn 7 orrlation 8 total onpt 9 dmographi l0 inflation Tst 48 l budgt ommitt 2 budgt offir 3 budgt priod 4 appropriation budget 5 fid budgt 6 urnt budget 7 prinipal budgt 8 funtional udgt 9 slling budgt l0 ash budgt l1 mastr budgt Test 49 A I favourable 2 advrs B 1F 2^ 3F 4^ 5F 6F C a)4 b)2 )l )6 03 Tst 50 l y nam is 2 How an I hlp you 3 That right 4 What w nd is 5 First of all 6 an you let m have 7 Id also lik 8 w an arrang 9 Can I suggst

l0 I look forwad to Tst 51 l rsponsibility 2 stting 3 oprating 4 fdbak 5 aurat 6 varian 7 dlgat 8 opn.loopd 9 onform l0 rvis 1l omparativ l2 losd-loopd 13 urrnt 14 rlvant 15 snsor 16 modify

4 f4,000 5 Graph B st 54 l a) You ar rquired to 2 ) Thr sms to b 3 h) Lt m just larify 4 b) In oth words 5 ) I strongly rommnd 6 ) In my opinion 7 g) H is supportd by 8 d)Idpf Tst 55 l dmand 2 substituts 3 omptitos 4 bhaviour 5 distion 6 make or buy 7 lgislation 8 iling, floor 9 full ost l0 ladr l l lastiity Tst 56 1 xpt 2 rmind 3 waiv 4 ollusion 5 altrnativ 6 offiial 7 sight 8 proed 9 nsur 10 dfetiv l1 rdibl l2 sasonal 13 prosutd 14 masurs Tst 57 1 earnings 2 rturn 3 apital 4 pay-bak 5 forasts Tst 58 l profltabl 2 undecided 3 zt.sundrstandings 4 sussful 5 dergulation 6 zusd

{*

7 8 9 l0 ll l2 l3 l4

ri.rontinu ladquat icorrect abnormally lidrstimatd dsirabl ptd r7rpIabl

SCTION 8: DIsIoN AKING Tst 52 A l go ahad 2 run into 3 go ovr to 4 put foward 5 bing in 6 gt out of 7 st out 8 mak out 9 bring about

b) proed Q nountr g) hang h) submit i) an ) avoid a) arrang/ display ) undrstand d) aus to happn

B I 2 3 4 5 6 7 8 9 bring about bring in st out run into put forward mak out gt out of go ahad go ovr to

d)s

Tt 53 1 a) total ost b) sals ) brak-evnpoint d) loss ) profit 2 f)|vIarg1nofsafty 3 6,000'000

Word List
Th numbrsJtr th n|risr th tstsin l'hir,h th(lr' A abnormalI,58 ass,9 aount,5 aount fol 5 aont numbr, l0 aount (n)' 4 aountany,4 aountant'4 aounting' 43 ounting (adil' a aounts(n),4 aru' l8 aumulation,44 aurat.5l aquird,37 aquisitin'3 addition,2 addss,9 adjustmnt'38 administrativpnss,l 6 agingshdul'l3 agree,25 agrwith, 3l allotmnt,22 altrnativ,56 amortization,28 amortize, .7 a m o u n t ,l 2 annual gnalmting,19 annum, 38 appnd, l8 appliabl,38 appliation, 22, 39 apportion, l8 appaisl,46 appopiation,2l appropriation budgt,48 arbitrarydisions, 41 aris, 38 Artils of Assoiation,30 assssmnt,46 assts,3 at,7 audit assignmnt' 30 audit (n), 3 auditor,30 avg.2 avragost. 36 B b a d d b t ,l 3 balan, l. l0 balansht'3, 37 bank hqu,l0 bank ovrdaft. l0 bank statmnt. l0 basi pofit' 53 bhaviour,55 btwn,7 blam o 3l bonus.2l book valu,25 brak, 20 brakag,20 brak-vnpoint, 53 bring about, 52 bring in, 52 brought forward, I I budgt' 3 budgtommitt,48 budgt offi,48 budgt priod, 48 buffr stok, 42 businssfailitis'4 l ,7 b all aounts, 5 lard,l l los off, 29 l o s d '5 l llusion,56 mmission,33 ompaativ, 5l omparison,44 ompnsatlngerro l4 omptito55 mplian,38 ompliantst,30 onflit of intst, 47 onform,51 onsutivnumbrs,30 onsidr,38 onsolidatd aonts,25 onsumablmatrials' 4l ontinuousaudit, 30 ontra, l l ontributiorr, 26 onvntion'38 orrlation,47 orroboat,0 ost apportionmnt, 40 ost ntr,40 o s t o f s a l s ,l 6 ostS onvsion,40 urvi-lina45 dirt' 40 fid, 40, 45 indit,40 labou 40 marginal,40 snri-variabl, 45 stppd, 45 total fid, 45 total Iinavaiabl, 45 variabl,45 ountrfoil,l0 create,37 rdibI,56 dit ontrol, l 3 rdito l ossing'l0 u r r n t ,l l , 5 l urntassts, 35 urrntbudget'48

a||,22 alld up sharapital,35 apital,3, 57 rriag, l arrid forward, l l arr on,29 ash budgt,48 ash flo 39 ash funds' 39 t h n , 2 9 ausd by, 3l CD,8 iling,55 hags,l l hqunumb l0 liy,54 lar up, 29

ustomrgoodwill' 43 li pattn,47 D dmag,43 databas,9 l9 dbntur, dbto 1 dit,20 div,20 20 dption, dlin,6 drs, 26 ddutibl, d d u t i n2 .6 dd,23 dpn,6 dftiv,56 lfrd,18 dfiaud, 20 5l dlgat, dlt,9 dmand,55 dmographi,47 dnomination,2l dpltion,28 d p o s i t ,1 0 , l l 3. 28 dpriation, 58 drgulation, driv,l8 dsnd,6 d s r i p t i o nl,2 6 dtiorat. 43 dtrioration,28' osts,35 dvlopmnt .btwn. 3l diffrn diminish,6 dirtor,l9 dirtor,9 disharg,23 disls,l8 58 disntinu, disount.l ll disrpan. disrtion,55 d i s k ,8 dispath,l2 displa,9 dispsal.28 28 disps, d i s s o l u t i o n2 ,3 distintion'44 distributin,l6 d i v i d n d ,l 6 division,2 doubl,6

drag,9 draw up, 29 daw10 drwings,3 dop,6 dwindl,6

57 anings. 55 lastiit. 37 liminat, emezz|e,2 mbzzlmnt'20 l8 molumnts, 26 rploys' 56 nsur, ntr,9 ntitlmnt,26 rr, 20 ro 20 or of ommission,l4 ror of omission, l4 nt.l4 rro of originzrl rro o pinipl,l4 salat,6 38 stirnatd, valuation.46 pt,56 ss,22, 38 xmpt,l3 ist,38 pand.6 44 pnditur' 46 tnalnvironmnt, l6 xtraordina, F fall. 6 20 alsifiatiorr. falsif. 20 fx' 8 5l tdbak' fild' 9 FlFo' 6 finanialdt' 4l linanial honmoon,25 first,22 fixd,33 28' 35 fid assts, fid budgt.48 5 lixtursand fittings, floor, 55 flutr"rating,23 57 orast, fbfitd'22 org,20

orgry,20 format, l8 formula,2 rud,20 from,7 frustration, 43 full ost, 55 4l funtionalanalysis, f i r n t i o n ab l udgt.48 46 tu, G garing,33 gnral srv. 35 gt out o, 52 go ahad.52 go ovr,29 g ovr to, 52 goodwill,3 group, l9 grow.6 H histori ost, 36 hold firm,6 holding ompany.19 I I'd prf 54 implid,23 impot,9 improv,6 i n l i n r v i t h .3 l in my opinion. 54 in othr wrds,54 in rsptof, 38 inaura.44 58 iadquat' inort.58 6 inas, 26 inrmntal' inu,38 2 indbtdnss' inflation,47 insiston, -lI 4J insuran, 40 ost aounts, intgatd 3, 43 irrtrst, intrim,2l intrlokingost aounts'40 i n t r n a l ,l 8 33 intrprt, invnty,43 invoi.l2 irrplaabl.-58 issu2 ' l. 22

J joint vntur, 25 journal,l4 jump,6

l9 non-profit-making,

o
objtiv,46 obsolt,28 of,7 offiial, 56 on aount,5 on aount of, 5 on no aount,5 on thir own aont o p n '5 l oprating,5l oprationalplanning,46 ordinary, l6 ordinar shars, 2l oganization,46 orintd,47 ovrast, l4 22 ovsubsribd, P papr and pnil,8 partnrship,l9 patnt,37 pay-bak,57 pay,l0 paying-inslip, l0 prntag,2 ptt ash, l l pilf 20 pilfring, 20' 43 poIit phrass ... a bit mor' 32 t . . '5 0 an I suggs. Can ou lt m hav ...,50 Could I askou to ...,32 Don't mntionit,2 Don't worr. 32 First of all, 50 Good moning,32 How an I hlp ou?, 50 I d a l s o l i k . . . '5 0 I look forward to ...,50 I'm afraid, -12 Is nxt Frida suitabl?,32 ,2 M a I i n t r o d u . . .3 M y n a m i s . . . ,5 0 Plstak a st.32 Tht right, 50 W an arang...,50 What w nd is ...,50 Would you lik ...,32 shars,2l prfrn prliminar,2l 44 pvntabl,

kybard, 8 L launh a bid. 25 I a dt i m , 4 2 lad55 ldg l lgislation, 55 LIFO,36 limitd patn23 liquidit' 33 loan, 3 loation,37 long rang forasting,47 look up, 29 l o s s ,l , 5 3 lost sal,43 M maintin sam lvl. 6 mk or buy' 55 mak out' 52 manual,8 manuaturingpross,4 l margin, 33 margin of safty,53 mark-up,33 mastr budgt,48 maximum profit,4l masurs,56 morandum of Assoition, 30 mnu ba 8 minority intrst, 25 misappropri ate,20 misappropiation, 20 58 misundrstanding, modelling,4T modm,8 modif, 5l monopoly, 37 mous,8 multipliation,2 N ngativgoodwill' 37 nt urrnt assts,35 nt ralizablvalu, 36 nominal2l,22 non-ontibutor' 26

prim ost, 36, 4l prinipl budgt,48 printr, 8 pir priod, 30 privatlimitd ompany,l9 prod,56 prodution stoppag,43 p r o f i t ,1 , 5 3 ProIrt and loss trount,35 pofital,44 pjt,38 posutd, 56 provision, 13,44 publi limitd mpany,l9 p u b l i s h ,1 8 purhass,l purhasingdpartmnt, 43 put forward, 52

quantity,12 R rate,2 rat of dmand,42 ratio,2, 3, 4 aid tst,34 assts/sls, 34 borrowing/ntworth, 34 apital strutur,34 olltion priod for dbtors, 4 urrnt,34 dividnd ov for odinary shars,34 worth, 34 fixd assts/nt gross profit/sals, 34 34 invstmnt, liquidity,34 nt profit attaxlsals,34 pri arnings,34 profitability,34 us ofassts,34 raw matrials,36 RalizatiorrAount, 23 asonfo 3l rommnd, 54 rovr, 6 44 rovabI' tifiation,44 2l rdmabl, rdu, 6 frto, 3l reftnd,22 22 issu, 39 las,

rlvant, 5l rel,ief ,26 rmain onstant' 6 mind, 56 rmunration, 18 rord |eve|,42 rordrquantit,42 rpetition'44 rplamnt ost, 36 rquird to, 54 rsarhnd dvlopmnt,37 rsvs,37 rsponsibility, 5l rsponsibl fo 3l rtain position,6 tind,16 rtimnt pnsion,26 rtriv'9 rturn, l3, 57 rturn (n). 13 vrsal ofntris, l4 rvis, 5l is.6 rokt. 6 ul,38 un into, 52 running osts,43 s salor turn,36 sals,53 salesday book' l salsmix. 33 sav,9 srn.8 srll,9 sasonal'56 sond,22 43 sr.rity, sll ofl 29 sllingbudgt,48 snsor, 5l st asid,29 st out, 29, 52 s t t i n g5 ,l stting-up,43 shar,3 show intrst, 25 s h r i n k ,6 sight,56 skilld labour force' ,7 sleping partner'23 slow down, 6 slump,6 soar,6 solvny,33

Sour'39 spimn, l l stabl,6 stakhold46 stt,38 statistialsampling, 30 statutory,26 sttutoraudit, 30 stok, l, 35 stok hang,19 stok lvl, 36 stok-tk, 18 stokturn,3 stoppd' l l plan,46 statgi subsidiary'19 substantiv tst,30 substitut,55 subtration, 2 suff 6 supportdb' 54 suspiiousof, 3l SWo, 46 tak into aount,5 tak-ovr bid, 25 tngiblassts, 35 target,47 t point, 12 tmingand lading' 30 tlphon' 8 trms,l2 th smsto b, 54 to' 7 tool bar, 8 toling,43 total onpt,47 total ost, 53 total gnratdtiom opations, 39 trad disount, 12, l trad maks, 37 transation'l l transpot,43 trnd,33 triai balan'l tun out. 29 turnov 16,33 U unvoidbl,44 unalld,2l undidd. 58 underast,14 undrstimat. 58

undsiabl,58 undo, 9 unmploymnt bnfit,26 unptd,58 unit pri, 12 unpofitabl,58 unsussul. 58 unusd,58 urgnt,43 usful. 37 v vlrraddd tax. 12 variabl,33 varian,49,5l advrs,49 favourabl.49 labour ffliny,49 \abourmitur,49 matrial pri, 49 matrialusag'49 matrialsmix,49 ovrhadxpnditur,49 W wiv'56 walk through tst' 30 warhous, 43 wastag,20 wast,20 wkly,26 width' 26 window.8 withdrawal. l work-in-progrss, 36 work-Ibr.43 working apital,39 writ off, 29 Y vild. 33