Week 1 Terminologies

Current Assets: Current assets refer to the assets that enterprise can be realized or utilized within one year or an operating cycle more than one year.

Cash: Cash includes the final balance of the three accounts: cash on hand, cash in bank, and cash equivalents, and the monetary fund with special purpose are not included.

Accounts Receivable: Accounts receivable includes the payment should be received for selling goods, providing services and other business activities.

Other Receivables: This subject accounts for receivable and temporary payment expect for deposit paid, buy back the sale of financial assets, notes receivable, accounts receivable, prepayments, Dividend Receivable interest receivable, accounts receivable, subrogation receivable, accounts receivable reinsurance, reinsurance contract reserve receivable and other receivables. (Example: Petty cash for traveling)

Prepaid Accounts: This subject shows the advance money paid by firms in accordance with the contract. In situation of limited advance payment, this subject is not necessary to be set up, and will the credited directly to the "accounts payable" item.

Inventory: inventory refers to finished goods or commodities, products in the production process, materials used in the production processor the provision of services held for enterprises held in daily activities

Deferred Expenses: deferred expense is the expense already paid but should be shared by the current and future periods, such as low value consumable amortization, a large amount of lump-sum property insurance fees, sewage charges, technology transfer fees, advertising fees, fixed assets repairmen fees and prepayment for the rental of the fixed assets.

Non-current Assets: non-current assets refer to the assets other than current assets.

Long term investment: Long-term Investments refers to the investment that does not meet the conditions of short-term investment which is not ready for cycling into cash in a year or an operating cycle more than one year. Long term investment can be divided into long-term stock investment, long-term investments in bonds and other long-term investments according to the nature (Example: Inject equity establish subsidiaries; Purchase bonds)

Fixed Assets: fixed assets are a tangible asset that has the following characteristics at the same time: (1) held for production of goods, providing labor services, rental or business management; (2) the service life should be more than one accounting year. (Example: Equipment Plants Automobiles computer equipment factory car Computers)

Intangible Assets and Other Assets: refers to the identifiable non monetary assets which have no physical substance owned or controlled by enterprises. This account includes the intangible assets held by the enterprise, including patents, non patented technology, trademark, copyright, the right to the use of land. (In the current criterion, goodwill is separated from the five lists of assets, but this course is not involved in such specific accounting treatment, and it still will be categorized in the concept of intangible assets.)

Depreciation: depreciation refers to the depreciation of fixed assets within a certain period to make up for the loss of fixed assets value in accordance with the rate of extraction, or fixed assets depreciation computed by the depreciation rate according to the uniform provisions of national economic accounting.

Biological Assets: A biological asset refers to the animal and plant. Biological assets are classified into consumptive biological assets, the productive biological assets, and public welfare biological

assets. Consumptive biological assets refers to the biological assets held for sale in the future, or will be harvested as agricultural products, including growing field crops, vegetables, timber and livestock. The productive biological assets refer to the biological assets held for the output, services or rental of agricultural products, including economic forest, firewood forest, husbandry animal and draught animals. The public welfare biological assets refer to the biological assets for the purpose of protection or environmental protection, including the windbreak and sand fixation forest, forest for soil and water conservation and water conservation forest.

Financial Assets: financial assets usually refers to the enterprise's cash, bank deposits, other monetary funds receivables (such as enterprise deposit in other city, bank check deposit, bank draft deposit, credit card deposit, credit guarantee deposit, Refundable deposits etc.), notes receivable, accounts receivable, other receivables, loan equity investment, bond investment and asset formed by financial derivatives.

Fair Value or fair market value / fair price: the voluntary price fixed by both parties that familiar with the market situation and determined in the even bargain conditions, or the price by unrelated parties in even bargain under the condition of an asset can be sold or a liability can be off the price.

Historical Cost / original cost: cash or cash equivalents paid for the asset. Liabilities are those that will be paid in cash or cash equivalents in the normal business activities.

Financial Statement in Million Dollars

Assets Current assets Cash Accounts receivable

Liabilities Current liabilities 808 Short-term borrowing 1180 Accounts payable 1262 688

Other receivables Prepaid accounts Inventory Deferred expenses Others Non-current assets Long-term investment Fixed asset Intangible assets and other assets Total Assets

21 Other payables 221 Deposit received 527 Other liabilities 9 Total current liabilities 290 Noncurrent liabilities 60 Long-term loans payable 5422 Bond payable 168 Long term payable 8706 Others Shareholer's equity Capital stock Additional paid-in capital Surplus reserve Retained earnings Total liabilities and shareholders' equity

9 0 1044 3004

1368 0 12 793

498 2002 308 722 8706