Apr 14, 2016
- Complete the sentences below. Use the key words if necessary.
- Fixed and current assets
key words
In accounting, assets are generally divided into fixed and current assets. (or non-current assets) and investments, such as buildings and equipment, will continue to be used by the business for a long time. are things that will probably be used by the business in the near future. They include — money available to spend immediately, — companies or people who owe money they will have to pay in the near future, and stock.
If a company thinks a debt will not be paid, it has to — take action in preparation for the loss happening, according to the conservatism principle. It will , or abandon, the sum as a , and by charging a corresponding amount against profits: that is, deducting the amount of the debt from the year's profits.
Valuation
key words
Manufacturing companies generally have a stock of raw materials, — partially manufactured products — and products ready for sale. There are various ways of valuing stock or inventory, but generally they are valued at the , which means whichever figure is lower: their cost — the purchase price plus the value of any work done on the items — or the current market price. This is another example of conservatism: even if the stock is expected to be sold at a profit, you should not anticipate profits.
Tangible and intangible assets
key words
Assets can also be classified as tangible and intangible.
are assets with a physical existence — things you can touch — such as property, plant and equipment. Tangible assets are generally recorded at their historical cost less — the amount of their cost that has already been deducted from profits. This gives their .
include - legally protected names for a company's products, — exclusive rights to produce a particular new product for a fixed period, and — names or symbols that are put on products and cannot be used by other companies. Networks of contacts, loyal customers, reputation, trained staff or 'human capital', and skilled management can also be considered as intangible assets. Because it is difficult to give an accurate value for any of these things, companies normally only record tangible assets. For this reason, a going concern should be worth more on the stock exchange than simply its or : assets minus liabilities. If a company buys another one at above its net worth — because of its intangible assets — the difference in price is recorded under assets in the balance sheet as .
- Fixed and current assets
- Choose words and expressions with the following meanings.
- An amount of money that is owed but probably won't be paid — . . .
- net book value
- patent
- bad debt
- The accounting value of a company (assets minus liabilities) — . . .
- goodwill
- net worth / net assets
- net book value
- A legal right to produce and sell a newly invented product for a certain period of time — . . .
- patent
- trademark
- goodwill
- The historical cost of an asset minus depreciation charges — . . .
- net book value
- provisions
- net worth
- The amount a company pays for another one, in excess of the net value of its assets — . . .
- goodwill
- bad debt
- good debt
- A legally protected word, phrase, symbol or design used to identify a product — . . .
- trademark
- patent
- goodwill
- To accept that a debt will not be paid — . . .
- credit
- to make provisions
- write off
- To deduct money from profits because of debts that will not be paid — . . .
- work-in-progress
- to make provisions
- write off
- Products that are not complete or ready for sale — . . .
- work-in-progress
- trademark
- debt
- The amount of money owed by customers who have bought goods but not yet paid for them — . . .
- bad debt
- debtors / accounts receivable
- write-off
- An amount of money that is owed but probably won't be paid — . . .
- Match the two parts of the sentences.
- A company's value on the stock exchange is nearly always . . .
- by deducting the amount from profits.
- are examples of tangible, fixed assets.
- or the current market price, whichever is lower.
- higher than the value of its net assets.
- current assets.
- are examples of intangible assets.
- Brand names, trademarks, patents, customers, and qualified staff . . .
- higher than the value of its net assets.
- are current assets.
- are examples of intangible assets.
- by deducting the amount from profits.
- are examples of tangible, fixed assets.
- or the current market price, whichever is lower.
- Cash, money owed by customers, and inventory . . .
- are examples of tangible, fixed assets.
- are current assets.
- are examples of intangible assets.
- higher than the value of its net assets.
- by deducting the amount from profits.
- or the current market price, whichever is lower.
- Companies record inventory at the cost of buying or making the items . . .
- are examples of tangible, fixed assets.
- or the current market price, whichever is lower.
- are current assets.
- are examples of intangible assets.
- higher than the value of its net assets.
- by deducting the amount from profits.
- Companies write off bad debts, and make provisions . . .
- by deducting the amount from profits.
- are examples of tangible, fixed assets.
- higher than the value of its net assets.
- are examples of intangible assets.
- are current assets.
- or the current market price, whichever is lower.
- Land, buildings, factories and equipment . . .
- are examples of intangible assets.
- are current assets.
- or the current market price, whichever is lower.
- by deducting the amount from profits.
- are examples of tangible, fixed assets.
- higher than the value of its net assets.
- A company's value on the stock exchange is nearly always . . .
- Sort the following into Current, Fixed and Intangible assets.
- buildings
- Intangible assets
- Fixed assets
- Current assets
- goodwill
- Intangible assets
- Current assets
- Fixed assets
- stock
- Intangible assets
- Current assets
- Fixed assets
- cash in the bank
- Fixed assets
- Intangible assets
- Current assets
- human capital
- Intangible assets
- Fixed assets
- Current assets
- land
- Fixed assets
- Intangible assets
- Current assets
- debtors
- Intangible assets
- Current assets
- Fixed assets
- investments
- Current assets
- Intangible assets
- Fixed assets
- reputation
- Fixed assets
- Current assets
- Intangible assets
- buildings
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