Exercises

I. Give Ukrainian equivalents to the following phrases and translate the sentences in which they are used.

Actual dollar amount; adjustment for returns, allowances and discounts; merchandise inventory; to take advantage of purchase discounts; raw-materials inventories; work-in-process inventories; direct manufacturing costs; members of the sales force; pretax income; a sufficiently wide range of information; issue of shares or debentures; to arise from normally operating activity.

II. Find in the text English equivalents to the following words and word combinations. Make sentences of your own with these phrases.

Виключно від продажу товарів; трохи пошкоджений або забруднений товар; вчасно сплачувати рахунок; залишок; купляти для перепродажу; товари, що є в наявності; запаси сировини; витрати на рекламу та просування товарів; інші витрати; податок на прибуток; виплачувати дивіденди акціонерам; зробити повну оцінку діяльності фірми; виконувати фінансові зобов’язання; інвестиції, зроблені протягом звітного періоду; власний капітал; запозичення.

III Answer the following questions.

1. What is the purpose of a Profit and Loss account? What kind of information does this statement provide?
2. What is the composition of a Profit and Loss account?
3. What are the major classification of (a) revenues, (b) cost of goods sold, and (c) operating expenses?
4. Explain how a retailing firm would determine the cost of the goods it sold during an accounting period.
5. How does a firm determine its net income after taxes?
6. Do the balance sheet and the profit and loss account contain all the information you might want as a potential lender or stockholder? What other information would you like to have?