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Unit Two Accounting Method of Fund Procurement

Unit Two Accounting Method of Fund Procurement. Learning goals. 1. Understanding the two sources of fund procurement 2. Mastering the accounting method of the invested capital and the borrowed capital

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Unit Two Accounting Method of Fund Procurement

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  1. Unit Two Accounting Method of Fund Procurement

  2. Learning goals 1. Understanding the two sources of fund procurement 2. Mastering the accounting method of the invested capital and the borrowed capital 3. Catching on to the qualitative differentiation between the invested capital and the borrowed capital 4. Improving the learning efficiency by using contrast method

  3. Case A Ming and A Hua have reached the agreement that each of them invested RMB 10,000 and have signed written partnership agreement. RMB 20,000 was not enough for them so they applied for petty loan from bank. They got RMB 10,000 from bank and the loan should be repaid in two years with the annual rate of 9%. Up to now, they have already handed in RMB 20,000 at their cost and the petty loan RMB 10,000 from the bank has arrived.

  4. 理论知识 企业(corporation)筹集资金(fund)的渠道主要有两种，一种是企业所有者投入的资金，它形成企业的永久性资本(permanent capital)，投资人(investor)投入资金的目的是分享企业的收益(income)，所以，会计上称之为所有者权益(owner’s equity)。另一种是企业向债权人(creditor)借入的资金，会计上称之为负债(liability)。这部分资金有明确的还本付息期限(maturity to pay back principal and interest)，当债务到期时，企业应立即归还，如不能按时归还，有可能面临法律诉讼。

  5. Differences between the Invested Capital and the Borrowed Capital

  6. Module One Accounting Method of Invested Capital

  7. We have already invested RMB 10,000 individually so our monetary assets have increased RMB 20,000 for our shop. The account should show the increase of the bank deposit for RMB 20,000 and state our ownership of these assets. Thus, the entry would be: Dr.: Bank deposit20，000 Cr.： Paid-up capital — A Ming 10,000 — A Hua10,000

  8. 理论知识 实收资本(paid-up capital)是企业接受投资者投入的资本(capital received by the company which is paid by investors)。 投入货币资金业务(invested currency fund)涉及的原始凭证(original voucher)有银行进账单、回单联和出资证明。会计人员要根据审核无误的原始凭证编写收款凭证，分别登记到“银行存款(bank deposit)”账户和“实收资本(paid-up capital)”账户中。

  9. 知识链接 国家相关法律规定，设立企业必须有法定的资本金。它是保证企业正常经营的必要条件，是企业承担经营风险的保障。 资本金是由投资者认缴的，并经工商行政管理部门核准的投资总额。所有者投入资本金后，一般情况下不允许抽回。投资者可以用现金、机器、原材料等多种形式投资，符合国家有关规定比例的，还可以用无形资产投资。

  10. A Hua: How to make account if we receive some equipment or material as the investment instead of cash? A Ming: It is similar to the cash account. We only need change the debit side to “fixed assets” or “raw materials”.

  11. —May I ask how to make account if we receive donated fund? —You’re kidding? But if so, it is easy. This kind of fund belongs to the investor, categorized into the owner’s equity. Because this kind of fund is donation instead of being paid by investors, we should book in the capital reserves. Extension

  12. Accounting Terms Capital Reserves 银行存款 Fixed Assets 实收资本 Raw Materials 资本公积 Bank Deposit 留存收益 Retained Earnings 固定资产 Paid up Capital 原材料

  13. Listen to the tape and fill in the following blanks A Ming: What do you know is now? A Hua: Yes. Actually, the paid-up capital refers to the money or stuff invested into the companies by investors, different from the borrowed capital. A Ming: Would you like to explain? A Hua: For example, the borrowed money needs to be returned, no matter whether you will or in the following businesses. In addition, you need not only return the principal but also . However, the invested capital doesn’t need to be returned and at the same time, the investors have the authority to share the profits of the company. Am I right? A Ming: Well explained. the paid-up capital lose money earn profits the interest

  14. Module Two Accounting Method of Borrowed Capital

  15. A Ming: The RMB 10,000 from the bank was the borrowed capital. Generally speaking, we should return not only the principal but also the interest. In accounting, we should set accounts such as “short-term loan” ,“long-term loan” ,“ financial expenses” and so on. Did you remember how to distinguish the short-term and long-term loan? A Hua: Yes, of course. It depends on time to return the loan. The short-term loan needs to be returned in one year and the long-term loan can be returned over one year. Can you tell me how to make account? A Ming: We have got a loan of RMB 10,000 from bank and will return in two years. The RMB 10,000 increased our capital and it also becomes the debt of our shop .Thus, the entry would be Dr.：Bank deposit 10,000 Cr.：Long-term loan10,000

  16. 理论知识 企业在经营过程中，为了解决周转资金(circulating fund)困难的问题，还可以向银行(bank)或其他金融机构(other financial institutions)借款。企业借款，按偿还时间的长短，分为短期借款和长期借款。企业借入的款项，必须按规定程序办理手续，支付利息，到期归还本金。在会计核算中，应设置“短期借款(short-term loan)”账户和“长期借款(long-term loan)”账户。 取得借款业务相关的原始凭证主要有借款申请书(loan applicant)和借款合同书(loan agreement)，还有银行开具的借款凭证(loan note)。会计人员要根据审核无误的原始凭证编制收款凭证，分别登记“银行存款(bank deposit)”“短期借款(short-term loan)”“长期借款(long-term loan)”账户。

  17. 知识链接 短期借款一般是补充企业生产经营的流动资金，是企业一项流动负债。长期借款一般用于固定资产的购建、改扩建工程、大修理工程以及流动资产的正常需要等方面，是企业的一项长期负债。借款利息的支付方式由债权人和债务人事先约定，有分期（月、季、半年）支付，还有到期随本金一次支付。

  18. Accounting Terms Financial Expenses 短期借款 Short-term Loan 长期借款 Long-term Loan 财务费用

  19. Listen to the tape and fill in the following blanks A Hua: We don’t need to any more after we return your dad the amount we borrowed, do we? A Ming: No, you are wrong. To make our ice-cream shop bigger, we need more money. We can borrow the money from afterwards. A Hua: It will be a big burden for us to borrow money from the bank because we have to pay . A Ming: It is important for to get loans from the bank. Don’t you know the meaning of “borrowed hens lay eggs”? borrow money the bank the interest a company

  20. Answer the following questions Can you tell the difference between the invested capital and the borrowed capital? Gap filling • 1. There are two sources of fund procurement, one is and the other is . • The original vouchers related with the invested currency fund operation are and . • 3. Investors can invest in many ways like , ,and .can be used if the proportion stipulated is matched. • 4. The loan can be divided into and according to the maturity.

  21. practice 1. Hongda company has received investments from A, B, C three shareholders. A invested monetary assets of RMB 40,000; B invested with a patent worth RMB 20,000; C launched into an equipment with the value of RMB 15,000. Please make the entry. 2. Hongda company got a six-month loan of RMB 20,000 from Industrial and Commercial Bank of China and a three-year loan of RMB 100,000 from Agricultural Bank of China. Both the amount has been deposited into the bank. Please make the entry.

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