The stability of development and economic efficiency of functioning enterprise depends on the rational management of its assets, among which have a special place in current assets

Table 2

Examples of transactions used with material-production stocks account³

	№		Correspondence
		Contents of the business transaction	of accounts
			Debit	Credit
	1	The purchase price of materials for the amount	1010	6010
		without VAT is reflected
	2	Materials produced in the organization at actual cost	1010	2310
	3	Waste from main production was disposed of
	4	Receipt of materials as a contribution to the authorized capital, in the valuation at the agreed cost	1010	4610
	5	Materials left after dismantling of rejected products are disposed	1010	2610
	6	The acquired materials on accounting prices were	1010	1510
		accepted for accounting
	7	Over expenditure on acquisition of inventories is reflected	1610	1510
	8	Materials in the accounting valuation were used	1010	1510
	9	Purchased materials are transferred to production	2010	1010
	10	The difference between the actual cost price and the accounting price of materials is written off	2010	1610

Material production stocks are written off from the balance of the organization as a result:

• 
  realization;
  
• 
  transfers in the form of a constituent contribution to the charter capital of another organization;
  
• 
  return to the founder of the deposit previously paid into the charter capital of the organization, when he leaves the structure of the founders or when the property of the liquidated economic entity is distributed among its participants;
  
• 
  free transfer;
  
• 
  exchange;
  
• 
  definition of shortage, loss or damage;
  

• 
  liquidation (destruction) on the grounds of impairment after the expiration of the storage period, due to physical, and material obsolescence;
  
• 
  provision of a commodity loan or return of a previously received commodity loan;
  
• 
  other operations and events.
  

According to Art. 11 of Law № 279-I “On Accounting” to ensure the correctness of accounting data and financial statements, organizations are obliged to pass inventory of material production stocks, during which their actual condition and assessment are verified and documented. The objects, order and timing of the inventory of material and productionreserves are determined by NAS №19 "Organization and implementation of inventory" approved by the Ministry of Finance of the Republic of Uzbekistan. № 833 of November 2, 1999.⁴

The productioncosts of products and their sale, the performance of work, the provision of services represent a valuation of the products used in the production process, the performance of work and the provision of raw materials, materials, fuel, energy, natural resources and other costs for the manufacture of products, performance of work, rendering services, to manage directly the production and organization as a whole, the sale of products.

Production cost refers to the cost incurred by a business when manufacturing a good or providing a service. Production costs include a variety of expenses including, but not limited to, labor, raw materials, consumable manufacturing supplies and general overhead. Additionally, any taxes levied by the government or royalties owed by natural resource extracting companies are also considered production costs.

Also referred to as the cost of production, production costs include expenditures relating to the manufacturing or creation of goods or services. For a cost to qualify as a production cost it must be directly tied to the generation of revenue for the company. Manufacturers experience product costs relating to both the materials required to create an item as well as the labor need to create it.

Service industries experience production costs in regards to the labor required to provide the service as well as any materials costs involved in providing the aforementioned service.
In production, there are direct costs and indirect costs. For example, direct costs for manufacturing an automobile are materials such as the plastic and metal materials used as well as the labor required to produce the finished product. Indirect costs include overhead such as rent, administrative salaries or utility expenses.
In the practice of production accounting of enterprises historically the first direction of activity prevailed - the calculation of the cost of production.

The costs that constitute the production cost of products (works, services) are grouped according to their economic content by the following element:

• 
  production material costs (minus the cost of returnable waste);
  
• 
  labor costs for production;
  
• 
  deductions for the payment of social insurance related to the production;
  
• 
  other production costs.
  

Formation of information on expenses for ordinary activities is maintained on accounts 2010, 2310, 2510, 3110 of the Chart of accounts approved by the order of the Ministry of Finance of the Republic of Uzbekistan. оn 09.09.2002 №103.

The main tasks of accounting for production costs are:

• 
  timely, complete and reliable reflection of actual costs associated with the production of products;
  
• 
  accurate calculation of the cost of goods (works and services);
  
• 
  identification of unproductive expenses and losses allowed on the site of production;
  
• 
  control over the rational use of raw materials, materials, fuel-processing fees and other costs, compliance with progressive norms of expenditure of resources and cost estimates for management and maintenance of production;
  

• 
  verification of the implementation of plans at cost and identification of reserves for further cost reduction;
  

• 
  identification of the results of production activities, both in the whole organization and its units;
  

Table 3

	Examples of transactions used with Production cost account^5
№	Contents of the business transaction	Correspondence of
		accounts
		Debit		Credit
1	Materials written off for production are written off	2010		1010
2	Transferred to further processing of semi-finished	2010		2110
	products of own production
3	Included in the cost of products (works, services) are	2010		2310
	the costs of auxiliary (maintenance) production			(2710)
4	Considered in the costs of the main production cost,	2010		6010
	performed by an outside organization			6990
5	Wages paid to the employees of the main production	2010		6710
6	Actual expenses related to production	1010		1510

The accounting of production costs is provided in accordance with the Regulations approved by the Ministry of Finance of the Republic of Uzbekistan on February 05, 1999 №54 “On the composition of costs for the production and sale of products (works, services) and on the procedure for the formation of financial results” (amendments to the Resolution of the President of the Republic of Uzbekistan dated 27.12.2005 No. PP-244), accounting for costs associated with the implementation of normal activities.

Finished goods, are inventory items unique to manufacturers. As retailers purchase their inventory in completed form, there’s no need to categorize or segment their inventory. Goods and products that have been purchased ready for sale are known as merchandise.

Items purchased as “raw materials” are used to produce finished goods. If the product is only partially completed, it is called “work in process”. Once the product no longer requires processing and is ready to be consumed or distributed, it becomes “finished goods”.

However, finished goods is a relative term, and a seller’s finished goods may become a buyer’s raw materials. For example, a flour mill produces flour; they purchase grains as raw materials which are ground and packaged, then sold to bakeries as finished goods. For the bakeries, the flour is a raw material used to produce their finished goods, bread and cakes.

The finished goods inventory is recorded on a company’s income statement as a short-term or current asset, as it is assumed that the finished goods will be sold within a year.

At the end of the accounting period, the finished goods inventory is usually combined with raw materials and work in process under one single “Inventory” line on a company’s balance sheet.

Finished goods will often undergo a markup, meaning that the price for which they are sold is increased from the original purchase price. Markup amounts can differ, but it is not uncommon for markups to be around 50% more than the price of the original manufacturer.

Finished goods, as a rule, should be surrendered to the warehouse of finished goods, exceptions are allowed for large-sized articles and other goods, the delivery of which is difficult for technical reasons. They can be taken by the representative of the buyer (customer) at place of manufacture, assembly or shipped directly from these places.

Normative regulation of accounting for finished goods is the Law “On Accounting”, NAS №4 “Material production stocks”, approved by the Order of the Ministry of Finance of the Republic of Uzbekistan on June 15, 2006 №52, as well as regulatory and legal acts of the Republic of Uzbekistan regulating accounting issues in Uzbekistan on 4 levels.

The data of analytical and synthetic accounting of finished products must ensure that the necessary data are obtained for the preparation of financial reports.

The main tasks of accounting for finished goods are:

• 
  formation of the actual cost price of finished goods;
  
• 
  correct and timely documenting of transactions and ensuring reliable data on the production of finished products;
  
• 
  control over the safety of stocks of finished products in their places of storage and at all stages of their movement.
  

For accounting the availability and movement of finished goods, Active Account 2810 “Finished Products” is intended.

The funds of the organization are accounted for in the active synthetic account 5110 "Settlement account".This account is designed to summarize information on the availability and flow of funds in the currency of the Republic of Uzbekistan on the settlement accounts of the organization opened with credit institutions. There are given some transactions which reflects settlement account correspondence with other accounts respectively:

Table 4

Examples of transaction used with cash accounts⁶

№	Contents of the business transaction	Correspondence
		of accounts
		Debit	credit
1	Received cash from your checking account	5010	5110
2	The remainder of the advance was paid to accountable persons	5010	4200
3	Debt for shortages, waste and theft	5010	4730
4	Wages, allowances, bonuses paid	6710	5010
5	The shares of the enterprise were bought out	8610	5010
6	Issued on performance lists deposited wages	6720	5010
7	Paid for tangibles and services provided	3190	5010
8	The amount of shortage found during the inventory	5910	5010
9	Short-term loans (loans) in cash	5010	6810
10	Cash withdrawn from the current account	5010	5110

3.Foreign experience for establishment of current assets` financing sources
Sources of current assets formation are own (internal sources), borrowed and attracted financial resources (external sources of financing).

Own sources: statutory, additional and reserve capital, reserve funds, retained earnings, accumulation funds and social funds, targeted financing and budget revenues, from sector to inter branch extra-budgetary funds.

Borrowing sources: long-term and short-term loans of banks, commercial loans, investment tax credit, investment contribution of employees.

Attracted sources: accounts payable (suppliers and contractors, labor remuneration, insurance, budget, other creditors), consumption funds, reserves of future expenses and payments, provisions for bad debts, other short-term liabilities, charitable and other receipts.

In order to reduce the need for working capital and increase the efficiency of their use, with insufficient (no) profits or delay payments from customers, the enterprise can use external sources - long-term and short-term loans, loans, funds from securities issue, accounts payable.

The main directions of attracting loans for the financing current assets: the crediting of seasonal stocks of raw materials, materials and costs associated with the seasonality of the production process; temporary replenishment of the shortage of own current assets.

Turnover of current assets is provided through a short-term loan. Historically, credit institutions issued short-term loans to enterprises with a view to temporarily replenishing their working capital. Until the end of the Second World War, self-liquidating loans used for the purchase of inventory and finished goods intended for sale were the main form of lending to firms. Lending began directly at the time of the need for cash for the purchase of inventory. Loans were repaid to the accounts of enterprises in cash within 60-90 days after the beginning of lending. With their terms, these loans resemble today's overdraft lending.

Currently, in foreign countries, among the total volume of loans to enterprises, short-term loans account for more than 50%. Loans for working capital are mainly secured by pledge of inventory and receivables.

Among short-term loans, one can identify the most common payment and settlement loans, differing from each other purpose, the object of lending and the type of borrower (buyer or seller).

When receiving payment loans, the buyer enterprise uses credit resources to pay for purchased material resources, pay off the debit balance by offsetting mutual claims, and pay wages. Settlement loans are given to the supplier enterprise to cover the needs related to the diversion of funds into non-cash settlements.

The most common method, corresponding to the nature of the circulation of funds, is lending on the turnover of material values, when the loan is consistently participating at all stages of the circulation of resources in economic organizations.

Another method of lending is lending for the balance of material values, when the loan is issued for values that are at some stage of the circulation.

Depending on the relationship between different types of sources on formation of current assets of enterprises, the structure of working capital is changing. So, in the case of a sufficient number of own funds, including profits, enterprises can use them to replenish working capital. In this case, own working capital will be mainly in the most liquid form (cash, securities), which will ensure a more stable financial position of the enterprise.

If the enterprise extensively uses bank loans as a source of financing of current assets, it also improves the structure of the current assets and the financial position of the business entity (in the event that the interest rates are lower than the profitability of the total capital of enterprises).

Sources of inventory financing include own circulating assets, short-term bank loans and loans, settlements with creditors for commodity transactions. The ratio of the values of indicators of inventories, own working capital and sources of stock formation determines the type of financial stability of the economic entity.

1. 
   Absolute financial stability means that the enterprise for some reason does not use borrowed and raised funds for the development of production, which is rather a negative characteristic.
   
2. 
   Normal financial stability, if the enterprise uses to cover the reserves of all types of sources of funds. To assess the real financial stability of enterprises, it is necessary to study the structure and dynamics of sources of stock formation. In practice, for example, there are situations when an enterprise has a normal financial stability, which is mainly due to a high proportion of accounts payable among sources of stock formation. In this case, it is difficult to talk about the normal financial stability of an enterprise in the actual meaning of this concept.
   
3. 
   Unsustainable financial position when an enterprise uses additional sources that are not justified for the formation of inventories.
   
4. 
   Critical financial position when the enterprise has overdue loans, loans and accounts payable.
   

At foreign enterprises a certain system of settlements has been formed, characterized by the fact that payment for products by regular customers is usually carried out by credit on conditions that depend on a number of factors. In addition, in the economically developed countries, the "2/10 full 30" calculation scheme has become widespread. The latter means that the buyer receives a 2% discount when paying for the goods within ten days from the beginning of the moment of crediting (receiving the goods) and pays the full cost of the product if payment is made from the eleventh to the 30th day of the loan agreement. In case of violation of contractual obligations, the buyer is subject to penalty depending on the moment of payment.

In the world practice, when analyzing receivables, it is compared with accounts payable. An important point is also the analysis of the created reserves for bad debts. Uzbek companies have not yet accumulated sufficient experience in calculating the reserve, so we can take advantage of foreign experience. In developed countries, the reserve is charged in percentage in relation to the total amount of accounts receivable when reporting.

In general, to reduce accounts receivable, an enterprise can develop various types of contracts with flexible terms of payment (full or partial prepayment, transfer for sale, bank guarantee) and prices (discount system) for products:

• 
  improving cash management, which is based primarily on regulating the size of its own working capital and current financial needs;
  
• 
  use of short-term bank credit, factoring, forfeiting, commercial credit, loans, accounting of bills.
  

In the practice of foreign countries, enterprises use short-term financial resources to finance part of the current assets. First of all, they include commercial and bank loans, as well as deferred payments (to the budget and wages to employees).

Conclusion.
Especially in the context of competitive global financial conditions, when many enterprises are experiencing difficulties in fulfilling their obligations. Therefore, the system of accounting and analysis of current assets, along with planning, rationing and taking into account, includes a regular analysis of their composition, dynamics, compliance with the needs of current production and economic activities.

Effective accounting of current assets plays an important role in ensuring the normal operation of the enterprise, increasing the level of profitability of production and depends on many factors. In modern conditions, a significant negative impact on the change in the efficiency of management of current assets and the slowing of their turnover are factors of the crisis state of the economy.

When studying the term current assets according to the definitions of scientists and the regulatory framework that best reflects this concept, it was chosen that "Current assets are assets that can be converted into cash in one production cycle or one year".

The main objectives of accounting for current assets, which are:

1. 
   timely and correct documentation of current assets accounts transactions;
   
2. 
   control over correct and timely stock counting of current assets in the organization;
   
3. 
   control over compliance with the circulation period and speed of the current assets of the organization;
   
4. 
   timely reconciliation of settlements with debtors and creditors to eliminate overdue debts.
   

The success of solving such problems directly influences the financial condition of the enterprise and the providing profitability of the business performance of the organization.

According to world experience, the specific weight of borrowed funds, including those formed with the help of the forms of short-term financing discussed above, is quite high in the firms' balances, which indicates the desire of enterprises to maximize profits to attract investors. In general, when forming current assets at the expense of certain sources, foreign enterprises are mainly oriented toward the level of debt servicing costs. Current assets are cash advances to circulating production assets and circulation funds. According to economic scientists and other authors, the most important indicators of the use of current assets in the enterprise are the turnover ratio of circulating assets and the duration of one turnover.

Reference list.

1. 
   I.A Karimov Report at the government meeting on the results of socio-economic development of the country in 2014 and the most important priorities for 2015. Vol.: Uzbekistan, 2015-48 p.
   
2. 
   SH.M. Mirziyoyev “Tanqidiy tahlil, qat`iy tartib-intizom va shaxsiy javobgarlik – har bir rahbar faoliyatining kundalik qoidasi bo`lmog`i kerak”, T.: - “Uzbekiston”, 2017 y., 124 b
   
3. 
   A.V. Vahobov “Moliyaviy va boshqaruv tahlili”. - Vol.: IQTISOD-MOLIYA, 2013 – 210 b.
   
4. 
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5. 
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6. 
   A.R. Sativaldiev “Moliyaviy va boshqaruv buxgalteriya hisobi”,
   
7. 
   A.N. Bogatko, Bases of the economic analysis of the managing assets. –
   

Moscow: Finance and Statistics- 2005 y., 412 p.

8. 
   V.V. Kovalev “Analysis of the economic activity of the enterprise”-Moscow-2016 y., 219 p.
   
9. 
   M. Z. Fredrick “Financial and Management Accounting”-4th edition, Person Education Limited, 2015-y. 468 p.
   
10. 
    "Financial Accounting 1" tutorial – Aprius, 2014 y., 192 p.
    
11. 
    http://www.lex.uz( Мinistry of Justice)
    
12. 
    http://www.gov.uz - (news of the government of Uzbekistan)
    

1^ O`zbekiston Respublikasi Prezidentining “2017-2021 yillarda O`zbekiston Respublikasini rivojlantirishning beshta ustuvor yo`nalishlari bo`yicha harakatlar strategiyasi” №PF-4947, 07.02.2018 y.

2^ Bogatko, A.N. Bases of the economic analysis of the managing assets. - Moscow: Finance and Statistics, 2014. 412 p.

3^ Compiled by author based on information “Бухгалтерский учет”, Sh.T. Ergashevа, Moliya-Iqtisod- 2010 y., 213 p.

4^ http://lex.uz/docs/90762

5^ Compiled by author based on information “Бухгалтерский учет”, Sh.T. Ergashevа, Moliya-Iqtisod- 2010 y., 274 p.

6^ Compiled by author based on information “Бухгалтерский учет”, Sh.T. Ergashevа, Moliya Iqtisod- 2010 y.,274 p.