1 ACCOUNTING FOR SALES AND EVALUATING BUSINESS RESULTS AT MAI DUONG 38 TRADING JOINT STOCK

Sale accounting and determining business results...9 1.2.4.Accounting books are used for accounting for sale and evaluating business results and to present information on financial state

“ACCOUNTING FOR SALES AND EVALUATING BUSINESS

RESULTS AT MAI DUONG 38 TRADING JOINT STOCK”

Student code : 17523403010168 Supervisor : PhD.Bui Thi Hang

Hanoi - 2021

I hereby declare that this thesis is my own work and effort that has not beensubmitted anywhere for any award Where other sources of information have beenused, they have been acknowledged

The data and results described in the thesis are derived from the actualsituation of the practice company

Hanoi, May, 2021

Student

TRAN THI THU

TABLE OF CONTENT

DECLARATION i

TABLE OF CONTENT ii

Figure 2.1:Managing system of the Mai Duong 38., JSC company ix

PREAMBLE 1

CHAPTER 1 4

BASIC THEORETICAL ISSUES OF SALES ACCOUNTING AND DETERMINATION OF BUSINESS RESULTS 4

1.1 General overview of sales accounting and determining business results 4

1.1.1 Sales definition 4

1.1.2 The definition of business results 4

1.1.3 The relationship between sales and determination of business results 5

1.1.4.Accounting requirements for sales and dertermining business results 5

1.1.5 The roles of sales accounting and determining business results 6

1.1.6 Sale accounting’duties and determining business results 6

1.2 Basic content of sales accounting and determing business results 7

1.2.1 Sale methods 7

1.2.2 Payment method 8

1.2.3 Sale accounting and determining business results 9

1.2.4.Accounting books are used for accounting for sale and evaluating business results and to present information on financial statements 32

1.2.4.1.Accounting books are used for accounting for sale and evaluating business results 32

In each enterprise, each form of accounting book has specific regulations on the number, structure, form, order, recording method and relationship between accounting books Depending on the size and characteristics of each enterprise's business activities, it is necessary to choose an appropriate accounting form, but still have to comply with the regulations of the applicable circular 32

*General Journal Form 32

- Basic features: All arising economic and financial transactions must be recorded in the Journal, with the focus being on the General Journal, in the chronological order of arising and according to the economic content (accounting clauses) of the Company major Then take data on the Journal books to record in the ledger according to each arising transaction 32

-General Journal Form includes the following types of books: 32

+ General Journal 32

+ Accounting Ledger 32

+ Detailed accounting books and cards; 32

*Journal-Ledger form 32

-Basic features: All arising economic transactions reflected on accounting vouchers are recorded in the only general accounting book, which is the Journal - the ledger in chronological order Based on the Journal - ledger is the accounting vouchers or the Summary of accounting vouchers of the same type 32

-Journal-Ledger form includes the following types of books: 32

+ Journal-Ledger 32

+ Cash book 32

+ The same Summary of documents 32

+ Advanced composite panel 32

*The form of recording vouchers: 32 -Basic features: The direct basis for recording general accounting books

Bookkeeping Documents) and accompanied by accounting vouchers, which must be approved by the chief accountant before making

accounting entries 33

-The form of recording vouchers includes the following types of books: 33

+ Recording vouchers; Register of book-keeping vouchers; 33

+ Detailed accounting books and cards; 33

*Document diary form: 33

-Basic features: 33

+ Gather and systematize the economic transactions arising under the Credit side of the accounts combined with the analysis of those economic transactions according to the Debit counterpart accounts 33

+ Closely combine the recording of economic transactions arising in chronological order with the systematization of transactions according to economic content (by account) 33

+ Combine widely general accounting with detailed accounting on the same accounting book and in the same recording process 33

+ Using pre-printed book templates for controlling accounts, economic and financial management indicators and making financial statements (forms of accounting entries) 33

-Document diary form includes the following types of books : 33

+ Document dỉay 33

+ List table 33

+ Accounting ledger 34

+Detailed accounting books or cards; 34

1.2.4.2 Present information on financial statements 34

* On Accounting balance sheet: 34

-Acc 111,112 is shown on the cash and cash equivement 34

- Acc 156 is shown on Inventrories 34

- Acc 131 is shown on Current trade receivables 34

- Acc 133 is shown on Deduction VAT 34

-Acc 331 is shown on the Current trade payables 34

- Acc 333 is shown on the Taxes and payables to the State 34

* On the the business results report : 34

1.2.5.Accounting for sales and determining business results in terms of applying software with pre-set programs 34

CONCLUSION CHAPTER 1 37

CHAPTER 2:THE CURRENT SITUATION OF SALES ACCOUNTING AND DETERMINATION OF BUSINESS RESULTS AT MAIDUONG 38 TRADING JOINT STOCK COMPANY 38

2.1 Overview of Mai Duong 38 Trading Joint Stock 38

2.1.1 The process of information and development of Mai Duong 38 Trading Joint Stock Company 38

2.1.2 Business organization characteristic at the company 39

2.1.3 Organizational and managerial charateristic at the company 39

Figure 2.1:Managing system of the Mai Duong 38., JSC company 39

2.1.4 Characreristic of the organization of the accounting work at the company 40

2.2 Accounting For sales and determination of business results at Mai Duong 38.,JSC 48

2.2.1 Method of sale and types of goods 48

2.2.2 Principles of goods valuation 50

2.2.3 Accounting for sales and determination of business results at Mai Duong 38.,JSC 51

2.3 Evaluation of sales accounting and determination of business results at Mai Duong 38 ,JSC 99

3.1.2 Principles of completing accounting for sales and evaluating

business results 104

3.2 Some recommendations to improve the accounting of sale and evaluating business result at Mai Duong 38., JSC 105

3.3 Conditions for implementing the solution 121

CONCLUDE 123

REFERENCES 125

FIFO- Fist- in First-out

Mai Duong 38.,JSC- Mai Duong 38 Trading Joint Stock Company VAT- Value Added Tax

LIST OF DIAGRAM

Flowchart 1 - Accounting for COGS in the perpetual inventory methodFlowchart 2 - Accounting for COGS in the periodical inventorymethod

Flowchart 3 – Accounting entry for sales, service provision calculated VAT by deduction method

Flowchart 4: Accounting entry for revenue deductions Flowchart 5:Accounting entry for selling expenses Flowchart 6:Accounting entry for administrative expenses Flowchart 7– Accounting entry for other income

Flowchart 8– Accounting entry for other expenses

Flowchart 9– Accounting entry for financial income.Flowchart 10– Accounting entry for financial expenses Flowchart 11– Accounting entry for corporate income tax Flowchart 12– Accounting entry for business results

LIST OF FIGURES –DOCUMENTARY

Figure 2.1:Managing system of the Mai Duong 38., JSC company

Figure 2.2: The organizational chart of the accounting appartment at Mai Duong38.,JSC

Figure 2.3: Display screen “ FPT E-invoices”- “Mai Duong 38.,JSC”source

Figure 2.4: Accounting process on Misa.2017 software

Figure 2.5 Display screen “ MISA.2017”- “Mai Duong 38.,JSC”source

Figure 2.6: Code the goods- “Mai Duong 38.,JSC”source

Figure 2.7: List of materials and goods - “Mai Duong 38.,JSC”source

Figure 2.8: VAT invoice No.0000092 - “Mai Duong 38.,JSC”source

Figure2.9: Delivery note No.BH00354 - “Mai Duong 38.,JSC”source

Figure 2.10: Input screen- “Mai Duong 38.,JSC”source

Figure2.11: The Detail book of Account 5111- “Mai Duong 38.,JSC”source

Figure 2.12: The Ledger of Acc.511- “Mai Duong 38.,JSC” source

Figure 2.13: The Detail book of Account 131- “Mai Duong 38.,JSC”source

Figure 2.14: The Ledger of Account 3331- “Mai Duong 38.,JSC”source

Figure 2.15: The Credit note- “Mai Duong 38.,JSC”source

Figure 2.16: The Input screen- “Mai Duong 38.,JSC”source

Figure2.17: The Ledger of Account 112 in 2020- “Mai Duong 38.,JSC”sourceFigure 2.18: The screen caculates the cost of goods sold- “Mai Duong38.,JSC”source

Figure 2.27: The Leger of Ac.6421 in 2020- “Mai Duong 38.,JSC”source

Figure 2.28: The VAT invoice in 2020- “Mai Duong 38.,JSC”source

Figure2.29: The Input screen of adminnistrative expenses in 2020-“MaiDuong 38.,JSC”source

Figure 2.30: The Ledger of Ac.6422 in 2020-“MaiDuong 38., JSC”source

Figure 2.31: The Detail book of Ac.331-Nguyen Hoang Joint Stock Company in2020-“MaiDuong 38., JSC”source

Figure 2.32: The Input screen of Ac.515 in 2020-“MaiDuong 38., JSC”source Figure2.33: The Ledger of Ac.515 in 2020-“MaiDuong 38., JSC”source

Figure 2.34: The Tranfering screen in 2020-“MaiDuong 38., JSC”source

Figure 2.35: The Ledger of Acc.911 in 2020-“MaiDuong 38., JSC”source

Figure2.36: The Ledger of Acc.4212 in 2020-“MaiDuong 38., JSC”source

Figure 2.37: The General journal in 2020-“MaiDuong 38., JSC”source

Figure 2.38: The screen of Financial statemen on HTKK Software t in2020-“MaiDuong 38., JSC”source

Figure 2.39: The Icome Statement in 2020-“MaiDuong 38., JSC”source

1 The urgency of the topic

Our country is transforming in a period of renewal, fields of life economy society are gradually being improved In the near few years, our country has gone

-up with quite obvious results, the relatively fast economic growth rate is operatedunder the market mechanism under the management of the State and the life Thepeople are gradually improved and enhanced Along with the innovation process,the first issue is how to best the profitability of the business, to know that, theaccounting department of the business must determine the profitability of thebusiness Therefore, in order to quickly and accurately determine the realized profit

in the period, it requires that the accounting work must be complete and timely.Therefore, accounting for sales and evaluating business results is a very importantjob in the accounting system of the business All activities, all transactions arising inthe enterprise are recorded to determine the business results

Currently, information about business results is very important because onthis basis, managers can know whether their business processes are effective or not.From there, they will make decisions regarding development orientation in thefuture

Therefore, it is required that economists, entrepreneurs, companies with aprofessional accounting system must be flexible, dynamic, have been highprofessional qualifications to lead the business to operate effectivily Enterprisesmust know to make full use of their abilities and strength to always master every

Accounting is an important component of the system of economic andfinancial management tools It provides all information about the economic andfinancial activities of the business to help business leaders operate and manage theoperation of the rule with high efficiency Accounting for determining businessresults is one of the important tasks of accountants to help enterprises grasp theefficiency of their business operations At the same time, it will bring benefits inorganizing, operating and managing all production and business activities of theenterprise in the future.

Indeed, in order to see the importance of the accounting system in generaland sales accounting and to determine the business results in particular, I havechosen the topic for my graduate thesis is “Accounting for sales and evaluatingbusiness results at Mai Duong 38 Trading Joint Stock Company”

2 Research purposes

Firstly: systematize the theoretical issues of sales accounting and determinebusiness results in the business

Secondly: find out the current status of sales accounting and determine

business results at Mai Duong 38 Trading Joint Stock Company.

Finnally: propose some solutions to improve sales accounting and determine

business results at Mai Duong 38 Trading Joint Stock Company.

3 Object and scope of the study

Sales accounting and determination of business results at Mai Duong TradingJoint Stock Company 38 in the fourth quarter of 2020

4 Research Methodology

To complete this topic, I used the following research methods:

- Research method, refer to documents: Read, refer, learn the textbookscompiled by lecturers to teach; books in the library and learning resource center as abasis for the research topic

- Interview method: Used during the internship, help me answer my questionsand understand better about sales accounting and determine business results at thecompany, thereby also help me accumulate practical experience for myself

- Data collection and processing method: It is applied to collect raw data ofthe company, then all raw data is processed and selected to be accurately,scientifically and included in the topic to give readers the most effectiveinformation.

- Statistical method: Based on the statistical data to analyze, compare,compare, and then point out the advantages and disadvantages in production andbusiness to find the causes and solutions for the company in general and for thesales accounting and to determine the business results in particular

5 Main structure of the thesis

In addition to the introduction and conclusion, my topic has 3 chapters:

CHAPTER 1: BASIC THEORETICAL ISSUES OF SALES ACCOUNTING AND DETERMINATION OF BUSINESS RESULTS

CHAPTER 2: THE CURRENT SITUATION OF SALES ACCOUNTING AND DETERMINATION OF BUSINESS RESULTS AT MAI DUONG 38 TRADING JOINT STOCK.

CHAPTER 3: SOME COMMENTS OF FINISHING SALES ACCOUNTING AND EVALUATING BUSINESS RESULTS AT MAI DUONG 38., JSC

However, due to the limited level of reasoning and practical access, my topic

is inevitable I look forward to receiving comments from the teachers, so that mytopic will be improved

CHAPTER 1 BASIC THEORETICAL ISSUES OF SALES ACCOUNTING AND

DETERMINATION OF BUSINESS RESULTS 1.1 General overview of sales accounting and determining business results

1.1.1 Sales definition

Selling is the transfer of ownership of goods to customers, an enterprise thatearns money or is entitled to collect money or to collect another kind of goods ofequivalent value and generates sales of goods.Selling must satisfy the followingconditions:

(1)Goods must go through a process of buying, selling and paying by acertain method

(2) The goods must have the right to transfer ownership from the seller to thecustomer who has paid or accepted payment to the seller

(3) The goods to be sold must be part of the business plan of the enterprise,which the enterprise purchases to process and then sell

1.1.2 The definition of business results

The concept of revenue according to VAS standard 14 "Turnover and otherincome are the total value of economic benefits of the enterprise earned in theaccounting period, arising from normal production and business activities and otheractivities of the enterprise, contributing to increasing equity, excluding capital ofshareholders or owners ”

Revenue, also called a sale, is an increase in equity related to the sale of aproduct or service that earned income In other words, revenue is income earned bythe company from its business activities

According to accounting standard No 14, revenue types are classified asfollows:

Classification of revenue by content, revenue includes:

-Sales revenue: is the revenue from the sale of products that enterprisesproduce, sales of purchased goods and sale of investment properties

-Turnover from service provision: is the turnover from the performance ofagreed work under a contract in one or more accounting periods such as theprovision of transport, consulting service, tourism and fixed asset leasing services

by the mode of leasing work, etc

-Internal sales turnover: is the turnover of the number of products, goods andservices consumed within the enterprise, which is the economic benefit from thesale of goods, products and provision of internal services among dependent units ofdependent cost-accounting units of the same company, the corporation shallcalculate the internal selling price

-Revenue from financial activities: is the revenue from interests, royalties,dividends, divided profits and other financial activities of the enterprise

Expenses are decreases in economic benefits during the accounting period in the form of outflows, asset deductions or arising in the period leading to a decrease

in equity, excluding owner distribution clause

Business results are the remaining income after deducting all costs Businessresults are the ultimate goal of businesses, it depends on the size and quality of thebusiness process

1.1.3 The relationship between sales and determination of business results

Selling is the last stage of the business process of an enterprise and alsodetermines the business results as an important basis for the unit to decide whether

to consume goods or not Therefore it can be said that there is a close relationship

between sales and business results determination Selling results is the ultimate goal

management of plans and implementation of consumption plans for each period,each customer, each economic contract

1.1.5 The roles of sales accounting and determining business results

Sales and business results play an important role not only for the business,but also for the whole national economy For the business, only when its productsare sold, it will have income to cover the expenses spent, facilitating the expansion

of business activities, improving the lives of workers, creating a source ofaccumulation for the national economy Accurate determination of sales results isthe basis for accurately determining the operational efficiency of enterprises for thestate through paying taxes, fees and charges into the state budget, determining thecost an economic benefits: State, groups and individual employees

1.1.6 Sale accounting’duties and determining business results

Today, in commercial enterprises, accounting in general and sales accounting

in particular have helped enterprises and state agencies to evaluate the completion

of the plans on cost of goods, costs and profits thereby overcoming theshortcomings and limitations in management The rational organization andarrangement between stages in the sales process will create favorable conditions forsales accounting and determine business results, and at the same time create a unity

in the general accounting system of the business In order to promote the role of theaccountant in the management of production and business activities, salesaccountants need to well perform the following tasks:

- To reflect and supervise in time and in detail the volume of purchased andsold goods and services, and in stock in both quantity, quality and value Tocorrectly calculate cost of goods and services provided, cost of sale, cost of businessadministration and other costs to determine business results

-Check and supervise the implementation of the sales plan targets, the salesturnover of the units, the situation of payment of goods and tax payment with theState

- Reflect sales revenue to determine sales results timely, urge, inspect, ensurethe full and timely collection of sales money, avoid misappropriation of capital

- Provide accurate and truthful information, make full and timely settlement toproperly evaluate business efficiency as well as the performance of obligations to theState.

Good performance of the above tasks is very important to the strict management

of goods and sales results In order to perform these tasks well, accountants need to have

a firm grasp of the content of the organization of the accounting work at the same timeneed to ensure some of the following requirements:

- Determine when goods are considered sold in order to promptly make a salereport and determine the sale results Report regularly and promptly the sales andpayment situation to customers in order to closely monitor sold goods in quantity andtypes

- Organize the original voucher system and the situation of scientific voucherrotation reasonably, avoid duplication or omission, not too complicated, but still ensuremanagement requirements, improve the efficiency of accounting work The unitchooses the form of accounting books to promote its strengths and suitability to itsbusiness characteristics

- Identify and fully assemble the costs incurred in the stages

1.2 Basic content of sales accounting and determing business results.

+ Direct shipping wholesale in the form of consignment: A form of sale inwhich the seller transports goods from the point of receipt to the place of the buyerunder the contract by means of self-owned or outsourced transport.

b.Retail method

Retail sales of goods are selling directly to consumers Retail sales usuallysell in small volumes with stable prices and often include sales methods such asdirect cash sales, centralized cash sales, self-service sales, and telephone sales ,over the internet, …

c Forms of sending to sale agents:

The commercial enterprise delivers the goods to the agent receiving facility.They receive goods and pay money to the commercial enterprise and then receive

an agent commission (goods owned by the commercial enterprise) Goods areconfirmed to be consumed when the enterprise receives the money to the paymentagent or accepts the payment

d Other methods:

.- Form of installment sale: the buyer pays the purchase in many installments.Commercial enterprises, in addition to the amount collected according to the goodssale price invoice, also collect interest on deferred payment from customers

- Form of automatic sales: This method need’nt the salesman to stand at thedelivery counter and receive money from the customer Customers automaticallyinsert their credit cards into vending machines and receive goods (This form is’ntwidely available in our country, but the petroleum industry has also started to apply

it by creating a number of self-service gas stations activities in major city centers)

1.2.2 Payment method

-Direct payment method: After receiving the purchased goods, thecommercial enterprise shall pay the seller immediately, possibly in cash, by advancestaff money, by bank transfer, payment by goods can be made (goods inexchange) invoices over 20 million must be transferred according to Circular26/2015 / TT-BTC in Article 1, Clause 10 amending and supplementing Article 15,

Circular 39/2014 / TT-BTC regarding invoices for selling goods and providingservices issued by the Ministry of Finance,

- Mode of deferred payment: The enterprise has received the goods but hasnot yet paid the seller Late payment may be made under a preferential credit term

as agreed

1.2.3 Sale accounting and determining business results

1.2.3.1.Cost of goods sold

* Definition:

Cost of goods sold is the actual ex-warehousing price of the sold product (orincluding the cost of buying goods attributed to goods sold during the period - for acommercial enterprise)

*Calculating the price of goods sold in the period

(1) The specific identifinication method

Being used mainly for items of inventory that differ from unit to unit, such axused a cars

This method tracks the actual physical flow of th good Each item of inventoy

is marked,tagged or coded with its “ specific” unit cost

This method is possible when a business has a limited variety of high- cost items that can be clearly identified

unit-(2)The weighted- average method

The weighted average method assumes that the goods available for sale/usehave the same( average) cost per unit

purchasedUnits of beginning goods+Units of goods purchased

(3) The FIFO method

The FIFO method assumes that the earliest goods purchased are the first to besold/used

Under this method, the costs of the earliest googs purchased are the first t berecognized as cost of goods sold/used

COGS during

the period =

Cost of goodsleft at theopening of theperiod

+

Cost of goodsincreased duringthe period

-Cost of goodsleft at theclosing of theperiod

Acc.632 “Cost of goods sold”

Acc.156 “ Merchandise goods”

Acc.157 “ Goods on consignment”

*Accounting entries:

 In case service business applies perpetual inventory method.

Flowchart 1 - Accounting for COGS in the perpetual inventrory method

Acc 156

returned

Acc 156, 157Acc 632

Acc 151

Goods purchased on the road are determined to be sold

Acc 157

Acc 911Sent goods have been confirmed to be sold

Acc 156 Closing cost price at the end of the period

Allocate purchasing costs

Acc 2294

Provisioning

Goods sold without going through the

Transfer cost of goods at the end of the period

 In case service business applies periodical inventory method.

Flowchart 2 - Accounting for COGS in the periodical inventory method

Acc 911Acc 632

Acc 611 Acc 156,157,151

Consolidate cost

of goods to determine business results

Consolidation of cost of goods in the period

Transfer of inventory at the beginning of the period

activities of the enterprise, contributing to increasing equity, excluding capital ofshareholders or owners ”.

*Revenue recognition criteria

- Specific rules for of revenue from the sales of goods( VAS 14):

a The enterprise has transferred to the buyer the sinificant risks and rewards

of ownership of the goods;

b The Company retains neither continuing managerial involvement to thedegree usually associated with ownership nor effective control over the goods sold;

c The amount of revenue can be measured reliably;

d It is probable that economic benefits associated with the transaction willflow to the entity;

e The costs incurred or to be incurred in respect of the transaction can bemeasured reliably

- Difference from the revenue of goods, the service revenue of atransaction is recognized when the outcome of that transaction can be reliablydetermined Where a transaction involving the rendering of services is attributable

to several periods, revenue is recognized in each period by reference to thepercentage of completion of the transaction on the date of making balance sheet.The outcome of a transaction can be measured reliably when all four (4) followingconditions are satisfied:

a The revenue is determined reliably;

b Be able to derive economic benefits from the provision of that service;

The service revenue of a transaction is recognized when the outcome of thattransaction can be reliably determined Where a transaction involving the rendering

of services is attributable to several periods, revenue is recognized in each period byreference to the percentage of completion of the transaction on the date of makingbalance sheet The outcome of a transaction can be measured reliably when all fourfollowing conditions are satisfied:

(a) The revenue is determined reliably;

(b) Be able to derive economic benefits from the provision of that service;(c) Determine the amount of work completed on the balance sheet date;(d) Determine the costs incurred for the transaction and the cost to completethe transaction to provide that service

The completed work is determined by one of the following three methods,depending on the nature of the service:

a Assess completed work;

b Comparing the percentage (%) between the completed workload andthe total workload to be completed;

c The ratio (%) of expenses incurred to the total estimated cost ofcompleting the entire service delivery transaction

The completed work does not depend on recurring payments or advances bycustomers

- Revenue from interests, royalties, dividends and shared profits of anenterprise is recognized when both (2) of the following conditions are satisfied:

a Be able to obtain economic benefits from the transaction;

b The revenue is determined reliably

*Accounts used

- Content: This account is used to record sales of goods and services ofenterprise in an accounting period, including sales of goods, products and servicesprovided to parent companies and subsidiaries in the same group in the accountingperiod

- Acc 5111: Turnovers from sales

- Acc 5112: Turnovers from finished goods

- Acc 5113: Turnovers from service provision

- Acc 5118: Other turnovers

- Acc 333: Tax and statutory obligations

Revenue from sale of goods and services Generate revenue deductions

Acc 3331

1.2.3.3.Accounting for revenue deduction

*Definition

Revenue deduction are those amounts that are adjusted to reduce theturnover of the sale of goods, products and services provided by the enterprise in theaccounting period Includes: Trade discount, Sales returns and Sales allowance:

- Trade discount is the amount of money that enterprise credited or paid tocustomers who bought goods and services in large volume in accordance with theagreement that the seller will give trade discount to the buyer

- Sales returns is the amount of goods sold which have subsequently beenreturned due to the following reason; breaching the commitment or the economiccontract, or in a wrong quantity,quality or specifications

- Sales allowances is a reduction made when the goods are not the samespecification as the those mentioned in the economic contract

- Minutes of sales allowances

- Sales allowances invoice

- Accounting voucher of sales allowances

Sales returns:

- Minutes of goods return

- VAT invoice or sales invoice

- Goods receipt

- Accounting voucher of sales returns

*Accounts used

- Acc 521: Sale deductions

- Acc 5211: Trade/sale discounts

- Acc 5212: Sale returns

- Acc 5213: Sale allowances

*Accounting entries:

Flowchart 4: Accounting entry for revenue deductions

The accountant receives the goods

1.2.3.4.Accounting for selling expenses and administrative expenses

*Definition

Selling expenses: are all expenses incurred during the selling process ofgoods and services including: expenses for selling and presentation of products,advertising expense, staff cost, materials and packaging expense, cost of tools andsupplies, depreciation of fixed assets used for selling, other expenses…

Administration expenses: are all overhead costs of business including salaryexpenses of business‘ administrative staffs (salary, wages, subsidies, ); socialinsurance, medical insurance, labor union expenses, unemployment insurance ofadministrative staff, expenses of office materials, labor instruments, depreciation offixed assets used for administration, lease rent, provision for bad debts, outsourcedservices (electricity, water, telephone, fax, assets warranty, fire and explosiveaccidents, ), other cash expenses (expenses of entertainment, customerconference )

*Accounting vouchers

- Table of salary distribution and social insurance

- Table of materials allocation

- Depreciation table

- VAT invoice, sales invoice

- Payment voucher, debit note

*Accounts used

- Acc.641: Selling expenses

- Content: reflect expenses actually incurred in process of sellingproducts, goods, providing services, including publicity expenses,demonstrationexpenses, advertising expenses…

- Account 642 : Administration expenses

- Content: record overhead costs of business including salary expenses

of administrative staffs, social insurance, medical insurance, labor union expenses,lease rent, outsourced services ( electricity, water, telephone, fax,…), other cashexpenses…

*Accounting entries:

Flowchart 5:Accounting entry for selling expenses

Acc 111,112,152,153,242 Acc 641 Acc 111,112

Reducing selling expensesAcc 133

Cost of tools, supplies

Acc 911Acc 334,338

Salary expenses

Transferred Acc 214

Depreciation cost of fixed assets

Acc 352

Reversal of provisionAcc 152,153,155,156

Materials, tools, products, machandises

that used forr sales activities Acc 352

Provisions for warranty expenses

Cost of services purchased from

Reversal of the difference between the provision for doubtful debts set up in the previous year and not yet used

up is greater than the amount to

be set up in the year

Provisions for payables to restructure enterprises, other payables, and high-risk contracts

Transferring corporate governance costs to determine results

Depreciation of fixed assets for the whole enterprise

Flowchart 6:Accounting entry for administrative expenses

Acc 111,1112.152,153,

242,331

Acc 642

Relevant acc

Cost of materials and tools

Deductions for business management sharesAcc 334, 338

Value of raw materials used for enterprise management

Expense is amortized gradually, expenses are deducted in advanceAcc 335, 242

Amount to be paid to superiors to form a fund for upper management

-In case,the company applies the Corporate Accounting System issued inaccordance with Circular No.133/2016/TT-BTC dated 26/08/2016 of the Minister

of Finance, Account 642 “Business management expenses” has 2 detailedaccounts:

- Acc 6421 - Selling expenses

- Acc 6422 - Administrative expenses

1.2.3.5.Accounting for other income and other expenses

1.2.3.5.1.Accounting for other income

*Definition

- Other income is the income generated from activities other than the normalbusiness operation of the enterprise

Including: income from the sale and liquidation of fixed assets, proceeds due

to fines and compensation, revenues from bad debts have been written off, taxesthat are exempted by the state from corporate income tax, income from gifts, andother incomes

-Other costs are the costs generated from activities other than business, lossesdue to events or operations separate from normal business operations of thebusiness

Including: expenses from the sale and liquidation of fixed assets,remaining value of liquidated or sold fixed assets, fines for breaching economiccontracts, tax penalty, tax payment, expenses for mistakes or omissions whenrecording accounting books, and other expenses

Collecting fines from customers who violate contracts, compensation from insurance organizations

- Acc 711 “Other income”

-Content: to record other income, revenues not from operating activity ofbusiness

*Accounting entries

Flowchart 7– Accounting entry for other income

Receive sponsorship, donate materials, goods, fixed assets

1.2.3.5.2.Accounting for other expense

* Accounting vouchers.

- VAT invoice, sales invoice

- Receipts and vouchers

- Debit notes and credit notes

- Minutes of handling surplus and missing assets

- Property liquidation record

- Tax receipts

*Accounts used.

- Acc 811 “Other expenses”

- Content: to record expenses incurred from events or operations separatedfrom normal operation of business

*Accounting entries:

Flowchart 8– Accounting entry for other expenses.

Collection and sale of bidding documents, liquidation and sale of fixed assets

Value of contributed capital Joint ventures

The difference between the revaluation price and the rest value of the fixed asset

Assessment of decrease in asset value when converting the type of enterprise

Acc 811Acc 111, 112, 131,

141

Acc 911

Other costs incurred

Consolidation to determine business results

Acc 338, 331

Penalty for breach of contract

Fines

Wear and tear treatment

1.2.3.6.Accounting for financial income and financial expenses

1.2.3.6.1.Accounting for financial income

*Accounting vouchers

- Invoices

- Documents and notices of the joint venture party

- Payment and receipt voucher

- Debit note and credit note

*Accounts used.

- Acc 515 “Financial income”

- Content: to record revenues from interests, copyrights, dividends,distributed income, and other income from financial activities of enterprises

*Accounting entries.

Flowchart 9– Accounting entry for financial income

Dividends, profits are distributed after the investment date

Acc 138Acc 515

Selling foreign currency

Profit from selling foreign currency

1.2.3.6.2.Accounting for financial expenses

*Accounting vouchers.

- Invoices

- Documents and notices of the joint venture party

- Payment and receipt voucher

- Debit note and credit note

*Accounts used.

- Acc 635 “Financial expenses”

- Content: to record financial operating cost including expenses or lossesrelating to financial investment activity, expenses of lending and borrowing, costs

of capital contributed to joint venture, to associates, etc

*Accounting entries.

Dealing with exchange rate losses due to the transfer of monetary items denominated in foreign currencies at the end of the period to financial expenses

At the end of the period, transfer financial expenses

Flowchart 10– Accounting entry for financial expenses

Acc 2291, 2292

Reversal of difference in provision for devaluation of securities investment and investment loss in other entities

Acc 635Acc 413

Acc 121, 128

Acc 911Loss on sale of investments

Acc 111, 112

Proceeds from the

sale of investments Cost of selling investments

Acc 229

Making provision for devaluation of securities &

loss of investments in other entities

Acc 111, 112, 331

Payment discount for buyers

Acc 111, 112, 335,242

Interest payable on loan, allocating deferred

payment, installment payment

1.2.3.7.Accounting for corporate income tax

*.Content of corporate income tax expenses

- Each quarter, based on the tax declaration, the accountant records

estimated current income tax into current income tax expense

- At the end of fiscal year, if the estimated income tax is less than the actualcurrent income tax to be paid, the accountant should record additional tax intocurrent income tax expense In case estimated income tax is higher than actualincome tax to be paid for the year, the accountants should decrease the currentincome tax expense by the difference between the estimated income tax and theactual income tax payable

- If the entity detects immaterial errors relating to income tax payable of theprevious year the accountants should record the increase or decrease of the incometax payable of the previous year in current income tax of the current year

- At the end of the fiscal year, the accountants should transfer the currentincome tax to determine operation result

*Accounts used.

- Acc 821 “Corporate income tax”

- Content: to record income tax expenses of business, including currentincome tax and deferred income tax expenses incurred during year, these expenseswill be based to determine operating results after tax of business in current financialyear

*Accounting entries.