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MINISTRY OF FINANCE ACADEMY OF FINANCE GRADUATION THESIS ACCOUNTING FOR SALES AND DETERMINATION OF BUSINESS RESULTS AT DUNG NHI PRODUCTION TRADING AND IMPORT EXPORT JOINT STOCK COMPANY Mentor PhD Thai[.]

MINISTRY OF FINANCE ACADEMY OF FINANCE

GRADUATION THESIS

ACCOUNTING FOR SALES AND DETERMINATION OF BUSINESS RESULTS AT DUNG NHI PRODUCTION TRADING AND IMPORT

EXPORT JOINT STOCK COMPANY

Mentor : PhD Thai Ba Cong

MSc Nguyen Ba Linh Major : Corporate Accounting

HA NOI - 2022

MINISTRY OF FINANCE ACADEMY OF FINANCE

GRADUATION THESIS

ACCOUNTING FOR SALES AND DETERMINATION OF BUSINESS RESULTS AT DUNG NHI PRODUCTION TRADING AND IMPORT

EXPORT JOINT STOCK COMPANY

Mentor : PhD Thai Ba Cong

: MSc Nguyen Ba Linh Major : Corporate Accounting

HA NOI - 2022

DECLARATION

I hereby declare that this thesis is my own work and effort and that hasnot been submitted anywhere for any award Where other sources of informationhave been used, they have been acknowledged

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

Hanoi, February 21, 2022

Student

Firstly, I am deeply indebted to my supervisors PhD Thai Ba Cong andMAc Nguyen Ba Linh, whose help, stimulating suggestions and encouragementhelped me all the time of research for and writing of this thesis

I also want to thank Dung Nhi Production Trading and Import ExportJoint Stock Company for giving me permission to commence this thesis in thefirst instance, to do the necessary research work and to use departmental data

I have furthermore to thank the former Vice Director and AccountingManager as well as all seniors at Dung Nhi Production Trading and ImportExport Joint Stock Company who gave and confirmed this permission andencouraged me to go ahead with my thesis

Especially, I would like to give my special thanks to my family whosepatient love enabled me to complete this work

CHAPTER 1: BASIC THEORY OF ACCOUNTING FOR SALES AND

DETERMINATION OF BUSINESS RESULTS IN COMMERCIAL

1.1.1.1 The concept of sale and determining business results 16

1.1.1.2 Relationship of sales and determination of business results 16

1.1.1.3 Roles and tasks of accounting for sales and determining business results 17

1.2 General theory of accounting for sales and determination of business

1.2.1.1.3 Revenue recognition principles 22

1.2.1.1.4 Accounting documents and accounts used 23

1.2.1.2.1 Definition of revenue deductions 26

1.2.1.2.2 Accounting documents and accounts used 27

1.2.2.2 Accounting documents and accounts used 28

1.2.2.3 Method of calculating the cost of goods exported from stock 29

1.2.8 Presenting information about sales accounting and determining business

1.2.9 Sales accounting and determination of business results in terms of IT

2.1.2 Characteristics of production and business organization of the company 572.1.3 Characteristics of management organization at Dung Nhi Production

2.1.4 Characteristics of organization of accounting work at Dung Nhi

2.1.4.1 Features of the organization of the accounting apparatus 65

2.1.4.2 Accounting policies applied in Dung Nhi Production Trading

2.1.4.3 Introduction to accounting software company used 702.2 The actual situation of accounting for sales and determination of business results at Dung Nhi Production Trading Import Export Joint Stock Company 77

2.2.1.1 Characteristics of products, goods, markets and the process of

2.2.1.3 Accounting documents and accounts used 79

2.2.1.4 Detailed and general accounting for revenue 79

2.2.3.2 Accounting for Administrative expense 109

2.2.4.2 Accounting for Financial expenses 117

2.3 General assessment of accounting for sales and determination of business results at Vietnam Trading and Technology Equipment Joint Stock Company

3.2.2 Principles of completing accounting work at Vietnam Trading and

3.3 Recommendations to improve the accounting work at Dung Nhi Production

3.4 Conditions for implementing solutions to complete sales accounting and determine business results at Dung Nhi Import-Export Production and Trading

3.4.2 The responsible of Dung Nhi Trading Production Import Export Joint

LIST OF DIAGRAM

Diagram 1.2: Accounting entries for instalments revenue and deferred revenue

25

Diagram 1.5: Accounting entries for cost of goods sold according to perpetual

LIST OF IMAGE

LIST OF SCREEN

Screen 2.5: The screen interface of VACOM accounting of revenue document82

Screen 2.8: The interface screen of entering data when calculating COGS by this

LIST OF ABBREVIATIONS

1 The urgency of the subject

In the context of the slow recovery of the world economy, which is facing theCovid-19 epidemic, the domestic economy faces many difficulties, whilecommodity prices fluctuate constantly, businesses compete fiercely to maintainits position in the market while increasing profits In particular, sales is one ofthe most important stages in the business It shows the quality of products, thetrust of customers as well as the scale and development of the business, meet theneeds of consumers

Specifically, any business that produces goods, or a commercial or serviceenterprise must be interested in consuming and selling its own products, goodsand services, because This is the output of the business's production and tradeprocess, at this stage the enterprise records the results of its operations in theform of sales revenue In particular, sales accounting and determining businessresults have an important role and great influence on businesses With thesupport from accounting, the organization and management serving the needs ofcapturing, collecting and processing information to evaluate the results ofproduction and business activities is an indispensable requirement, helping thebusiness owners to see the scale, the way of doing business as well as the abilityfor the business to grow or shrink, to make the right and timely decisions in thefuture Enterprises will limit the loss of goods, detect slow-moving goods, takeappropriate handling measures, and speed up the capital circulation process Thefigures provided by sales accounting and sales determination help businessesgrasp the completeness of the sales situation, thereby finding shortcomings inthe process of buying, selling, and stocking goods to come up with plans andadjustments to get the most profit State agencies, through that data, know thecompletion of the tax payment plan For other businesses, they use that

accounting data to see if it is possible to invest or enter into a joint venture withthe business.

Sales accounting and determining business results well performing their taskswill bring practical efficiency to sales in particular and to business activities ingeneral of the enterprise It helps users of accounting information to fullyunderstand the business activities of the enterprise, contributing to increasingcompetitiveness, improving the quality of business decisions, increasing thetransparency of main financial information

Stemming from the awareness and importance of sales accounting anddetermining business results, from theoretical studies combined with practicalsituations at Dung Nhi Import-Export Production and Trading Joint StockCompany in the past, with the help of the finance and accounting departmentand the functional departments of the company, and with the dedicated help of

Dr Thai Ba Cong and Master Nguyen Ba Linh, I have decided to choose thetopic "Accounting for Sales and Determining Business Results at Dung NhiProduction, Trading and Import-Export Joint Stock Company" as my researchtopic

2 The purposes of the dissertation

Purposes of the research: To gain an in-depth understanding of the organization

of sales accounting and determination of business results, giving an overview ofthe achievements and shortcomings in sale accounting work and determiningbusiness results, then make suggestions to improve the accounting and salesactivities and determination of business results at Dung Nhi Production Tradingand Import Export Joint Stock Company

3 The object and scope of the dissertation

- Research object: Accounting for sales and determination of business results atDung Nhi Production Trading and Import Export Joint Stock Company

- Research scope:

+ About the content: Focusing on researching the actual situation of the salesaccounting and determining business results at Dung Nhi Import-ExportProduction and Trading Joint Stock Company from the perspective of financialaccounting

+ About space: Research at Dung Nhi Production Trading Import and ExportJoint Stock Company located in Uy No commune, Dong Anh town, Hanoi City.+ About time: Researching theoretical issues and surveying current situationdocuments at Dung Nhi Production Trading Import and Export Joint StockCompany in 2021

documents using descriptive statistics, qualitative analysis, and comparing the actual situation to the theoretical basis to deduce, infer, and present research findings

5 The structure of the dissertation

In addition to the introduction and conclusion, the dissertation consists of three chapters:

Chapter 1: Basic theory of accounting for sales and determination of

business results in commercial enterprises

Chapter 2: The actual situation of accounting for sales and determination

of business results at Dung Nhi Production Trading and Import Export Joint Stock Company

Chapter 3: Several solutions to improve accounting for sales and

determination of business results at Dung Nhi Production Trading and Import Export Joint Stock Company

CHAPTER 1: BASIC THEORY OF ACCOUNTING FOR SALES AND DETERMINATION OF BUSINESS RESULTS IN COMMERCIAL ENTERPRISES

1.1 General concepts and tasks of sales accounting and determining

business results of enterprises 1.1.1 General overview of sales accounting and determination of business results

1.1.1.1 The concept of sale and determining business results

Sale is the transfer of ownership of products and goods associated withbenefits or risks to customers while being paid or accepted by customers Sales

is the final stage of the production - business process This is the process ofconverting capital from the form of product capital or goods to the form ofmonetary capital or payment capital

Determining business results is a comparison between business expensesspent and business income received in the period If the income is greater thanthe expenses, the sales result is a profit If the income is less than the expenses,the sales result is a loss The determination of sales results is usually carried out

at the end of the business period, usually at the end of the month, at the end ofthe quarter, or at the end of the year, depending on the characteristics of eachbusiness and the management requirements of each enterprise

1.1.1.2 Relationship of sales and determination of business results

The business result of an enterprise after a period of operation is the differencebetween the output and input of production and business activities And thatoutput is the result of the company's sales and consumption of goods.Accountants rely on metrics related to the sales process to determine businessresults

Sales is the final stage in the business process of an enterprise, and businessresults are an important basis for the unit to decide whether to consume goods ornot Therefore, it can be said that there is a close relationship between sales and

determining business results Sales results are the ultimate goal of a business,and sales are the direct means to that end.

1.1.1.3 Roles and tasks of accounting for sales and determining

business results

Sales and determining business results are extremely important not only forbusinesses but also for the entire national economy As for the business itself, ifthey can sell goods, they will have income to cover expenses, have conditions toexpand business activities, improve the lives of employees, and create a source

of accumulation for the economy The accurate determination of sales results isthe basis for accurately determining the operational efficiency of enterprisestowards the state through the payment of taxes, fees, and charges to the statebudget, determining a reasonable cost structure; and effectively using the profitsobtained in harmony between the economic interests: the State, the collective,and individual employees

Accounting is regarded as an important tool for assisting businesses in managinggoods consumption and determining business results

To meet the requirements of product and goods management, sales determinethe results and deliver the results of the activities Accountants must perform thefollowing tasks well:

1 Fully reflect and record the current situation and changes of each type ofproduct or good according to the quantity, quality, type, and value criteria

2 Reflect and record fully, timely, and accurately the revenues, revenuedeductions, and expenses of each activity in the enterprise, while alsomonitoring and urging customer receivables row

3 Accurately reflecting and calculating the results of each activity, monitoringthe performance of state obligations, and the distribution of activity results

4 Provide accounting information for the preparation of financial statements, aswell as a periodic analysis of economic activities related to the sales process,result determination, and distribution.

After having the sales results, the accountant will analyze and evaluate the salesresults of the enterprise in general and of each item and each department inparticular; determine and calculate specifically the level of influence of eachfactor on sales results From there, propose measures to improve the sales results

of the business in the coming period

1.1.2 Classification of sales methods in commercial enterprises

Sales methods in domestic trading enterprises

Wholesale method:

Wholesale is a form of selling goods and services in large volumes or inbatches at highly discounted or original prices Wholesale is often applied, ordirected to commercial intermediaries such as agents, general agents,distributors, etc In the form of wholesale, there are two specific methods:wholesale goods through warehouses and wholesale goods directly or directshipping

- Wholesale of goods through the warehouse: The sale of goods andservices that must be exported directly from their warehouse With warehousewholesale, businesses can deliver goods directly to customers at the warehouse

or deliver goods to the buyer's warehouse or contract location

- Wholesale of goods for direct transportation: A commercial enterprise,after purchasing and receiving goods, does not bring them back to thewarehouse, but sells them directly to the buyer Businesses also have 2 optionswith this form: direct delivery or delivery

Retail method:

Retailing is a method of selling goods and services in small quantities and

at generally stable prices This method usually applies directly to consumers ofthat product or service Retail has more diverse forms of fulfillment thanwholesale Especially:

- Centralized cash-collecting retail: Centralized cash-on-cash Retail is aform of sales in which the buyer's cash collection and delivery are separated.Each stall has a cashier who is responsible for collecting money from customers,writing invoices or accumulating accounts for customers to receive goods at thestalls delivered by sales staff At the end of the shift (or the end of the day) tosell, the salesperson uses the invoice and accumulated delivery of goods to thecustomer or the inventory of goods in stock to determine the quantity of goodssold during the day and shift and make a selling report Cashiers make paymentslips and pay sales to the cashier

- Direct cash-collecting retail: In this form, sales staff directly collectmoney from customers and deliver goods to customers At the end of the shift or

at the end of the sales day, the salesperson makes a payment slip and pays thecashier At the same time, counting the goods in stock to determine the quantity

of goods sold in the shift, during the day and make a sales report

- Installment sale: is the sale of goods to customers, and customers paymany times With this form, businesses will receive an additional interest chargedue to late payment from customers

- Self-service retail: Customers buy goods by themselves and bring them

to the payment table Most supermarkets apply this form quite commonly

- Vending: A commercial enterprise uses vending machines to sell theirproducts, goods and services After the customer puts money into the machine,the machine will automatically push the goods out to the buyer

- Sending agents to sell, consign goods: An enterprise that is willing tobring its goods to selling agents or send agents to sell products directly to them

The receiving party as an agent, consignor, will directly sell goods, pay forgoods, etc.

1.1.3 Payment methods

- Cash payment: This is a form of cash sale, meaning that when the goods aredelivered to the buyer, the buyer immediately pays the cashier Customers canhave a discount under this method

- Non-cash payment: bank transfer, cheque Documents used in this form ofpayment are VAT invoices

Or it can be divided into 2 methods: direct payment and deferred payment

1.2 General theory of accounting for sales and determination of

business results

1.2.1 Accounting for revenue and revenue deductions

1.2.1.1 Accounting for revenue

1.2.1.1.1 Definition of revenue

According to Vietnamese Accounting Standard No 14: “Revenue is the totalvalue of economic benefits obtained by an enterprise in an accounting period,

arising from the normal production and business activities of the enterprise,

contributing to increase equity” Revenue includes:

- Revenue from selling goods and providing services

- Revenue from financial activities

Sales revenue is the total amount received or will be received from transactionsand revenue-generating operations such as selling goods and providing services,including additional revenues and fees in addition to the selling price (if any). 

- For goods subject to VAT by the direct method or not subject to VAT, thesales revenue is the total payment price

- For goods subject to VAT by the credit method, the sales revenue is the exclusive price.

tax For goods subject to excise tax or import and export taxes, the sales revenue isthe total payment price (including excise tax and import and export tax)

- The revenue can be measured reliably

- The enterprise had or will receive economic benefits from the sale of thetransaction goods

- Identify cost related to sales transactions

Sales revenue = Sales volume x Sales price

Net sales = Sales revenue - Sales deductions

- Revenue of selling and providing services is recognised when the transactionresult was realible measured In the case of transaction about provide service inmany periods, revenue is recognised in the period according to result of thework was completed in the day that form Balance Sheet this period

- Result of transaction that providing service is recognised when satisfied all 4 conditions:

(a) The revenue can be measured reliably

(b) The enterprise had or will receive economic benefits from the sale of thetransaction goods

(c) Identify the part of work was completed at the reporting time

(d) Identify the cost incured for the transaction and cost for complete providingtransaction service

In the case economic contract included many transactions, the enterprise mustrecognise the transactions to record revenue complied with AccountingStandard

Net revenue of selling and providing services that the enterprise performed inthe accounting period lower than initial recognition revenue of selling andproviding services due to: trade discount, sales discount or returned sellinggoods

At the primary stage of a service transaction, if not recognised the businessresult certainty, the revenue will be recorded by the cost recognised and can berecovered If cost related to the service definitely can’t take back then not recordthe revenue, cost incured is accounting to identidy business result in the period.When have realiable evidence about the costs incured will be recovered thenrevenue will be recorded corresponding to that cost

1.2.1.1.3 Revenue recognition principles

Revenue recognition is one of the most important steps in the business process

It helps the enterprises define business results clearly and honestly Withdifferent revenue recognition principles will lead to different business results.Therefore, revenue must comply with the following 6 recognition principles(According to clause 56, circular 133/2016/TT-BTC):

- Revenues and expenses that generate revenue must comply with the matchingprinciple But sometimes the principle of concordance in accounting will becontradicted with the principle of prudence At this time, accounting needs to bebased on the nature to be able to determine the most accurate and reasonabletransactions

- Profit or loss revenue is undetermined only when the enterprise is stillresponsible for the performance of future obligations (Except for the most basicwarranty obligations) And certainly not yet reap the economic benefits Theclassification of losses or gains does not depend on whether cash flows havebeen incurred

- Revenue does not include third-party receipts:

+ Types of indirect substitution (VAT, environmental protection tax, export tax,special consumption tax)

+ Amount of money collected by the sales agent for the main owner

+ Unearned payments outside the unit selling price or other circumstances

- The time to recognize accounting revenue and tax revenue may vary from case

to case Tax revenue is used to determine the tax payable according toregulations The accounting revenue used to prepare the financial statementsmust strictly comply with the regulations And depending on the case, it is notnecessary to match the number stated on the sales invoice

- When transferring goods or services between internal accounting units.Depending on the locations and operating characteristics, the enterprise maydecide to recognize revenue at the units If there is an increase in the value of theproduct without having to follow the accompanying documents When preparingthe financial statements, all transactions between internal entities must beeliminated

- Revenue is recognized when the revenue for the period is reported Accountsthat do not have a balance, at the end of the accounting period, must transferrevenue to get the most accurate business results

1.2.1.1.4 Accounting documents and accounts used

Accounting account used:

- Account 511 – Revenue from selling goods and providing services, has

6 accounts level 2 and in commercial enterprises mainly uses the 2nd levelaccount, which is Account 5111

- Account 5111 – Sales of goods: This account is used to record the revenue andnet sales of the volume of goods determined to be sold in an accounting period

of the enterprise This account is mainly used for trading in goods, supplies,food, etc

- Account 5113 - Revenue from service provision: This account is used to recordrevenue and net revenue of the volume of services completed, provided tocustomers and determined to be sold in a given period accountant

- Account 5114 - Revenue from subsidies and price subsidies: This account isused to record revenues from subsidies and subsidies provided by the State whenenterprises perform tasks of providing products, goods and services according toregulations

- Account 5117 - Investment real estate revenue: This account is used to recordrental income of investment properties and revenue from sale and liquidation ofinvestment properties

- Account 5118 - Other revenue: This account is used to record revenues otherthan sales of goods, revenue from semi-finished products, revenue from theprovision of services, revenue from subsidies and sales Real estate businesssuch as: Revenue from sale of materials, scrap, sale of tools, tools and otherrevenues

and some other related accounts such as:

Account 3331 - Payable VAT

Account 3387 - Unrealized revenue

Account 111 - Cash, Account 112 - Bank deposits,

Accounting documents used:

- Surplus and shortage of goods inventory records, Minutes of sales discount,Minutes of returned goods – Receipts, Credit note 

- Other relevant documents

1.2.1.1.5 Accounting entries

Diagram 1.1: Accounting entries for revenue

Acc 911 Acc 511 Acc 111,112,131

Revenue closing entry Revenue

Acc 911 Acc 511 Acc 111,112

Net revenue Revenue at immediate

closing entry sale price Amount

received

for the first time

Acc 515 Acc 3387 Acc 131

Financial Profits closing Unrealized Total

amount for Amount received

expense entry turnover the

following periods

Acc 33311

VAT payable

Diagram 1.3: Accounting entries for sales agent revenue

Acc 911 Acc 511 Acc 131 Acc 642

Net revenue Revenue Commission deducted

Acc 33311 Acc 111,112 VAT the remaining amount collected from the agent

1.2.1.2 Revenue deductions

1.2.1.2.1 Definition of revenue deductions

Sales deductions includes trade discounts, sales rebates, sales returns,.

Sales deductions are the basis for calculating net revenue and business results inthe accounting period Sales deductions must be reflected, monitored in detail,separately on appropriate accounts to provide accounting information forfinancial statements

Trade discount: is the reduction in price a manufacturer or wholesalergives a wholesale or retail when they buy a product or group of products Inother words, a trade discount is a certain percentage a manufacturer is willing toreduce its list price for wholesalers or retailers

Sales returns: is merchandise sent back by a buyer to the seller, usually forone of the following reasons: excess quantity shipped, excess quantity ordered,defective goods, goods shipped too late, product specifications are incorrect,wrong items shipped

Sales rebates: the amount of money the enterprise (seller) deducted for thebuyer in special cases such as the goods sold have poor quality, not inaccordance with the specifications or in time-limit stated wrongly in thecontract

1.2.1.2.2 Accounting documents and accounts used

Accounting Accounts used:

- Acc 511 – Revenue (According to clause 57 circular 133/TT-BTC, whenincurred revenue deductions, account to debit side of acc 511 – Revenue ofselling and providing services While according to circular 200, accountingaccount used is account 521)

- Acc 3331 – Value Added Tax

- Other related accounts: Acc 111, Acc 112, Acc 131,…

Accounting Documents used:

- Goods returns received note;

- The minutes of the sales discount agreements;

- The minutes of the trade discount agreements,

- Goods returns invoice;

- Payment voucher,

- Bank depit note;

- Tax payment documents,…

1.2.2 Accounting for COGS

1.2.2.1 Definition

In commercial enterprises, cost of goods sold is the total cost of keeping goods

at the warehouse, including purchase price from suppliers, insurance, VAT,shipping fees,

1.2.2.2 Accounting documents and accounts used

Accounting accounts used:

Account 632 - Cost of goods sold This account has no balance.

If the accounting of inventories is carried out according to the perpetualinventory count, account 632 reflects the value of products, goods and servicessold in the period; expenses for raw materials and labor that are above thenormal level and unallocated fixed overheads, are charged to cost of goods sold

in the period; losses of inventories after deducting compensation caused bypersonal liability; Expenses for construction and self-made of fixed assets thatare above the normal level, are not be included in the historical cost of self-madetangible fixed assets; Amounts of provision for devaluation of inventories (Thedifference between the amount of provision for devaluation of inventories whichmust be set up this year, is larger than the amount of provision for devaluation ofinventories made in the previous year that have not been used up)

If the accounting of inventories is carried out according to the periodic inventorymethod, account 632 reflects the calue of unidentified finished goods sold at thebeginning of the period (with manufacturing enterprises); The actual totalproduction cost of the finished product (regardless of whether it is in stock ornot) (with manufacturing enterprises); The cost of goods sold in the period (withcommercial enterprises); The amount of provision for devaluation of inventories(The difference between the amount of provision for devaluation of inventorieswhich must be set up this year, is larger than the amount of provision fordevaluation of inventories made in the previous year that have not been usedup)

In addition, this account is also used to reflect expenses related toinvestment properties trading activities such as depreciation expenses, repairexpenses, and expenses for leasing investment properties according to the mode

of operating lease (in case of inconvenience), liquidation expense and transfer ofinvestment properties…

+ Other related accounts: Acc 154, Acc 155, Acc 156, Acc 157, Acc 214,

…

Accounting Documents used:

Receipt of delivery bill Note sent to the agent

- Inventory receiving voucher

- Inventory delivery voucher

- Stock summary report

- Price allocation table

- Internal delivery note

- Bill of goods sent agents,…

- VAT invoice

- And some other related documents

1.2.2.3 Method of calculating the cost of goods exported from stock

To calculate the export value of inventory, according to Circular BTC, accountants can apply one of the following methods:

133/2016/TT-Specific identification: According to this method, enterprises must managegoods according to each shipment When exporting a shipment, take the actualprice of that shipment

However, the application of this method requires strict conditions Only businessenterprises with few types of items, high-value inventories, stable items and

identifiable inventory types can apply This method cannot be used bybusinesses that sell a variety of goods.

Weighted average method: According to the weighted average method, thevalue of each type of inventory is calculated according to the average value ofeach type of inventory at the beginning of the period and the value of each type

of inventory purchased or produced in the period The average value can becalculated for each period or after each imported shipment, depending on thespecific conditions of each enterprise

- At weighted average price at the end of the period (month)

According to this method, the cost of goods sold in the period is calculated at theend of the period Depending on the enterprise's reserve period, inventoryaccounting is based on the input price, the amount of inventory at the beginning

of the period and imported during the period to calculate the average unit priceAdvantages: Simple, easy to do, only needs to calculate once at the end of theperiod

Disadvantages: The accuracy is not high Moreover, the calculation workaccumulated at the end of the month affects the progress of other parts Inaddition, this method has not met the timely requirements of accountinginformation at the time of transaction

- According to the weighted average price after each import (time average)

After each input of products, supplies, and goods, the accountant must determine the actual value of the inventory and the average unit price

re-This method has the advantage of overcoming the limitations of the abovemethod, but the calculation is complicated, many times, and laborious Due tothe above characteristics, this method is applied to enterprises with few types ofinventory and low import and export volume

- First-in-first-out method

According to this method, it is assumed that the number of goods in first, is firstout, and the actual price at that time is the price of the goods shipped out.Therefore, ending inventory is calculated at the unit cost of the last purchase.This method makes it possible to immediately calculate the cost of goodsshipped from stock each time, thus ensuring timely data for accountants torecord the next stages as well as for management The cost of inventory will berelatively close to the market price of the item Therefore, the inventoryindicator on the accounting statements has a more realistic meaning.

However, this method has the disadvantage of making current revenuesinconsistent with current expenses According to this method, current revenue isgenerated by the value of products, supplies, and goods that were acquired along time ago At the same time, if the number of items is large, the continuousimport and export will lead to the costs for accounting as well as the workloadwill increase a lot

1.2.2.4 Accounting entries

Diagram 1.5: Accounting entries for cost of goods sold according to

perpetual inventory count

Acc 154, 155, 156 Acc 632 Acc 155, 156

(1) (4)

Acc 157 (2) (3)

Acc 911 (5)

(1) Export goods and finished products directly sold

(2) Export goods and finished products for consignment

(3) When the goods are sent for sale, consumption is determined

(4) The cost of goods and finished goods sold returned to stock

(5) At the end of the period, closing entry from Acc 632 to Acc 911

Diagram 1.6: Accounting entries for cost of goods sold according to

periodic inventory method

(1) At the beginning of the period, transfer the cost of finished goods and goods

at the beginning of the period

(2) At the beginning of the period, the cost of goods for consignment has notbeen accepted as early consumption

(3) Product cost that is stored in the period

(4) Cost of goods sold in the period

(5) At the end of the period, transferring the value of finished goods in stock atthe end of the period

(6) At the end of the period, transferring the value of goods on consignment hasnot been accepted as consumption at the end of the period

(7) At the end of the period, closing entry from Acc 632 to Acc 911

1.2.3 Accounting for Selling expense and Administrative expense

1.2.3.1 Definition

- Selling expenses include the actual costs incurred in the process of sellingproducts, goods, and providing services, including the costs of offering,introducing products, advertising products, and sales commissions , cost ofproduct and goods warranty (except for construction and installation activities),cost of preservation, packaging, transportation, salary of sales staff (salaries,wages, allowances, .), social insurance, health insurance, union funding,unemployment insurance, labor accident insurance of sales staff; costs ofmaterials, tools, and depreciation of fixed assets used by the sales department;outsourced services (electricity, water, telephone, fax, ); other monetary costs

- General and administrative expenses include general administrative expenses

of the enterprise, including expenses for salaries of employees of the businessmanagement department (salaries, wages, allowances, ); social insurance,health insurance, union dues, unemployment insurance of enterprisemanagement staff; expenses for office materials, labor tools, depreciation offixed assets used for enterprise management; land rent, license tax; provision forbad debts; outsourced services (electricity, water, telephone, fax, propertyinsurance, fire and explosion ); other monetary expenses (reception, customerconference )

Selling and administrative expenses, which are not considered deductibleexpenses according to the provisions of the Law on CIT, but have sufficientinvoices and vouchers and have been properly accounted according to theaccounting regime, shall not be recorded reduce accounting costs but onlyadjust in the CIT finalization to increase the payable CIT amount

1.2.3.2 Accounting documents and accounts used

According to clause 64 circular 133/TT-BTC, Accounting account used is

Account 642 - Business management expenses To reflect the actual set of costsincurred in the process of consuming goods, this account has no balance and hastwo level-two accounts:

- Account 6421 - Selling expenses: Recording actual selling expenses incurred

in the process of selling products, goods and providing services in the period ofthe enterprise and the situation of transferring selling expenses to the account.911- Determination of business results

- Account 6422 - General and administrative expenses: Recording generaladministrative expenses of the enterprise incurred during the period and thetransfer of administrative expenses to Account 911 - Determination of businessresults

Other related accounts: Acc 111, Acc 112,

Accounting Documents used: Goods delivery note, Salaries calculation and

allocation sheet, VAT invoice, Sales receipt, Receipt, Payment voucher, Debit

note, Credit note, Advanced payment list and other related documents

(2) (8) Acc 214 Acc 911

(3) (9)

Acc 111, 112, 331

(4) Acc 133

(5): Allowance for doubtful debts and provision for payables

(6): Reversal of provision for doubtful debts, provision for payables.

(7): Items recorded to reduce selling expenses, administration expenses actuallyincurred in the period

(8): Appropriation of expenses for major repairs of fixed assets at the salesdepartment, expenses for major repairs of fixed assets used for the wholeenterprise

(9): At the end of the period, closing entry from Acc 642 to Acc 911

1.2.4 Accounting for financial income and financial expense

1.2.4.1 Definition

Financial expenses are expenses related to capital activities, financial

investment activities and operations of a financial nature Including expensesrelated to investing in financial instruments; joint venture investment; affiliateinvestment; invest in subsidiaries Expenses related to lending activities.Expenses related to foreign currency trading

Financial income is the total value of economic benefits obtained by an

enterprise from financial activities or capital business during the accountingperiod Consists of:

- Interest: Loan interest, bank deposit interest, sales interest on deferredpayment, installment payment, interest on investment in bonds, bills of lading,payment discounts enjoyed from the purchase of goods and services;

- Dividends and profits distributed to the period after the investment date;

- Income from investment activities, buying and selling short-term and term securities; Capital transfer profits upon liquidation of capital contributions

long-to joint ventures, investments in associates, investments in subsidiaries, othercapital investments;

- Income from other investment activities;

- Exchange rate gains, including profits from selling foreign currencies;

- Revenues from other financial activities.

1.2.4.2 Accounting documents and accounts used

Accounting Accounts used: Accounting for financial expense and financialincome uses the following main accounts:

Account 635 - Financial expenses

Account 635 is used to record financial expenses of the enterprise This accounthas no balance

This account reflects financial operating expenses including:

- Expenses for loan interest, deferred purchase interest, and interest on rental offinancial leased assets;

- Payment discount for buyers;

- Losses due to liquidation or sale of investments; transaction costs of sellingsecurities;

- Exchange rate loss incurred during the period; Exchange rate loss due toperiod-end revaluation of monetary items denominated in foreign currencies;Loss of foreign currency sales;

- Amount of provision for devaluation of trading securities, provision for loss ofinvestment in other entities;

- Expenses of other financial investment activities;

- Other financial expenses

Account 515 – Financial incomes

Account 515 reflects the revenue from financial activities of the enterprise Thisaccount has no balance

This account reflects financial operating expenses including:

- Expenses for loan interest, deferred purchase interest, and interest on rental offinancial leased assets;

- Payment discount for buyers;

- Losses due to liquidation or sale of investments; transaction costs of sellingsecurities;

- Exchange rate loss incurred during the period; Exchange rate loss due toperiod-end revaluation of monetary items denominated in foreign currencies;currencies Loss of foreign currency sales;

- Amount of provision for devaluation of trading securities, provision for loss ofinvestment in other entities;

- Expenses of other financial investment activities;

- Other financial expenses

Accounting Documents used: Sent interest calculation voucher; Receipts; Bankstatement; Loan interest calculation voucher; Payment voucher; debit note;Notice of receipt of dividends; Accounting bill; Bank statements; Some otherrelevant documents