GRADUATION THESIS Topic Accounting for Payroll And Payroll Deductions At Thien Ung Services Training Company Limited

The feature in condition of using accounting software 2.2 The current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited 2.2.1 T

MINISTRY OF FINANCE

ACADEMY OF FINANCE -

Thien Ung Services Training Company Limited

Major: English for Finance and Accounting

Student code: 165D2202010048

Supervisor: MSC Cao Phuong Thao

Ha Noi - 2020 RESEARCH PROPOSAL DETAILED OUTLINE

1.Rationale of the study

2.Aims of the study

3.Scope of the study

4.Methodology of the study

5.Organization of the study

CHAPTER 1: LITERATURE REVIEW

1.1 Overview of payroll and the payroll deduction

1.1.2.3 Other forms of payment

1.2 Accounting for payroll and payroll deductions

1.2.1 Definition and role of accounting for payroll and payroll deductions

1.2.2 Accounting for payroll

1.3.4 General journal voucher

1.4 Factor influencing accounting for salary and salary deductions

1.4.1 Internal factors

1.4.2 External factor

CHAPTER 2: THE STUDY

2.1 Overview of Thien Ung Service Traning Company Limited

2.1.1 Establishment and development of Thien Ung training service accounting company 2.1.2 The main activities and the organization of Thien Ung training service accounting company

2.1.3 The features of accounting system of Thien Ung training service accounting company

2.1.3.1 Organization of the accounting system

2.1.3.2 Accounting form, applied accounting policy and reporting system at the company 2.1.3.3 The feature in condition of using accounting software

2.2 The current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited

2.2.1 The features of labor, payroll and payroll deductions at Thien Ung training service

accounting company

2.2.2 Payment methods and salary calculating methods

2.2.3 Vouchers and accounts used

2.2.4 Accounting for salaries and bonuses

2.2.5 Accounting for payroll deductions

3.3.1 Improving payroll management

3.3.2 Adjusting salary calculation form

3.3.3 Improving training of manager and workers

3.3.4 Improving salary policy

3.2.5 Using reasonable bonuses policy

CONCLUSIONS

REFERENCES

APPENDIXES

ACKNOWLEDGEMENT

Firstly, I would like to express sincere thanks to Academy of Finance (AOF) for giving

me opportunity to study and research my into educational reality

I do not know how to express my appreciation to Ms Cao Phuong Thao, my supervisor, who gives valuable advice, perceptive comments as well as her enthusiasm supports and careful supervision

I really appreciate all my lecturers at the Academy of Finance for their assistances, directions and encouragement, it is main factor for me to complete excellently the study

of educational reality

I have furthermore to thank for the help of THIEN UNG SERVICE TRAINING

COMPANY LIMITED and people in the company who give me opportunity to practices

in the company in the pastime

Especially, my friends from Foreign Languages also supported me in my thesis, I would like to thank them for all their support and suggestion I also would like to give my thanks

to my beloved family crating motivation for me to complete my graduation thesis Finally, because of limitation of time and knowledge, my mistakes are unavoidable, so I wish to have more opportunities I also wish to receive more contribution and suggestion

to get a better project

ABSTRACT

New In the current period, the trend of integration and globalization of the world

economy takes place, enterprises in general are under pressure of competition by other country Therefore, in order to increase the integration process and improve the efficiency

of the production and business activities, businesses need to find effective working methods The important goal of a business is to maximize profits The profit earned by a business depends on both objective and subjective factors Payroll regime is also an importance factors that company should focus on, so this thesis would make clear this issue

This study is about the regime of wages and bonuses at THIEN UNG SERVICE

TRAINING COMPANY LIMITED First, the main purposes are providing deep

understanding about salaries, bonuses, insurances defines their theories and the important

of paying salary for their employee and the necessary of the payroll accountant Next, it will consider the applications, the achievements and limitations of payroll regime at THIEN UNG SERVICE TRAINING COMPANY LIMITED, as an illustration for the academic background Finally, there are many proposals and solution for the company to improve their payroll accounting regime In conclusion, this study would have a part in improving the regime of payment of salaries, wage, bonuses and insurances at the company Hopefully, the adjustment could help company get a better payroll regime in the future, and it also would be a great reference for other company

Part I: Introduction

1 Rationale

Labor is the most important input factors of every business Improving labor productivity

is the basic way to improve business efficiency and create reputation of businesses in competitive market

For enterprises, to survive and develop, they must find ways to improve production and business efficiency Therefore, the management of wages and salary deductions must be paid attention Other activities will not be effective, or even ineffective if this work will not

be paid enough attention

In today's market economy, labor and salary management organization is an important content in the business management of enterprises, it is one of the most important factors that determine quantity and quality of goods and products

Payroll and payroll deductions for the employees always receive great concern because of its social-economic significance For the employees, these payments are important because they could be their sole incomes, to support their whole families’ lives For every business,

it accumulates in the expense account that takes up a great proportion in total costs It can

be the driving force behind the increase of labor productivity, if it is paid basing on employee's productivity Therefore, how to construct wage regime and how to select an appropriate payment form are very necessary Payroll issue is not new, however there are some deficiencies which are need to adjust to get an effective work of paying salary, wage, bonus and insurance in enterprises As the result, Enterprises could ensure that, their employee can get suitable salary, thus companies can save cost and increase profits Understanding the paramount importance of the payroll accounting work in enterprises so

in the process of practice as well as completing the subject of graduation, with the enthusiastic advices of my teacher - Ms Cao Phuong Thao and the support of financial accounting department's personnel, I decide to choose the subject: "Accounting for payroll and payroll deduction at Thien Ung service training company limited " as graduation thesis topic

2.Aims of the study

When studying “Accounting for payroll and payroll deduction”, there are three main objectives which I want to clarify First, providing basic information to understand the concept of salary, payroll deductions, bonus and insurance Second, the ways that enterprise use to made payment for their employee, taking the scenario at Thien Ung Service Training company limited as a case for study, and reviewing their advantages and disadvantages Finally, it is to suggest possible solutions to improve the payroll accounting and the payroll related to insurance at

3.Subjects and Scope of the study

The study provides analysis and reviews the work of payroll accounting and payroll deduction at Thien Ung training service company limited Research scope: research scope limited in Thien Ung training service company limited Time study: metrics used mainly are February 2019

4 Methodology

In order to finish graduation thesis, many methods are applied such as collecting and synthesizing data, analyzing by tables, diagrams and using mathematical Firstly, Methods for collecting and synthesizing data include many ways to collect information and data supporting graduation thesis For example, I work and contact the financial-accounting department of the Company to collect data about payroll accounting and payroll deduction

in February 2019 of the Company Besides, using many tools to get information about the situation of payroll accounting and payroll deduction in Vietnam such as: Internet, newspaper, financial news and many colleagues or studying many graduation theses and many related topics Secondly, Comparison is another method This is method that used to compare the similarities and differences of an issue In reality, applying this method, I compare between theory and practices about payroll accounting and payroll deductions in the Thien Ung service training company limited, so finding out the deficiencies of the company Thirdly, using analysis by table and diagrams is an efficient method Finally, I use Mathematical method which using mathematical formulas to calculate the payments to the employees

Chapter 1: Literature review

Chapter 2: The current situation of accounting payroll and the payroll deduction to

at Thien Ung service training company limited

Chapter 3: Recommendations to improve payroll regime and payroll deduction at Thien Ung service training company limited

Part II: Main content

CHAPTER 1: LITERATURE REVIEW

Contents

1.1 Overview of payroll and the payroll deduction 2

1.1.1 Definitions 2

1.1.1.1 Payroll 2

1.1.1.2 Payroll deduction 2

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions 2

1.1.2 Payment methods 2

1.1.2.1 Job-based salary 2

1.1.2.2 Time-based salary 2

1.1.2.3 Other forms of payment 2

1.2 Accounting for payroll and payroll deductions 2

1.2.1 Definition and role of accounting for payroll and payroll deductions 2

1.2.2 Accounting for payroll 2

1.2.2.1 Vouchers used 3

1.2.2.2 Accounts used 3

1.2.3 Accounting for payroll deductions 3

1.2.3.1 Social insurance 3

1.2.3.2 Health insurance 3

1.2.3.3 Unemployment 3

1.2.3.4 Trade union 3

1.3 Accounting books used 3

1.3.1 General Journal 3

1.3.2 General Ledger 3

1.3.3 Journal voucher 3

1.3.4 General journal voucher 3

1.4 Factor influencing accounting for salary and salary deductions 3

1.4.1 Internal factors 3

1.4.2 External factor 3

2.1 Overview of Thien Ung Service Traning Company Limited 3

2.1.1 Establishment and development of Thien Ung training service accounting company 3

2.1.2 The main activities and the organization of Thien Ung training service accounting company 3

2.1.3 The features of accounting system of Thien Ung training service accounting company 3

2.1.3.1 Organization of the accounting system 3

2.1.3.2 Accounting form, applied accounting policy and reporting system at the company 3

2.1.3.3 The feature in condition of using accounting software 3

2.2 The current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited 3

2.2.1 The features of labor, payroll and payroll deductions at Thien Ung training service accounting company 3 2.2.2 Payment methods and salary calculating methods 3

2.2.3 Vouchers and accounts used 3

2.2.4 Accounting for salaries and bonuses 4

2.2.5 Accounting for payroll deductions 4

2.2.5.1 Social insurance 4

2.2.5.2 Health insurance 4

2.2.5.3 Unemployment insurance 4

2.2.5.4 Trade union fees 4

3.1 The evaluation of current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited 4

3.1.1 Advantages 4

3.1.2 Disadvantages 4

3.1.3 Causes 4

3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service Traning Company Limited 4

3.3.1 Improving payroll management 4

3.3.2 Adjusting salary calculation form 4

3.3.3 Improving training of manager and workers 4

3.3.4 Improving salary policy 4

3.2.5 Using reasonable bonuses policy 4

1 Rationale 8

2.Aims of the study 9

3.Subjects and Scope of the study 9

4 Methodology 9

5.Organization 10

1.1 Overview of Payroll and Payroll deductions 15

1.1.1 Definitions 15

1.1.1.1 Payroll 15

1.1.1.2 Payroll deductions 16

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions 17

1.1.2 Payroll methods 19

1.1.2.1 Job-base salary 19

1.1.1.2 Time-base salary 20

1.1.2.3 Other form of payroll 22

1.2 Accounting for payroll and payroll deductions 22

1.2.1 Definition and role of accounting for payroll, payroll deductions 22

1.2.2 Accounting for payroll 23

1.2.2.1 Vouchers used 23

1.2.1.2 Accounts used 24

1.2.3 Accounting for Payroll deductions 24

1.2.3.1 Social Insurance 26

1.2.3.2 Health Insurance 26

1.2.3.3 Unemployment Insurance 27

1.2.3.4 Trade union 28

1.3 Accounting books used 29

1.3.1 General journal 29

1.3.2 Journal Ledger 30

1.3.3 Journal Voucher 32

Diagram 3: Diagram of accounting for payroll and payroll deductions recorded in the Journal voucher form .33

1.3.4 General Journal Voucher 33

1.4 Factors influencing Salary and Salary deductions 34

1.4.1 Internal Factors 35

1.4.1.1 Supply demand of labor market 35

1.4.2 External Factors 35

1.4.2.1 Working environment of enterprise 35

1.4.2.2 Employees 36

2.1.1 Establishment and development of Thien Ung Training Service Accounitng Company Limited 38

2.1.1.2 The development of Thien Ung Training Service Accounting company Limited 39

2.1.2 The main activities and the organizations of Thien Ung Training Service Accounting Company Limited 40

2.1.2.1 The main activities of Thien Ung Training Service Accounting Company Limited 40

2.1.2.2 The organization of the company 41

2.1.3 The features of accounting system of Thien Ung Service Training Company Limited 43

2.1.3.1 The organization of accounting system 43

2.1.3.2 Accounting form, applied accounting policy and reporting system at the company 45

2.1.3.3 The feature in condition of using accounting software 48

2.2 The current situation of accounting for payroll and the payroll deduction at Thien Ung Service Training Company Limited 48

2.2.1 The features of labor, payroll and payroll deduction at Thien Ung Service Training Company Limited 48 2.2.2 Payment methods and salary calculating methods 52

2.2.3 Vouchers and accounts used 54

2.2.4 Accounting for salaries and bonuses 55

2.2.4.1 The policy of accounting for salaries and bonuses 55

2.2.4.2 Accounting procedures 57

2.2.5 Social insurance allowance for employees 80

2.2.5.1 Social Insurance regime .80

2.2.5.2 Social insurance allowance application 81

2.2.6 Accounting for payroll deduction 88

2.2.6.1 Social Insurance 88

2.2.6.1 Unemployment Insurance 88

2.2.6.3 Trade Union 88

2.2.6.4 The calculation payroll deduction at Thien Ung Service Training Company Limited 90

3.1 The evaluation of current situation of accounting for payroll and the payroll deductions at Thien Ung Service Training Company Limited 110

3.1.1 Advantages 110

3.1.2 Disadvantages 111

3.1.3 Causes 112

3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service Training Company Limited 112

3.2.1 Improving a clear allowance and subsidy regime 112

3.2.2 Improving management policy 112 3.2.3 Improving training of manager and workers 112

1.1 Overview of Payroll and Payroll deductions

1.1.1 Definitions

Labor: is the consumption of labor force in reality Labor is purposeful, conscious activities

of people to create products to serve the needs of society life Labor is the most typical and creative activity of man

The labor costs definition is the total cost of all labor used in a business It is one of the most substantial operating costs These are particularly important in any business which experience heavy human resource labor costs: construction, manufacturing, and other industries which have partially or non-automated operations These costs include 2 main subcategories The direct labor costs definition is summarized as the cost of labor which is used directly to make products Meanwhile, the indirect labor costs definition is simply explained as the cost of labor which is used to support or make direct labor more efficient Whenever a worker activity takes place, the enterprise must pay for all kinds of materials, attrition of tools and tools for production process and money paid to laborers Labor costs are one of the three cost factors that make up the value of products made by businesses High or low labor costs affect product costs Therefore, in order to manage production costs well, firstly, it is necessary to strictly control labor expenses and to manage wages from two basic criteria: quantity and quality of labor

1.1.1.1 Payroll

Payroll is the total of all compensation a business must pay to its employees for a set period

of time or on a given date It is usually managed by the accounting or human resources department of a business; small-business payrolls may be handled directly by the owner or an associate Increasingly, payroll is outsourced to specialized firms that handle

paycheck processing, employee benefits and insurance, and accounting tasks such as tax withholding

Laborers, after using their labor power to create products, shall be paid a certain amount

of wages On the other hand, we see that labor is exchanged for wages So labor can be considered a commodity, a special commodity And wages are the prices of those special goods, labor goods Because goods of labor need to be exchanged on the labor market on the basis of an agreement between the buyer and the seller, affected by the law of value, the law of supply and demand Therefore, labor prices will vary according to the price of the constituent elements as well as the supply-demand relation of labor Thus, when considering wages as the value of labor, this price will form based on an agreement between the employee and the employer Payroll may increase or decrease depending on the supply and demand of labor goods Thus, the price of wages often fluctuates but it must revolve around the value of labor power, as other common goods, it requires exactly of its value

On the other hand, the fluctuations in payroll must ensure the minimum living standards so that workers can survive and continue working

1.1.1.2 Payroll deductions

Payroll deductions are amounts withheld from an employee's payroll check, and these amounts are withheld by their employer Among these deductions are insurance pension contributions, wage assignments, child support payments, taxes, and union and uniform dues Deductions that are mandated are government taxes; however, all other deducted amounts are voluntary

No matter how many hours an employee has worked, payroll deductions must be withheld from payroll checks In the event that no deductions are withheld, the employer becomes liable and responsible for any mandated amounts that were supposed to be withheld When

an employee's insurance deductions are not withheld, the employer becomes liable to pay the deductions or to cancel the employee's insurance policy It is always an employer's responsibility to make sure any payroll deduction is withheld in a timely manner

Payroll deductions include:

of production and business

In addition to the payroll and salary deductions, the company has also built bonus regime for individuals with achievements in production and business activities Bonuses for stimulating employees in production and business activities include: emulation bonus, reward for improving product quality, saving materials and giving incentives for technical innovations, …

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions

 The role of accounting for payroll and payroll deductions

Payroll accountancy is one of the most essential accounting functions within an organization that demands unique set of skills for the management of payrolls of the company

Good accounting for payroll and payroll deductions helps the personnel management in disciplined manner Also, it creates a basis for enterprises to pay insurance allowances reasonably

Well organized accounting for payroll and payroll deductions not only helps manage salaries strictly, ensuring paying salaries in accordance with policies, but also is a basis for calculating the allocation of labor costs and business costs properly

 Tasks

The payroll and payroll deductions tasks include the following basic tasks:

-Organizing to record; reflecting and synthesizing data on the number of employees, time

of labor results; calculating wages and deduction of salary amounts, allocating labor costs according to the subjects of labor use

-Instructing and checking accounting staff in production and business departments and departments to implement the initial records of labor and wages according to the proper regime and methods

-Monitoring the situation of payment of salaries, bonuses and allowances for employees

- Making reports on labor, wages, salary deductions, periodically labor situation analysis, situation of management and spending of salary fund, providing information on wage labor for the department management in time

Payroll and payroll deductions is not only a noticable topic because it is an importance expenditure of the business but also a special concern for employees because this is their right Moreover, workers use wages to stabilize their daily lives, serving their daily necessities

- Function of supervising employees: Helping the employer through paying wages, inspecting and monitoring workers who work according to their topics, ensuring the wages paid as effective as possible

- Labor administration function: The function of ensuring the role of the labor coordinator

in a reasonable manner with the fair and satisfactory wage, the employee will voluntarily carry out the work assigned anywhere or anytime

1.1.2 Payroll methods

1.1.2.1 Job-base salary

Payroll by products based on products implies the payment of wages to employees based

on the quantity and quality of completed work products

Formula

Job - based

Rate per unit

Job – based salary form including:

+ Salary form based on products directly produced by direct labor

Salary paid to employees is calculated directly according to the number of finished products which reach quality standards

+ Salary paid for indirect labor

The salary is paid for indirect labors who have no physical association with the finished product or it’s impractical to trace the costs So, this form still has several limitations

However, there is a clear link between the value of the job performed to the company and the level of pay when applying this form So, it helps encourage employees to work harder and better to improve labor productivity as well as increase their salaries However, It is complicated to administer and expensive to operate This system is suitable to direct labors And such a system is most effective in the circumstance where jobs are clearly defined

1.1.1.2 Time-base salary

This is a form of payment for employees based on working time, wage level and wage scale This method is mainly applied to indirect workers, stable jobs or maybe even direct workers without product norms

In the enterprise, the payroll by time is applied to office staff such as administrative administration, labor organization, statistics, finance and accounting Time-based payment

is a form of compensation for employees based on their actual working time, occupations and professional and technical proficiency levels of employees Each occupation specific job characteristics that apply different wage levels Professional and technical proficiency divided into several wage scales, each salary level has a certain salary, which is the basis for payment of wages, wages over time can be divided

Time-based salary per month

As salary paid to employees by month, the wage level is calculated

over time is 1 month

Wage paid in months =

Minium wage

x

The actual number

of working days of employees in month

The number of working days in month

Time-based salary per week

Wages are wages for employees based on weekly wage and number of working days in a month

salary per day

Hourly rates can be calculated directly to pay hourly rates or based on daily wage for overtime allowances for employees

Wage paid by hour =

1.1.2.3 Other form of payroll

Payroll base on turnover is a form of payment / bonus whose income depends on the turnover achieved according to the sales target and the company's salary / bonus policy Usually applied to sales staff

There are many types of salary base on turnover

+ Personal salary and bonus

+ Group salary and bonus

1.2 Accounting for payroll and payroll deductions

1.2.1 Definition and role of accounting for payroll, payroll deductions

 Definition of accounting for payroll, payroll deductions

Accounting for payroll play a vital role in all companies with a staff of employees Both

small and large businesses alike must comply with local, state and federal laws specific to payroll reporting and compliance regulations In essence, payroll accountants act as liaisons that perform financial and reporting activities between a business organization, their employees and the government

Payroll and payroll deductions is not only a notice topic because it is an importance

expenditure of the business but also a special concern for employees because this is their right Workers use wages to stabilize their daily lives, serving their daily necessities

 The roles of accounting for payroll, payroll deductions

Payroll Accountanting and Payroll deductions cover a wide range of tasks that are

essential for timely, accurate and efficient payroll operations abiding by federal, state and local laws Payroll Accountants and payroll deducitons need to have a comprehensive understanding of fundamental tasks, such as paycheck calculations, taxation principles, preparing ledgers and journals, transfers and journal entries and deposits Their main role

is responsible for appropriate disbursement of funds, maintaining and updating employee leave balance information

1.2.2 Accounting for payroll

1.2.2.1 Vouchers used

Vouchers used in accounting for payroll and payroll deductions are made for the purpose

of monitoring the use of working time, payables for employees in enterprises such as salaries, wages, allowances, bonuses, working-trip allowances, overtime pay, payables for other organizations and some other content related to wages or labor

The accounting vouchers consist of:

- Form 01a – LDTL – Timesheet: is a method for recording the amount of a worker's time spent on each job by month or by week

- Form 02 – LDTL – Timesheet for overtime

- Form 03 – LDTL – Wage payment table: Each production group, each management department creates a wage payment table, which lists the names and the paid wage amounts of each person in the group

- Form 04 – LDTL – Bonus payment table: This table is made for each production group, each department, business division these payment tables are the basis for payment and deduction of other amounts such as social insurance, health insurance for workers

- Form 06 – LDTL – Overtime pay table

- Form 08 – LDTL – Exchange contract: This form is a contract signed between the employer and a person about the workload, working time, responsibilities and interests of each party when performing that job When the job is done, then the end of contract It is also a basis for paying wages to the contractor

1.2.1.2 Accounts used

Account 334: payable to employees

334: Account 334: payable to employees

This account is used to reflect the amount of money and the situation of the amount of payments payable to the personnel of enterprises about salaries, wages, bonuses, and other amounts which belongs to the personnel's income In enterprises this account is also used to reflect the wages to pay for outsourced employees

The structure and the content of reflection of the account 334

Debit Account 334 Credit

- Deductions of salaries and wages from the

employees’ salaries

- Salaries, wages, bonuses, social insurance

and other amounts which have been paid or

advanced to employees

- Amounts payable to employees such as salaries, wages, bonuses and social insurance

Debit balance (if any) shows overpay for

Form no 10-LDTL: The list remitted wages

Form no 11-LDTL: Allocation table wages and social insurance

 Accounts used

Account 338: "payable and submitted": used to reflect the amounts payable and submitted to legal authorities, organizations, social associations, for superior about the expenses of union, social insurance, health insurance, payroll deductions according to the decision of court (the money raising child upon divorce, legal costs, etc.) the value

of excess asset waiting to process, short-term bet, encash for someone, keeping money for someone

1.2.3.1Social Insurance

Social Insurance expense means that expense employers and employees pay to the

government so that people receive money when they are not able to work because of age, illness, etc.:

Under the current regime, social insurance is calculated that the rate of 25.5% of the total wage must be paid to employees in each period

In which:

- Employers must bear 17.5% of the total wage or salary included in production expenses

- Employees must bear 8% of the total salary by deduction into their salaries

Account 3383 – Social insurance: reflecting accruement and payment of social insurance

at units

1.2.3.2 Health Insurance

Health insurance expense is the expense incurred by a business to pay for its portion of

the medical insurance of its employees If the expense relates to employees in the selling and administrative area, the expense is charged in that portion of the income statement If

- Amounts of Social Insurance fees paid

to manage fund agencies of social

insurance

- Appropriating Social Insurance fees into operating expenses or salaries of employees;

Debit balance (if any) shows overpay for

employees

Credit balance shows salaries, wages

employees

the expense is instead related to employees in the production area, the expense is charged

to the cost of goods sold

Health insurance expense is 4.5% of the total wage payable to employees, in which:

- Employers must bear 3% and be included in production and business costs

- Employees must pay 1.5% by deducting from their salaries

Account 3384 – Health insurance: reflecting accruement and payment of health insurance

by units

1.2.3.3 Unemployment Insurance

Unemployment insurance expenses is the amount of money businesses must pay employees

when they suffer lost a job Under the current regulations, unemployment insurance is 2%

of the total salary payable for each accounting period, in which the employer pays 1%, which is included in the production and business costs, the employees bear 1% by deducting their salaries

Account 3386 – Unemployment insurance: reflecting accruement and payment of

unemployment insurance by units

- Amounts of Health Insurance fees paid

to manage fund agencies of social

insurance

- Appropriating Health Insurance fees into operating expenses or salaries of employees;

Debit balance (if any) shows overpay for

employees

Credit balance shows salaries, wages

employees

1.2.3.4 Trade union

Trade union fees

A trade union is an organization that has been formed by workers in order to represent their rights and interests to their employers, for example in order to improve working conditions or wages Therefore, Trade union fees is a grant fund for union activities at all levels

- According to the current regulations, that fees is deducted at the rate of 2% of the total amount

- Salary must be paid for each accounting period and included in the business and production expenses, including 1% for the grassroots trade union and 1% for the upper union

Account 3382 – Trade union fees: reflecting accruement and payment of trade union fees

by units

- Amounts of unemployment Insurance

fees paid to manage fund agencies of

social insurance

-Appropriating Unemployment Insurance fees into operating expenses

or salaries of employees;

Debit balance (if any) shows overpay for

employees

Credit balance shows salaries, wages

employees

accounting, where each transaction affects at least two accounts

Other names used for general journal are “journal book” and “book of original entry”

The process of making a journal entry

The first step in the process of preparing a journal entry is to analyze the accounts involved in a business transaction and then apply the rules of debit and credit 1based on the type of each account After identifying the accounts involved in the transaction and deciding upon the applicable rules, the journal entry is recorded in the general journal in a specified format which includes the following details:

1 Date of transaction

2 Ledger accounts involved

- Trade union fees disbursed at units;

- Amounts of trade union fees paid to

manage fund agencies of trade union

fees

- Appropriating trade union fees into operating expenses or salaries of employees;

- Overspending trade union fees which are granted additionally;

Debit balance (if any) shows overpay for

employees

Credit balance shows salaries, wages

employees

3 Amount of transaction

4 A brief narration to describe the transaction

Diagram 1: Diagram of accounting payroll and payroll deductions recorded in the

general journal form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.3.2 Journal Ledger

Journal – Ledger is a bookkeeping form in which arising economic transactions are combined and recorded in chronologic order and according to economic contents

GENERAL JOURNAL

Special

journal

Detailed books

General detailed reports

General ledger 334, 338

Trial Balance

Financial statements Wage payment table

(according to accounts) into a single general accounting book which is journal ledger Accountants or bookkeepers use accounting books such as journal ledger, subsidiary ledgers and base on accounting vouchers or a summary of vouchers in the same type to record these transactions They can make it easy to record, collate and check information and figures frequently However, because there is only a general accounting books (journal ledger), it makes difficulties for medium and large size enterprises in performing

a division of labor

Diagram 2: Diagram of accounting for payroll and payroll deductions recorded in

the Journal ledger form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

General table of accounting vouchers of the same type.

338

General detailed reports Journal Ledger

Financial statements Wage payment table

Diagram 3: Diagram of accounting for payroll and payroll deductions

recorded in the Journal voucher form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.3.4 General Journal Voucher

A general journal is the part of the accounting record keeping system in which

transactions are entered The four types of journals include sales, cash receipts, purchases, and cash disbursements

A general ledger is the account used to store and sort the balance sheet and income statement transactions Accounts included are cash, accounts receivable, investments, inventory, equipment, and land

In other words, a journal voucher makes entries into the general journal, whose

transactions are then used for the preparation of the ledger

Diagram 4: Diagram of accounting for payroll and payroll deductions recorded in

General journal voucher form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.4 Factors influencing Salary and Salary deductions

General table of accounting vouchers of the same type.

book 338

General detailed reports

General journal voucher

General ledger 334,

338

Wage payment table

Trial Balance

Financial Statements

Registration

book of

general

journal

1.4.1 Internal Factors

1.4.1.1 Supply demand of labor market

When the supply of labor is greater than the demand for labor, the wage tends to decrease, when the supply of labor is smaller than the demand for labor, the wage tends to increase, and when the supply of labor is equal to the labor demand The labor market is in

equilibrium The wage is now a balanced wage, which is broken when the factors

affecting the supply and demand of labor change such as (marginal productivity of labor, prices of goods and services )

When the cost of living changes, due to the change in prices of goods and services, real wages will change Specifically, when the cost of living increases, real wages will decrease Thus forcing units and businesses to increase nominal wages for workers to ensure stable life for workers, ensuring real wages are not reduced

1.4.2 External Factors

1.4.2.1 Working environment of enterprise

The policies of the business: the policies of wages, allowances, prices applied

thoroughly and appropriately will encourage employees to improve productivity, quality, efficiency, directly increase their income

The financial ability of an enterprise strongly affects wages For businesses with a large amount of capital, the ability to pay salaries for employees will be easy and convenient

On the contrary, if the financial capacity is not stable, the salary of the employee will be very precarious

The rational or unreasonable organizational structure also affects more or less the salary How is the management done, how to arrange the workforce to supervise and propose measures to stimulate the production process As the result, the efficient of production process by good organization structures affects salary regime

1.4.2.2 Employees

Labor qualifications: For highly qualified workers, there will be higher income than lower-level workers because to achieve that level, workers have to spend more power for their work or they have to take part in long-term training in schools or at the enterprise The enterprises are willing to pay high salary for the jobs which require a high level of knowledge and qualifications

In addition, working experience and work time often go hand in hand A person who has many years of experiences will gain a lot of experience, so they will limit the risks that may occur in the job and improve his sense of responsibility before the work to achieve high quality productivity As the results, their salary will be increasing Moreover, the ability of completing of the job is fast or slow, quality assurance or not, affects the wages

of workers immediately

In conclusion, payroll accounting and payroll deductions are affected by both internal and external factors, so companies should find a good accounting management

MINISTRY OF FINANCE ACADEMY OF FINANCE -

Thien Ung training service company limited

Major: English for Finance and Accounting

Student code: 165D2202010048

Ha Noi - 2020 CHAPTER 2 THE STUDY 2.1 Overview of Thien Ung Service Training Company Limited

2.1.1 Establishment and development of Thien Ung Training Service Accounitng Company Limited

2.1.1.1 The establishment of Thien Ung Training Service Accounting Company Limited Thien Ung Accounting Company was founded in 2013 by Mr Hoang Trung That With the desire to help students and those who do not really understand accounting, he cooperate with a number of lecturers who have been chief accountants, accounting experts and general accounting; all have many years of experience in accounting They create many interesting lectures, It really get attention from students In addition to teaching and training to help students with experience equivalent to 3-4 years of experience, the company also associates with a number of companies to give students the opportunity to experience internships and work at a number of companies

• Reputation is the most important asset of the Company;

• Ethics is the most important quality of its employees;

• Compliance and risk control

 The goal of the company

Support accounting students in the last year to practice at the Company: Instructing to make internships reports, select topics, provide data, stamp to confirm internships

Create favorable conditions for newly graduated accounting students, accountants to be exposed to practical accounting jobs, improve their professional skills, learn from experience from the former chief accountants

Training new accountant with high professional skills, who can master their own tax and financial statements

Advice to support and solve problems that businesses are having to deal with accounting books and Tax

Supporting business managers and leaders who can manage their business accounting system well, whether they are doing right or wrong

Provide free accounting resources with high professional skills for businesses, have experience in handling the actual accounting operations that enterprises are facing 2.1.1.2 The development of Thien Ung Training Service Accounting company Limited After 7 years of establishment, the company has expanded many branches and achieved many rewards.After 7 years of establishment and development, the company has affirmed its position in both teaching and accounting fields The company has been one of the leading accounting training centers in Vietnam and also one of the most prestigious accounting and financial consulting firms in Vietnam Up to now, the company has collaborated with many other companies and trained thousands of students, all of whom have leaved great feedback

2.1.2 The main activities and the organizations of Thien Ung Training Service Accounting Company Limited

2.1.2.1 The main activities of Thien Ung Training Service Accounting Company Limited

 Accounting Services

If the accounting department of the enterprises doesn’t have more experiences or the company is shortage accountant, they will hire external accounting services The company will do all the tasks relating accounting, which consists of reviewing and checking accounting books, balancing profit and loss, making annual financial statements for all types of enterprises

 Tax accounting services

Services help to manage tax accounting issues and focus on strategic tax aspects of the business Services include:

• Deferred tax validation projects

• Tax basis balance sheet support

• Remediation and restatement assistance

• Financial statement carveout support

 Issue-specific tax accounting consulting, including valuation allowance assessments, business combinations and etc

 Financial reporting services

It helps an organization or business mainly to analyze and evaluate the company’s financial performance in the previous financial years as well as how the company is doing quarter on quarter basis In simpler words, financial reports would provide the organization with an analysis of how the organization has performed in the past and how it is performing presently

 Teaching service