264. “ACCOUNTING FOR SALES AND DETERMINING BUSINESS RESULTS AT NEW AND NICE INTERIOR JOINT STOCK COMPANY”

MINISTRY OF FINANCE ACADEMY OF FINANCE 🙣🙣🙣 NGUYEN THI HUONG CQ55/21.02 CLC GRADUATION THESIS TOPIC: “ACCOUNTING FOR SALES AND DETERMINING BUSINESS RESULTS AT NEW AND NICE INTERIOR JOINT STOCK COMPANY” Major : Corporate Accounting Code : 21 Mentor : PhD Nguyen Minh Thanh Hanoi - 2021 Graduation Thesis Academy Of Finance DECLARATION I hereby declare this is my own research Data, results stated in the graduation thesis are honestly come from the actual conditon of company Student Nguyen Thi Huong Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance TABLE OF CONTENT Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance LIST OF DIAGRAMS Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance LIST OF IMAGES Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance LIST OF TABLES Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance LIST OF ABBREVIATIONS - Acc : Account - CIT : Corporate income tax - VAT : Value added tax - COGS : Cost of goods sold - FIFO : First in first out Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance PREFACE The importance of the research topic In the context of the world economy as well as the Vietnamese economy is constantly developing today, domestic enterprises always face difficulties and challenges Currently, businesses are constantly innovating to optimize production and business performance The fact shows that in order to increase the competitiveness of products in the market, in addition to improving product quality, diversifying product models and methods of customer service, it is especially important to pay attention operating accounting work, especially sales accounting in enterprises in general and in commercial enterprises in particular For businesses in general and commercial enterprises in particular, sales are considered extremely important Sales activities are frequently generated activities, accounting for a large amount of demand for goods management to be top priority In a trading company, sale accounting and business performance determination are an important accounting part to help managers make the right decisions and bring the best business results Starting from that, I would like to select the research topic "Accounting for sales and determining business results at New and Nice Interior Joint stock company Research purpose On the basis of theoretical and factual research at New and Nice Interior Joint stock company, I have a deep understanding of sales accounting and determining business results, given that Overview of the achievements and limitations in accounting work in general and revenue accounting and determining business results in particular Research Object Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance Accounting for sales and determining business results at New and Nice Interior Joint stock company Documents collected during the internship at the unit are basis for determining business results Research Methods Incorporating theory and practice, the concrete method is based on the theoretical basis of dialectical materialism from theory to practice - from reality to testing Moreover, applying some other methods such as systematization, interpretation, analysis The composition of the thesis My thesis consists of main chapters: Chapter 1: General theory on accounting for sales and determining business result in the enterprise Chapter 2: Accounting for sales and determining business result in New and Nice Interior Joint stock company Chapter 3: Some suggestions to improve accounting for sales and determining business result in New and Nice Interior Joint Stock Company I would like to express my sincere thanks to the teachers of accounting faculty at Academy of Finance, especially the lecturer – Phd Nguyen Minh Thanh, who kindly guided me to complete this thesis I also would like to thank the management and the accounting department of New and Nice Interior Co., Ltd who helped me with my internship at the company Thank you sincerely! Nguyen Thi Huong CQ55/21CL.02 Graduation Thesis Academy Of Finance CHAPTER 1: GENERAL THEORY ON ACCOUNTING FOR SALES, AND DETERMINING BUSINESS RESULTS IN ENTERPRISES 1.1 Importance of accounting for sales and determining business result in the enterprise 1.1.1 Definition of sales and determining business result 1.1.1.1 Definition of sales Selling is the process in which the seller transfers the ownership of goods to the buyer in order to collect money or collect money from the buyer In a commercial enterprise, selling is the last, most important step of the business process From an economic perspective, selling is the process in which the enterprise's goods are converted from a physical form (commodity) to a monetary form (money) In general and commercial services enterprises in particular, the sales process has the following main characteristics: - There is an exchange agreement between the buyer and the seller The seller agrees to sell, the buyer agrees to buy, the buyer pays or accepts to pay - There is a change in ownership of goods: the owner loses ownership and the buyer has ownership of the purchased goods - In the process of selling certain goods and getting back from customers an amount called sales of goods This is the basis for enterprises to determine their main business results 1.1.1.2 Definition of business result Business results are the final results of business activities arising in the accounting period, which are the quality criteria for evaluating the Nguyen Thi Huong 10 CQ55/21CL.02 114 So, the company should have delivery note when rotating documents between departments to minimize cases of document loss as well as identify the person to handle  Solution 2: Because the commercial company does involve a large part of sales operations, the company should separate the sales accounting from the tax accountant to facilitate tracking The company should recruit more accountants to track receiving orders from customers, and improve the level of accountants  Solution 3: The company is putting the entire value of vouchers on unrealized revenue items, including both expired and unexpired vouchers Such recognition is not in compliance with VAS 14 "Revenue and other income" which lead to inaccuracy of Revenue item on the Income statement According to VAS 14 “Revenue and other income”, revenue from service transactions is recognized when the outcome of such transactions can be measured reliably In case a transaction involving the rendering of services is attributable to several periods, revenue is recognized in each period by reference to the percentage of completion of the transaction at the balance sheet date of that period The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied: (a) The revenue is determined reliably (b) There is a possibility of obtaining an economic benefit from transaction that provides the 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 complete the transaction to provide that service " Nguyen Thi Huong 114 CQ55/21CL.02 115 According to this standard, the expired vouchers of the Company at the balance sheet date are determined as the completed work The company should record the value of the expired vouchers in the sales made in the period, the unexpired part, the company continues to hang on account 3387 The accounting entries are as follows: Diagram - Revenue recognition of expired vouchers  Solution The profit from the consumption of each type of product are not accurately reflected because there is no allocation of selling and administrative expenses for each item It causes the lack of a source of information contributing to build an appropriate business strategy The company should monitor and allocate selling and administrative expenses according to each group of goods and each type of service provided to accurately reflect the profit from the consumption of each type of product or service That helps provide more information for the board of managements in making the business strategy such as: selecting the most profitable items, selecting the most effective investment plan, balancing revenues and expenditures, etc On the other hand, the account system plays a very important role in accounting, and to match its characteristics, the enterprise should consider, organize the account system appropriately and reasonably If the accounts Nguyen Thi Huong 115 CQ55/21CL.02 116 opened in detail are coupled with the specific accounting objects of the business, the recording will become more scientific and convenient In order to provide sales information, the Company should build a more specific and detailed list of accounts for each item When being recorded in detail, the company can realize that revenue fluctuation mainly comes from which products, the company will decide to adjust resources accordingly The detailed recording of the product portfolio will bring real efficiency when the accountant has expertised in analyzing revenue fluctuations over the period, has combined with the sales department to advise the company's main products in the next period for the management board to make appropriate decisions  Solution 5: In fact, not all customers pay immediately or have them if payment is delayed, the payment is made on time So to be proactive more in the use of business capital and ensure the principle of prudence Accounting work, provision must be made for late recoverable debts or cannot be recovered into administrative expenses in the period Besides that the company must come out if the time limit is exceeded, but the company gives more time The customer is subject to an interest rate equal to that of the bank loan Hence work using Account 229 (3) "Provision for doubtful debts" is necessary Method of accounting for several major transactions: (According to Circular No.133/2016/TT – BTC) - If the provision for bad debts to be set up is higher in this accounting period the unused provision for bad debts set up in the previous accounting period has not been used After all, the accountant shall make additional deductions for the difference and record: Nguyen Thi Huong 116 CQ55/21CL.02 117 Debit Acc 642 – Administrative expense (6422) Credit Acc 229 – Provision for asset (2293) - If the provision for bad debts to be set up in this accounting period is smaller the unused provision for bad debts set up in the previous accounting period has not been used At the end, the accountant shall refund the difference and record: Debit Acc 229 – Administrative expense (2293) Credit Acc 642 – Provision for asset (6422) - For bad debts, which have been written off, if later that debt recovery is recovered, accounting based on the actual value of debt recovered ecorded: Debit Acc 111, 112 Credit Acc 711 – Other income - For longer debts, the higher the risk and the rate of provisioning room will also be tall That is why the company should have an appropriate rate for the appropriation long-term debts The enterprise must anticipate the likely loss level or the overdue debt age of the debts and conduct a provision for each of doubtful debts, together with evidence proving that bad debts as above After setting up a reserve for each doubtful debt, the enterprise shall sum up the entire debt reserve into the detailed list as a basis for accounting into its expenses (According to Circular No.49/2019/TT – BTC) At the time of making annual financial statements, if the receivable debts are determined as bad ones, the enterprise must set up a provision according to the following level of appropriation: + - For overdue receivables, the level of setting up of provisions is as follows: 30% of the value for debts overdue from months to less than year 50% of the value for debts overdue from year to less than years 70% of the value for debts overdue from year to less than years 100% of the value for a receivable debt of years or more Nguyen Thi Huong 117 CQ55/21CL.02 118 + For enterprises providing telecommunications services and goods retailing enterprises, debts receivable from telecommunications services, information technology, postpaid television and receivable debts from retail goods in the form of deferred payment / installment payment of individual debtors that are + overdue as follows: 30% of the value for debts overdue from months to less than months 50% of the value for debts overdue from months to less than months 70% of the value for debts overdue from months to less than 12 months 100% of the value for a receivable debt of 12 months or more For receivable debts which are not yet due but the enterprise has collected evidences to identify that the economic organization has gone bankrupt, has opened bankruptcy procedures, and has fled from the place of business; the debtor is being prosecuted, detained, tried by law enforcement, is serving a sentence or suffering from a serious illness (certified by the hospital) or has died or the debt has been ordered by the enterprise serving sentences but unable to be performed due to the debtor fleeing his / her residence; if the debt has been sued by the enterprise for debt collection but the case has been suspended, the enterprise shall self-estimate the amount of irrecoverable loss (maximum equal to the value of the debt being monitored in the accounting book) for making deductions preventive 3.3.1.2 Solutions for Management accounting in New and Nice Interior Joint Stock Company The company should hire an accountant who specializes in management accounting for sales, so he/she will prepare sales management reports and revenue estimates every month, every year From that, the company will make the right decisions regarding the sales policy, price of products in the next period The jobs that management accountants for sales need to know are as followed: - Prepair Sale Budgeting Nguyen Thi Huong 118 CQ55/21CL.02 119 The various stages of preparing a sales budget: + Decide the period of Sales Budget: A sales budget can be planned accurately if a specific period is determined It can be made monthly, quarterly or yearly + Collect Previous Sales Data: The next step is gathering the sales data or record for the previous period It acts as a base to plan a sales budget for future sales + Gather Industry’s Sale Information: The company needs to be updated with the total sales of the particular industry for a specific period It should be aware of its market share and the expected growth of the industry within that period + Compare sales of consecutive period: After collecting the sales records, a comparative analysis is required of the previous sales periods to predict the future sales possibilities + Study current market trends: Next step is keeping an eye on the market fluctuations, preference and trend which helps in determining a more accurate sales budget + Communicate with customers: The customer reviews and buying habits should be analyzed to know their buying trends and intentions for preparing a sales budget + Prepair sales forecase: Based on the above data and analysis regarding past sales, market trends and customer’s response, sales for a particular period is forecast + Compare actual sales with the Forcast: Finally, the actual performance or the sales volume is compared with that of the estimated sales to find out the accuracy of the sales budget It provides for taking the corrective measures in future Nguyen Thi Huong 119 CQ55/21CL.02 120 + Factors influencing Sales Budget -Pricing decisions Whether pricing strategy is simple or complex, a business must: + Understand its customers and how price influences their purchasing decisions + Know what competitors are offering and what they charge for their products and services + Adjust quickly to changes in markets, vendors and customers + Help customers understand why its products or services are priced as they are + Be able to negotiate with wholesalers, retailers and other suppliers and resellers + Track how pricing affects sales 3.3.2 Conditions for implementing solutions - The company needs a team of accountants who not only master economic transactions, economic laws, corporate finance but also have an understanding of accounting software in analyzing, reflecting and handling economic transactions arising at the company and making financial statements Moreover, the accountant must be a responsible person, well performing the assigned tasks Ensuring to provide accurate, complete and timely information of all aspects of the company's economic and financial activities, timely serve the direction of the business process - The company has to upgrade accounting software, document system to be able to manage increasing large sales - The company needs to raise accounting awareness of management accounting in sales and determining business results Nguyen Thi Huong 120 CQ55/21CL.02 121 Nguyen Thi Huong 121 CQ55/21CL.02 122 CONCLUSION OF CHAPTER Chapter presented the development orientation of New and Nice Interior Joint Stock Company in the near future and the requirements for improving accounting for sales and business results at the company And, based on the current situation of accounting for sales and determining business result in New and Nice Joint Stock Company Chapter has also set out specific solutions and made recommendations to the relevant limitations New and Nice Joint Stock Company aims to improve revenue, expenses accounting and business results determination, creating favorable conditions for the development of the company in particular and the development of the economy in general Nguyen Thi Huong 122 CQ55/21CL.02 123 CONCLUSION In current business conditions with the market economy, to stand firm and develop constantly is a very difficult problem for every business Accounting is an important tool of economic and financial management of enterprises In accounting, the determination of business results accurately, completely and quickly is very important Based on the business results, the enterprise has a business strategy which is effective and maximize profits New and Nice Joint Stock Company from its establishment until now has been growing up, overcoming the difficulties and challenges of the integration period and the effects of inflation, etc And now the company has affirmed its image and reputation in the marketplace The key lead to today's success is due to the management ability of the Board of management, who are clear-headed, captures the information timely, quickly and accurately combined with strong professional qualifications with the dynamism and creativity of the employees brought the company quickly integrated into the modern business environment Through the internship, I have gained many useful lessons, comparing the reality in the company and the theory learned in school Accounting in general and accounting for revenues, expenses and business results in particular are relatively complete Although my professional knowledge and practical experience are still limited, I want to make suggestions to improve the accounting in accordance with Vietnamese accounting standards However, due to the limited time for learning and the inadequate level of professional knowledge, my thesis could not avoid shortcomings or invalid ideas The thesis has systematized the general theoretical issues about accounting from the perspective of financial accounting such as: • Definition, classification and recognition of accounting for revenue, expense and business results Nguyen Thi Huong 123 CQ55/21CL.02 124 • The accounting principles governing accounting for revenue, expenses and • business results in enterprises Accounting for revenue, expenses and business results in enterprises • (documents, accounts used, accounting entries, etc.) Organisation of book keeping system for revenue, expenses and business results accounting After studying the current situation of accounting for revenue, expenses and business results at New and Nice Interior, JSC from the perspective of financial accounting, the thesis gave the achievements and limitations such as: About achievements: • The account system in accounting is relatively reasonable and flexible Currently the company is using the account system under Circular 133 issued • on 26/08/2016 The rotation of documents in the company is done reasonably, documents are checked, signed and stored in the relevant departments The company organized a good accounting system, among the accounting operating sections, there are reconciliations between the books of accounting sections Accounting books and vouchers are clear and complete, they are promptly meet the requirements of the director and authorities when information is • needed The accounting apparatus of the company is organized neatly Each employee in the company's accounting department has experience and a high sense of responsibility for the assigned work Besides that, the tasks are assigned clearly and specifically, thereby promoting creation as well as sense of • responsibility in the work of each person New and Nice Joint Stock Company is applying MISA 2019 accounting software technology to the accounting process The use of accounting software helps to reduce the manual workload of accountants Therefore, the provision of financial information is timely and at the same time increases Nguyen Thi Huong 124 CQ55/21CL.02 125 productivity, enhances the effectiveness of business management in general and sales management in particular In the context that the organization of machine accounting in the form of General journal, which the company is applying, is appropriate It is timely meeting the information needs for related departments The bookkeeping system is implemented on the machine, so the information is stored tightly, data is less confused than manual accounting It is easy to check the data when necessary and there is a consensus between • accounting sections The company has fully applied the financial and accounting regimes which are issued by the Ministry of Finance Accountants opened level accounts, level accounts, etc which are suitable to the situation and characteristics of the company Since then, it has reflected more detailed, more specifically the fluctuations of the company's assets and helps accountants more convenient to record accounting entries in a simple, clear and convincing way It is also partly reducing the accounting workload, avoiding overlapping accounting records Documents are systematically classified according to each economic operation, arising time, etc and aggregated to store monthly It is convenient for searching, checking and comparing when necessary The recognition of revenue from services rendered is carried out in accordance with the principle, at the same time, it fully reflects revenues, expenses and tax identification creating favorable conditions for determining • business results Accounting books and reports of the Company include the required books and reports according to current regulations With the support of the accounting • software, the books and reports are made quickly and promptly Currently, New and Nice Joint Stock Company is applying centralized accounting organization The application of this form of accounting is reasonable, consistent with the company's centralized organizational model Nguyen Thi Huong 125 CQ55/21CL.02 126 • About limitations: Selling and administrative expenses at the company are not allocated according to each group of goods and each type of service provided, so it does not accurately reflect the profit from the consumption of each type of product or service It causes the lack of a source of information contributing to build • an appropriate business strategy Basically, every document is rotated between departments in the correct order However, there is no delivery note between departments, so when the loss of • documents occurs, it is difficult to know who is responsible for handling The company is putting the entire value of vouchers on unrealized revenue items, including both expired and an expired vouchers Such recognition is not in compliance with VAS 14 "Revenue and other income" which lead to inaccuracy of Sales item on the Income statement Based on the above limitations, the thesis has proposed some complete solutions such as: • The company should monitor and allocate selling and administrative expenses according to each group of goods and each type of service provided to accurately reflect the profit from the consumption of each type of product or • service The company should have delivery note when rotating documents between departments to minimize cases of document loss as well as identify the person • to handle The company should record the value of the expired vouchers in the sales made in the period, the unexpired part, the company continues to hang on account 3387 In the end, I would like to express my sincere thanks to my instructor Phd Nguyen Minh Thanh, the teachers in the Accounting major of Academy of Finance and the departments in New and Nice Joint Stock Company for helping me complete this thesis, and I hope to receive the guidance of Nguyen Thi Huong 126 CQ55/21CL.02 127 teachers and staffs in the accounting department at New and Nice Joint Stock Company to improve it Many thanks for your attention! Ha Noi, January 2021 Student Nguyen Thi Huong Nguyen Thi Huong 127 CQ55/21CL.02 Graduation Thesis Academy Of Finance REFERENCES Circulars 133/2016/TT-BTC, Ministry of Finance Accounting curriculum, Academy of Finance Vietnamese accounting standards, Financial Publisher Financial report Year 2019 of New and Nice Interior Joint Stock Company Documents of New and Nice Interior Joint Stock Company Graduation Thesis of previous senior students A number of specialized magazines Finance and Accounting Website https://ketoanthienung.net/ https://www.webketoan.vn/ http://thuvienphapluan Nguyen Thi Thu Huong 128 CQ55/21CL.02 ... for sales and determining business result in New and Nice Interior Joint stock company Chapter 3: Some suggestions to improve accounting for sales and determining business result in New and Nice. .. Accounting for sales and determining business results at New and Nice Interior Joint stock company Documents collected during the internship at the unit are basis for determining business results. .. sales and determining business results presented in Chapter create a premise to assess the current situation of accounting for sales and determining business results at New and Nice Interior Joint