INTRODUCTION 1. The urgency of the research topic In recent years, it has been a milestone marking the great transformation of Vietnams economy. Along with the expansion of the economy, Goverment have launched many guidelines and policies to develop a multisector economy, expand to exchange and cooperate in the vast economic market. Especially the event that Vietnam joined the World Trade Organization, opened up many development opportunities for businesses, but also had many difficulties and challenges. Before that situation requires businesses to try their best to survive and develop. Like other businesses, trading and services enterprises are not only affected by the law of value but also influenced by the law of supply and demand and the competition law. When products of enterprises are accepted by the market means that the value of the product is realized, at this time, the enterprises will collect amount of money, which is called revenue. If the revenue can compensate expenses, then the rest is called profit. Any business when activiting also wants to achieve the maximum profit. Most of the trading and services enterprises, the revenue is mainly due to process of consuming goods and service. Therefore, determining business results will play an important role in determining the performance of enterprises. Therefore, during the internship at Viet Nhat Food Joint Stock Company, I chose the topic: Accounting for revenue, expenses and determine business results at Viet Nhat Food Joint Stock Company.” to make the graduation thesis for me.
GENERAL THEORY OF ACCOUNTING FOR REVENUE,
GENERAL THEORY OF REVENUE, EXPENSES AND BUSINESS
1.1.1 Importance of accounting for revenue and business result in
In today's market economy, businesses prioritize effective operations to maximize profits and minimize costs Key factors influencing a company's profitability include revenue, income, and expenses Consequently, organizing accounting for revenues, costs, and business results is crucial, not just for business executives but also for various stakeholders within the national economy.
For investors, accurately accounting for revenue and expenses is essential for assessing the operational efficiency of a business, enabling informed investment decisions.
Financial intermediaries, including banks and financial leasing companies, must meticulously account for revenues and expenses to effectively evaluate their financial standing This thorough assessment is essential for corporate finance decisions regarding investment amounts and durations.
For macroeconomic management agencies, accurately accounting for turnover and expenses, as well as determining business results, is essential for state policymakers This data synthesis and analysis provide critical parameters that empower the government to regulate the economy effectively at a macro level and ensure the correct calculation of corporate income tax obligations for enterprises.
Currently, there are many views and interpretations of revenue, below the thesis will give some concepts about revenue.
According to the international accounting standard IAS18 defines Revenue as
The gross inflow of economic benefits during a specific period results from an entity's ordinary activities, leading to increases in equity that are not related to contributions from equity participants, as outlined in Article 78 of Circular No 200/2014/TT-BTC dated December 22.
In 2014, guidelines for accounting policies defined revenue as the economic benefit that enhances a company's equity, excluding shareholder contributions Revenue recognition occurs at the time a transaction takes place, provided it is certain that economic benefits will be received, which is assessed based on the fair value of the amounts involved, irrespective of the payment status.
The turnover of a service enterprise refers to the total revenue generated from goods and services offered to customers within a specific timeframe It's important to note that not all financial transactions that enhance cash flow and assets contribute to increased revenue, and revenue alone does not solely determine the changes in a business's equity.
For service-providing enterprises, revenue arises from various activities, including: revenue from sales and services; revenue from financial activities; other revenue.
Revenue encompasses various concepts, but fundamentally, it represents the total benefits generated from an enterprise's production and business activities during a specific accounting period Accurately understanding the nature of revenue and properly determining the scope, timing, and basis for revenue recognition is crucial for ensuring the objectivity and accuracy of turnover criteria in financial statements This, in turn, aids enterprises, especially service-oriented ones, in making informed business decisions.
To manage revenue well, businesses can conduct revenue classification in the following ways:
Classify revenue according to relationship with business organization system
Classified by this criterion, revenue includes two types: internal sales revenue and external sales revenue.
Internal sales revenue refers to the economic advantage derived from the sale of goods and services between affiliated units within the same company or corporation, calculated based on the internal selling price.
- External Sales revenue is the economic benefits derived from the sale of goods, products, providing services to customers outside the enterprise's scope.
Classifying revenue based on specific criteria enables an enterprise to accurately assess its business performance, leading to informed decision-making in selecting effective business strategies.
Classify revenue according to geographic area
According to this criterion, enterprise's revenue includes:
Domestic revenue: is the revenue from sales and service provision in the country.
International revenue: is the revenue from sales and service provision arising abroad.
Classifying geographic areas enables administrators to evaluate activity levels, assess profitability, and identify business risks for each region This classification serves as a foundation for managers to develop informed business strategies and decisions Additionally, it supplies essential data for preparing the partial financial statements of each enterprise.
Classify revenue according to their sources
Revenue from sales and services refers to the total receivables generated during a specific period from the sale of goods and the provision of services by an enterprise For businesses offering public services, this revenue also encompasses state subsidies received when they deliver services assigned by the government, even in cases where revenue recovery is inadequate.
- Revenue from financial activities is the revenue from interests, royalties, dividends, divided profits and other financial activities revenues considered to be performed in the period, including:
Interest: Loan interest; interest on bank deposits; deferred sales interest; installment; interest on investment in bonds, treasury bills; payment discount enjoyed by payment of goods before the due date;
Income from short-term and long-term securities purchase and sale activities;
Income from other investment activities;
Differences due to sale of foreign currencies;
Difference of capital transfer interest;
Revenues from other financial activities
- Other income: is the income that contributes to the increase in owner's equity from activities other than the activities that generate revenue of the enterprise.
Classify revenue according to sales method
According to this expenditure, enterprise's revenue is divided into the following categories:
-Wholesale Revenue is the whole turnover of the volume of products, goods sold to other agencies and units for the purpose of continuing to sell or process production.
- Retail revenue is the total turnover of products and goods sold to other agencies, units and individuals for consumption purposes.
- Revenue from agency sales is the whole turnover of goods consigned under agents under signed contracts.
Classifying revenue based on product types enables businesses to assess total consumption effectively, facilitating better inventory management This approach aids in planning product rotation and ensuring adequate stock levels, thereby preventing stagnation or shortages that could negatively impact business operations.
Specific rules for recognition of revenue from sales of goods (VAS 14):
- The entity has transferred to the buyer the significant risks and rewards of ownership of the goods;
- The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
- The amount of revenue can be measured reliably;
- It is probable that the economic benefits associated with the transaction will flow to the entity; and
- The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Specific rules for recognition of revenue from service provision:
- Turnover is determined with relative certainty;
- It is possible to obtain economic benefits from the service provision transaction;
- The work volume finished on the date of making accounting balance sheet can be determined;
- The costs in curred from the service provision transaction and the costs of its completion can be determined.
A trade discount is a monetary reduction offered by a seller to customers who purchase goods and services in bulk, as per the agreement between the seller and the buyer This discount incentivizes larger purchases and fosters customer loyalty.
Sales returns refer to the goods sold that are returned for various reasons, including breaches of contract, incorrect quantities, or issues with quality and specifications.
Sales allowance is a reduction made when the goods are not the same specification as those mentioned in the economic contract.
ACCOUNTING FOR REVENUE, EXPENSES AND BUSINESS
1.2.1 The accounting principles governing accounting for revenue, expenses and business results in enterprises
Under the accrual accounting principle, all economic and financial transactions concerning assets, liabilities, equity, revenues, and expenses must be recorded when they occur, rather than when cash is received or paid This method ensures that financial statements accurately represent the enterprise's financial position over time, reflecting its past, present, and future status.
According to this principle, Revenue earned should be matched with the corresponding cost/expenditure incurred to generate this income.
Prudence means to be cautious when exercising judgement In particular, profits should not be recognized until realized, but a loss should be recognized as soon as it is foreseen
Material information is crucial as its absence or inaccuracy can substantially misrepresent financial statements, influencing the economic decisions of users The concept of materiality is determined by both the significance and nature of the information or errors in a specific context, requiring evaluation from both quantitative and qualitative perspectives.
1.2.2.1 Accounting for revenue from sales of goods and services.
- VAT invoice or commercial invoice
- Other documents which relating to providing goods or rendering services.
Account 511- Revenue to record revenue from sale of products, goods and supplying of services in the accounting periods This account has some sub- account:
-Account 5111- Goods sale: to record sales and net revenue of goods those have been sold during the period;
- Account 5112- Finished product sale: to record sales and net sales revenue of products (finished goods, unfinished goods) self manufactured by the business; which have been sold during the period ;
- Account 5113- Service sale: to record revenue and net revenue from services which provided to customers those have been sold during the period.
- The accounting book is used to present revenue of sale of goods and services is ledger of account 511
(1) Revenue from sales of goods and services
(1b) Payable taxes when selling goods and providing services
Net sales represent the total revenue a company generates after accounting for returns, allowances for damaged or missing goods, and any trade discounts This figure is crucial as it reflects the actual sales performance reported in a company's financial statements.
A trade discount is a financial incentive offered by sellers to customers who purchase goods and services in large quantities, reflecting an agreement to reduce the list price Although the trade discount lowers the initial price, the purchaser is ultimately accountable for the invoice price, which is the list price minus the applicable discount According to international accounting standards, trade discounts are not recorded in accounting records, as they are not deemed part of the sale due to the transaction being based on the reduced price.
Sales Returns and sales allowances:
Sales returns and sales allowances are technically two distinct types of transaction, they are generally recorded in the different account.
Sales returns happen when customers send back defective, damaged, or unsatisfactory products to the seller On the other hand, sales allowances take place when customers decide to keep the merchandise in exchange for a discount on the selling price.
When a customer returns goods, the seller may give a cash refunds and credit notes A credits note reduces the amount owed by the customer.
Cash refunds and credit notes are recorded as sale return or sale allowances on the books of the seller.
According to Circular 133/2016/TT-BTC, Revenue deductions are recorded directly in the Debit side of account 511
The accounting book is used to present revenue deduction is the arising of debit side in ledger of account 511.
Financial income includes economic benefits gained by the business from financial activities during the accounting period.
As regulated by VAS No 14, financial income will be recognized if it is probable that the business will gain economic benefits from the transaction
Financial incomes encompass various sources, including interest income from loans and deposits, capital gains from selling financial investments, dividends and profits distributed from investments, gains from foreign exchange differences, cash discounts received, and other forms of financial income.
Under Vietnamese accounting system uses account 515- Financial revenue is used to record financial revenue incurred during the accounting period.
(1) Transfer of revenue from financial activities
(2) Dividends and profits are divided after the first day
(4b) Interest in selling foreign currencies
(5a) Assigning and recovering financial investments
(6a) Purchase of supplies, goods, assets and services in foreign currency (6b) Exchange rate gains
(7) Gradual allocation of interest due to sales on deferred or interest payments
(8) Exchange rate gains due to the revaluation of foreign currency balances at the end of the period.
Other income is income other than sale income of the enterprise arising in the accounting period
Other income encompasses various sources, including proceeds from the sale of fixed assets, gains from the revaluation of materials and goods used for investments in associates or long-term assets, and compensation received from customers for contract breaches It also includes tax refunds from the State Budget, unidentified accounts payable, sale-related tips or awards from suppliers, and gifts or donations in cash or kind from organizations and individuals.
- Receipts and other original documents
Under Vietnamese accounting system, account 711- other income is used to record other income incurred during the accounting period.
- The accounting book is used to present other revenue and other expensesare ledger of account 711.
(1) Collecting penalties for customers who breach contracts and insurance organizations
(2) Obtaining bad receivables that have been written off
(3) Penalties deducted from deposits and bets
(4) Receiving grants, donating materials, goods and fixed assets
(5) Taking into account other income liabilities cannot be determined
(6) Reduced import and export taxes, excise taxes, and environmental protection taxes
(7) Value of donated goods and services (without conditions for purchasing or using other goods and services)
(8) Transfer other income into account 911
1.2.3.1 Accounting for Cost of good sold
According to VAS 2- Inventory, cost of goods sold can be calculated by the flowing methods:
The nominal price method is utilized according to the actual value of each purchased item, making it suitable for businesses with a limited number of products or those that offer stable and consistent items.
Under this method, products, supplies and goods in stock of any imported lot shall be taken into account for the unit price of warehousing of such goods for calculation.
The advantages of this approach lie in its adherence to accounting principles, ensuring that actual costs align with generated revenues By valuing inventory based on its actual selling price, it accurately reflects the true value of inventory in relation to the revenue it produces.
The application of this method has notable disadvantages, as it requires strict conditions that are only met by businesses with a limited variety of high-value inventory This approach is suitable for companies dealing with stable goods or new inventory types, while businesses with a diverse range of products may find this method inapplicable.
• According to the weighted average price at the end of the period
This method is ideal for businesses that have a limited variety of products but engage in frequent import and export activities It calculates the average price per unit of goods based on the actual prices at the start of the period.
Average unit Actual value at the beginning of the period + Value price for the
= of imported goods in the period w h o le rese rv e T h e a m o u n t o f th e beg in n in g p e rio d + the am o u n t period en tered in th e p erio d
At the end of the accounting period, the capital value of exported goods is determined by considering the enterprise's reserve period Inventory accounting utilizes the input price and the beginning and in-period inventory amounts to calculate the average unit price.
Advantages: Simple, easy to do, only need to calculate once at the end of the period.
The method has notable disadvantages, including low accuracy and a month-end calculation process that disrupts other operational areas Furthermore, it fails to provide timely accounting information during transactions, which is essential for effective decision-making.
• According to the weighted average price after each entry (average time, instant)
After recording the entries of products, supplies, and goods, it is essential for the accountant to reassess the actual value of the inventory along with the average unit price The average unit price can be determined using a specific calculation formula.
A ve rage u n it Actual value after each entry price after = Number of inventory after each entry each entry
Advantages: This method overcomes the disadvantages of the above method, both accurate and constantly updated.
Disadvantages: This method takes a lot of effort, calculating many times.
Therefore, this method is applied in enterprises with few categories of inventories, with low volume of import and export.
- First-in, First- out method
The first-in, first-out (FIFO) method operates under the principle that the oldest inventory items are sold or used first, ensuring that the remaining inventory reflects the most recently purchased or produced goods This approach helps businesses accurately assess their inventory value by prioritizing the costs associated with earlier acquisitions.
ORGANISATION OF BOOKKEEPING SYSTEMS FOR REVENURE, EXPENSES AND BUSINESS RESULTS ACCOUNTING .43 1 General journal form of bookkeeping
REVENURE, EXPENSES AND BUSINESS RESULTS ACCOUNTING
1.3.1 General journal form of bookkeeping
In this accounting method, all economic and financial transactions of the enterprise must be systematically recorded in the general journal over time, following the appropriate accounting principles for each operation Subsequently, the data from the general journal is transferred to the corresponding ledger to accurately reflect the business activities.
This way of recording an accounting book requires the following types of books:
“General Journal - Special Journal - Ledger - Detailed accounting books and cards.”
- Advantages of the General journal form:
+ The book form has a simple structure, which is easy to record and convenient for assigning jobs to accountants.
+ Convenient for information technology application in bookkeeping.
+ It is possible to check and compare with the figures in the General Journal at any time.
Diagram 12 : Order of bookkeeping in the form of General
Accountants should daily reference selling expense vouchers to accurately document transactions in the general journal Subsequently, these recorded figures must be transferred to the Ledger for accounts 511, 632, 155, 156, and 641 to ensure proper financial tracking and compliance.
Simultaneously, while maintaining the general diary, all transactions are documented in the sales detail book, the production and business costs detail book, and various other detailed records.
(2) At the end of the month, add the data book on ledger TK 511, 632, 155,
156, 641, 641, 521, 157 for all arising accounting data.
Total data on detailed books Acc 511, 632, 155, 156, 641, 641, 521, 157 for recording in the Summary Table.
Collation between the Summary of details and the ledger Acc 511, 632, 155,
(3) After checking and matching the figures recorded in the ledger, detailed book Acc 511, 632, 155, 156, 641, 641, 521, 157, 911 and the Summary of details are used to prepare the financial statements.
The foundation of book entry is established through a voucher, which serves as a key document Bookkeeping involves two main tasks: first, the chronological recording of vouchers in a register, and second, the accurate reflection of their economic content in the ledger.
This way of bookkeeping will need to use the following types of books:
+ Register of book entry vouchers
+ Detailed accounting books and cards
Diagram 13: Order of bookkeeping in the form of journal voucher
Every day, based on the vouchers of cake costs that have been checked and used as a basis for book entry, accountants make entry vouchers.
Based on the entry voucher to record in the register voucher register, it is then used to record in the ledger acc 511, 632, 155, 156, 641, 641, 521, 157.
Once utilized for creating accounting vouchers, sales vouchers must be documented in the goods detail book, sales detail book, production and business expenses detail book, and other relevant detailed records.
At the end of each month, compile the total transactions recorded in the accounting vouchers, and calculate the overall amounts for debts, credits, and account balances for accounts 511, 632, 155, 156, and 641.
Summarize the data on the detailed books acc 511, 632, 155, 156, 641, 641,
521, 157 to record in the Detailed Summary Table.
Collation between the Summary of details and the ledger acc 511, 632,156,
(3) After comparing and matching the figures recorded in the ledger of the total figures in the Detailed Books acc 511, 632, 155, 156, 641, 641, 521, 157,
911 for recording in the Summary of expenses The information is used to prepare the financial statements.
1.3.3 Journal - Ledger form of bookkeeping
Economic and financial transactions of an enterprise are documented in chronological order within a unified general ledger, known as the journal-ledger Accounting vouchers, or general accounting vouchers of similar types, serve as the foundational documents for these entries.
This form of bookkeeping is used the following types of books: Journal - ledger, detailed accounting books - cards for carrying out the recording process.
Diagram 14: Journal - Ledger form of bookkeeping
Every day, accountants base their figures on sales documents to record in one line in both diary entries and ledger accounts 511, 632, 155, 156, 641, 641,
Sales vouchers after being recorded in the Journal - The part numbers acc
511, 632, 155, 156, 641, 641, 521, 157 are used to record in the detailed book of goods, finished products, detail book of sale , detailed book of production and business expenses, other detailed books
At the end of each month, the accountant summarizes the data from the Diary and debt columns, ensuring to include each relevant account in the ledger, specifically accounts 511, 632, 155, 156, 641, 521, and 157, to accurately record the month-end totals.
Total data on detailed books acc 511, 632, 155, 156, 641, 641, 521, 157 for
Collation between Summary sheet and ledger-ledger.
(3) After checking and matching the figures recorded in the ledger, detail book acc 511, 632, 155, 156, 641, 641, 521, 157, 911 and the Summary of details used to prepare the financial statements
1.3.4 Journal – Vouchers form of bookkeeping
All economic and financial transactions resulting from business activities are documented in accounting vouchers and categorized in the Journal These transactions are recorded on the "Debit" and "Credit" sides of the corresponding accounts.
+ Helps reduce the amount of Bookkeeping.
+ Easy to control errors due to regular checking and collating information.
+ This form is quite complicated, so the accountants have a thorough understanding of works to be able to perform it easily.
Diagram 15 : Order of bookkeeping in the form of journal - voucher
Every day, based on the accounting vouchers that have been checked, take data directly into the journals - vouchers or lists, related detailed books.
For recurring production and business expenses, original documents are collected and organized into allocation tables, from which results are derived.
Allocations recorded in lists and journals - related documents.
Vouchers are systematically recorded using comprehensive lists and detailed books, ensuring accurate tracking of all transactions At the end of each month, the total data from these records is transferred into the Diary - Vouchers for consolidated reporting.
At the end of each month, it is essential to finalize the accounting process by closing the books, compiling figures from the journals, and meticulously checking and comparing these figures with the logs and detailed accounting cards This ensures accuracy in the summary tables of relevant details, allowing for a comprehensive total to be recorded directly in the Ledger.
Vouchers associated with detailed accounting books and cards must be recorded directly in the relevant records At the end of each month, these detailed accounting books or cards should be compiled to create summary tables for each account, which will then be compared with the Ledger for accuracy.
Total figures in the Ledger and some detailed indicators in the Diary -
Documents, Lists and Summary tables are used to prepare financial statements.
ACCOUNTING FOR REVENUE, EXPENSES AND BUSINESS
Machine accounting is the process of applying information technology to the accounting information system, in order to convert accounting data into financial information needed for the decision-making process.
1.4.1 Principles and requirements for machine accounting organization
For a good accounting system to apply accounting software, it is necessary to comply with the following principles and requirements:
Effective organization of accounting work through software should prioritize scientific methods and rational approaches, ensuring compliance with the Accounting Law It must align with the State's macro management requirements, adhere to accounting standards, and follow the financial accounting policies established by the government.
Table synthetic vouchers Financial Statement
- Organization of accounting work on software must ensure compatibility with specific characteristics, conditions and circumstances of the enterprise.
- Ensuring that the acquisition, inspection, processing and provision the economic and financial information of the enterprise must meet the management requirements of the business and the State.
- Organization of accounting work on software must be suitable with the staffing and qualifications of the current accounting staff.
- Organization of accounting work on software in enterprises needs to grasp the principle of thrift and efficiency.
1.4.2 Steps to perform Accounting for revenue, expenses and business results on accounting software
Diagram 16 : The sequence perform in accounting software
Every day, accountants enter data from accounting documents into the tables set up in the software.
Every document features a unique data entry screen tailored to the specific accounting system in use To input data from a single original document, users simply select the relevant fields and enter the necessary information into the designated cells.
Accounting of sales revenue: using delivery vouchers, added value invoices and accounts according to the reciprocal relationship of accounts.
Accounting of selling expenses, administration expenses: using input VAT invoices, making payments according to the reciprocal relationship of accounts.
Effective accounting of financial revenues and expenses involves utilizing bank statements to accurately input data into accounting software, reflecting the reciprocal account relationship This process ensures that information is automatically updated in both the general accounting books and specific detailed accounts, such as 511, 632, and 911, enhancing overall financial management.
According to the programming of the accounting software, the information will be automatically updated in general accounting books and detailed accounting books 511, 632, 911
At the end of each month and year, accountants finalize the accounting books, allowing the software to automatically generate a balance sheet and a summary of the arising amounts This process facilitates the creation of comprehensive financial statements and accounting reports based on the balance sheet and summary details.
At the end of each month and year, general and detailed accounting books are printed, bound, and processed in accordance with legal requirements for manual accounting records.
Chapter 1 focuses on the fundamental theories of revenue and cost accounting, emphasizing their role in determining business results within commercial enterprises from a financial accounting perspective My studies in the Finance school, guided by dedicated teachers, have deepened my understanding of these essential concepts By reviewing the significance of revenue, expenses, and the determination of business results, this thesis highlights the critical role of accounting in commercial enterprises This knowledge not only enhances my internship experience at Viet Nhat Food Joint Stock Company but also prepares me for future accounting practices in various companies.
In Chapter 2, I will provide an overview of Viet Nhat Food Joint Stock Company, focusing on its accounting practices related to revenue, expenses, and the determination of business results, as observed during my internship experience.
PRACTICAL SITUATION OF ACCOUNTING FOR REVENUE, EXPENSES AND DETERMINE BUSINESS RESULTS AT
OVERVIEW OF VIET NHAT FOOD JOINT STOCK COMPANY
In today's economy, the trend of openness and integration provides businesses with ample opportunities for growth As a result, companies are striving to strengthen their market position through dedicated efforts and innovative strategies.
Viet Nhat Food Joint Stock Company, founded on June 22, 2017, is registered under business certificate No 0107893162 The company underwent its second registration change on November 27, 2018, with the Cau Giay District Tax Department in Hanoi, Vietnam.
The name of the company: VIET NHAT FOOD JOINT STOCK COMPANY
- Operation status: in operation (granted tax registration certificate).
- Registration location: Cau Giay District Tax Department
- Headquarter address: Lot 10-E1, Yen Hoa New Urban Area, Yen Hoa Ward, Cau Giay District, Hanoi City
- Charter capital: VND 20,000,000,000 (in words: Twenty billion Dong)
- Par value of shares: 10,000 VND
- Total number of shares: 2,000,000 (Two million shares)
- Legal representative of the company:
+ Full name: Nguyen Tran Hanh_ Position: Director
+ Address of permanent residence registration of legal representative: Noi
Viet Nhat Food Joint Stock Company, located in Am Hamlet, Lien Ninh Commune, Thanh Tri District, Hanoi City, Vietnam, was founded by six members with a charter capital of VND 20 billion (twenty billion VND).
Viet Nhat Food JSC (Hatoyama System) operates as a seafood supermarket, specializing in the import of a diverse range of seafood from renowned locations such as Nha Trang, Phu Quoc, Quang Ninh, Phan Thiet, and Con Dao, as well as international sources The company prioritizes hiring highly skilled staff, particularly seafood engineers, to ensure quality and safety Despite facing initial challenges due to the sensitivity of fresh seafood during transportation and environmental changes, Viet Nhat Food JSC has established itself in the market.
After 3 months, the Board of Directors decided to change the business model is combining Restaurants and Seafood Supermarkets - this is the first model in Hanoi and on September 21, 2017 Hatoyama 1 Restaurant officially opened address at No 8 Van Phuc, Ba Dinh, Hanoi Along with the leadership, the company's staff also try their best and the business is favorable, Hatoyama 2 Restaurant was established at address Shop house 30 Nguyen Chanh, Trung Hoa, Cau Giay on 26 / 6/2018 By April 2019, there was Hatoyama 3 restaurant at 13 Ly Thuong Kiet, Q Hoan Kiem, Hanoi According to the company's plan in 2020 is to open 2 new restaurants in Hanoi.
Viet Nhat Food Joint Stock Company operates mainly in the field of trading all kinds of fresh seafood and providing catering services for customers.
Supermarket is a place to wholesale seafood for other businesses in Hanoi, a fresh seafood market for consumers to choose and sell to customers who want to enjoy at the restaurant .
Experience exceptional dining at our restaurant, where renowned chefs with over 20 years of expertise craft mouthwatering dishes Enjoy the freshest seafood, sourced directly from the water and served at your table in under 20 minutes, ensuring a delightful culinary experience.
Viet Nhat Culinary Joint Stock Company operates three businesses, including a restaurant with 290 tables and a capacity of 2,400 guests, featuring a VIP room for partner receptions and a modern, airy common space ideal for enjoying seafood with family and friends Additionally, the company runs a supermarket that offers a wide selection of fresh seafood for wholesale and retail consumers By sourcing directly from fishermen and suppliers, Viet Nhat ensures a stable supply of high-quality seafood while purchasing in bulk to secure the best prices and minimize intermediate costs.
The company sources fresh seafood from suppliers nationwide, offering it through both wholesale and retail channels Additionally, seafood is expertly processed into delectable dishes for diners, available through restaurant and catering services This comprehensive approach is illustrated in the production organization process diagram.
Diagram 17 : Process of buying (importing) goods in Viet Nhat
Viet Nhat Food Joint Stock Company is a pioneer in the chain of restaurant - supermarket business model, bringing newness to customers.
While seafood imported from suppliers is predominantly fresh and farm-raised, there are inherent limitations in its transportation to supermarkets The transition from a natural to an artificial breeding environment can cause stress to the seafood, resulting in some products fainting or dying during the journey.
The following is Income Statement in 2019 of Viet Nhat Food Joint Stock Company:
2.1.3 Characteristics of the organizing management mechanism in Viet Nhat Food JSC.
At Viet Nhat Food JSC, once management approves decisions, the relevant departments collaborate to ensure effective implementation in restaurants and supermarkets.
The departments and divisions aim at the common goal of building a stronger company, supporting each other at work, contributing to the organizational structure scientifically, avoiding heavy.
Diagram 18 : Organizing management mechanism in Viet Nhat
Director: Decide on all issues related to daily operations of the company;
The responsibilities include organizing the execution of the Director's decisions, overseeing the implementation of the company's business and investment plans, and proposing the organizational structure and internal management regulations Additionally, the role involves appointing and dismissing managerial positions (excluding those directly handled by the Director), determining employee wages and allowances, and exercising other rights and duties as outlined by law, the company's Charter, and the Director's decisions.
The Finance Department is tasked with accurately reflecting and recording all economic transactions in compliance with state regulations Additionally, it is responsible for financial planning and reporting to superiors as mandated by established guidelines.
Restaurant management oversees all business operations, including service quality control, workforce training, and customer assistance This department also addresses issues and incidents that arise during daily activities, all while operating under the direct supervision of the board of directors.
Purchasing Department: this department is responsible for meeting the raw materials necessary for the operation of the business, planning purchasing, finding sources of high quality goods,
The Technical Department is tasked with maintaining facilities in optimal condition by adhering to established requirements It develops a periodic maintenance and overhaul plan for equipment, while also focusing on the strategic advancement of new technologies and the modernization or replacement of machinery with more efficient and cost-effective options.
The Marketing Department plays a crucial role in linking the company's products and services with customers, enhancing brand image, and driving revenue through effective marketing programs Its responsibilities include managing and developing relationships with both potential and existing customers, as well as planning and outlining the services offered to enhance customer care.
PRACTICAL SITUATION OF ACCOUNTING FOR REVENUE,
At the Company, the arising revenue mainly includes: revenues from sales and services, financial income and other income.
2.2.1.1 Accounting for revenue from sales of goods and services.
Revenue from sales of goods and services: is the total amount of receivables arising in the period from the sale of goods and provision of services of the enterprise
- VAT invoice or commercial invoice
- Other documents which relating to providing goods or rendering services.
Account 511- Revenue to record revenue from sale of goods and services in the accounting periods
On January 18, 2019, Viet Nhat Food joint stock company sold food Service to Econfarms Viet Nam Limited Company with the price of 4.692.000 VND Price does not include VAT, VAT10%
Based on VAT invoice HĐ 00004:
The process of inputting software: On the Misa input screen/Go to the sales module/ select ADD/fill in the sales voucher.
- Customer: Econfarms Viet Nam Limited Company
- Reason : Selling goods according to invoices 00004
Cr acc 5111 – revenue from Sales of goods and services
- put the next tab “ Tax “/ % VAT : 10%
Picture 3 : Manipulation on Misa software
Table 1: Ledger of account 511- Revenue from sales of goods and services
Table 2: Detailed book of account 511- Revenue from sales of goods and services
Table 3: General journal of account 511 - Revenue from sales of goods and services
Net sales represent the total revenue generated by a company after accounting for returns, allowances for damaged or missing goods, and any trade discounts applied This figure, reported on the company's financial statements, provides a clear view of the actual sales performance by reflecting these necessary deductions.
Account 511, Revenue deductions are recorded in the debt side of account 511
In 2019, Viet Nhat Food Joint Stock Company does not generate revenue deductions, so the revenue from sales of goods and services is net revenue.
Financial income refers to the economic benefits a business earns from financial activities within a specific accounting period, as outlined by VAS No 14 This income is recognized when it is likely that the business will realize economic benefits from the transaction and when it can be reliably measured Key components of financial income include interest from loans and deposits, capital gains from the sale of financial investments, dividends and profits received, gains from foreign exchange differences, cash discounts received, and other miscellaneous financial incomes.
Under Vietnamese accounting system uses account 515- Financial revenue is used to record financial revenue incurred during the accounting period.
Based on documents of bank statements of VP BANK, interest on bank deposits dated 15/03/2019.
From the original vouchers, the accounting account shall be reflected in the detail book of account 515 and ledger of account515.
Picture 4 : Credit Note from VP Bank 15/03/2019
Table 4 : Detailed book of account 515 – Financial income
Table 5 : Ledger of account 515 – Financial income
Other income is income other than sale income of the enterprise arising in the accounting period
Other income encompasses various sources, including proceeds from the sale of fixed assets, gains from the revaluation of materials, goods, and fixed assets contributed or compensated by customers, and tax refunds from the State Budget It also includes unidentifiable accounts payable, sale-related tips or awards from suppliers not included in sales, and gifts or donations in cash or kind from organizations and individuals.
- Receipts and other original documents
Under Vietnamese accounting system, account 711- other income is used to record other income incurred during the accounting period.
Viet Nhat Food JSC does not incur other incomes in 2019.
2.2.2 Practical situation of accounting for expenses
2.2.2.1 Classification of expenses at the company
There are some types of expenses at the company: Cost of Goods sold, Fianancial Expenses, Selling expenses, Administrative expenses, other expenses and corporate income tax expenses.
2.2.2.2 Accounting for Cost Of Goods Sold
In wholesale and retail sales, accounting is maintained in Acco 632 Upon receiving the delivery note, the accountant is responsible for setting up the operations and entering the relevant data into the accounting software.
Credit Acc 156 - The capital value of goods
At Viet Nhat Food Joint Stock Company, the cost of goods sold is determined using the FIFO (First In, First Out) method This process involves various documents, including delivery notes and accounting records based on these notes, along with detailed accounts and the general journal for ledger account 632.
-Inventory issue note -Other documents which relating to rendering of services.
Account 632 – “Cost of goods sold” This account is used to record the cost of goods sold and services.
Based on delivery notes number HT-0008358, December 05 , 2019 The accountant records:
From the original documents that are delivery notes, the accountant records it in the general diary book, the sales detail book, the account ledger 632.
Picture 5 : Delivery notes number HT – 0008358
Table 6: Detailed book of account 632 – Cost of goods sold
Table 7 : Ledger of account 632 – Cost of goods sold
2.2.2.3 Accounting for Financial Expenses at the company
Financial expenses are expenses related to activities for equity mobilization,financial investments, borrowings and other financial activities of the business
- Expenses related to financial investments such as: loss from investments, other expenses which are not capitalized in the investments
- Borrowing expenses such as: Interest, other management fees.
- Expenses related to foreign currencies transaction, loss from foreign exchange rate difference
- Provision for price decrease of financial investments
- Other expenses related to financial activities
Under Vietnam accounting system use account 635- Financial expenses is used to record the financial expenses incurred during the accounting period.
Based on the notification of credit flight fee notice
From the original accounting records reflected in detailed account acc 635, Ledger acc 635
Piture 6 : Debit notes from TP Bank 21/01/2019
Table 8 : Detailed book account 635 – Fianancial expenses
Table 9: Ledger account 635 – Fianancial expenses
For accounting of selling expenses, Viet Nhat Food Joint Stock Company uses account "6421- Selling expenses"
The accountant will meticulously document the arising vouchers in the detailed book of Account 6421 Subsequently, using the data from the general journal, the accountant will update the ledger for Account 641.
Account 6422 – Selling expense to record the Selling expenses incurred during the accounting period Accounting entries to record any Selling Expenses incurred for the period.
Based on invoice No 00005454 dated 01/02/2019, the accountant shall record:
Picture 7 : VAT Invoice number No 0005454
Table 10 : Ledger account 6421 – selling expenses
Table 11 : Detailed book account 6421 – selling expenses
Account used 6422 - Administrative expense to record the Administrative expenses incurred during the accounting period Accounting entries to record any Administrative Expenses incurred for the period.
Picture 8 : Payment from Dien Luc Ha Noi Company 31/03/2019
Table 12 : Ledger account 6422 – Administrative expenses
Table 13 : Detailed book account 6422 – Administrative expenses
- Receipts and other original documents.
Under Vietnam accounting system use account 811- Other expenses is used to record other expenses incurred during the accounting period.
Viet Nhat Food JSC in 2019 does not incur other expenses.
2.2.2.7 Accounting of corporate income tax expenses at the company.
Corporate income tax encompasses the total tax expense related to a business's financial performance, incorporating both current and deferred tax liabilities At the conclusion of the accounting period, businesses must finalize their accounting records, with accounting software facilitating the automatic calculation and transfer of the corporate income tax payable.
Vietnam counting systems uses account deferred income tax expenses
(821) - record current and deferred tax expenses incurred in the accounting period
Table 14: Ledger of account 821- Corporate income tax expenses
2.2.3 Accounting for determining business results at Viet Nhat Food
Viet Nhat Cuisine Joint Stock Company assesses its monthly business performance by calculating net profit, which encompasses total net revenue and costs associated with all business activities This includes selling expenses, management costs, financial revenue, and overall expenses incurred.
At the end of each month, the accountant compiles a business results report by transferring revenue, cost of goods sold, selling expenses, and administrative expenses recorded in Account 911 This process involves detailed accounting in the general diary and the ledger for Account 911 The report is based on the ledgers for Accounts 511, 515, 632, 6421, 6422, and 911, ensuring a comprehensive overview of the financial performance for the period.
- Transferring cost of goods sold:
Cr acc 911 113,035,678 financial activities - Expenses of financial activities – selling expenses -
G&A expenses + Other income - Other expenses
Table 15: Ledger account 511- revenue from sale of goods and services in
Table 16: Ledger account 515- Financial income in 2019
Table 16: Ledger account 632- Cost of goods sold in 2019
Table 17: Ledger account 635 - Financial expenses in 2019
Table 18: Ledger account 6421 – Selling expenses in 2019
Table 19: Ledger account 6422 – Administrative expenses in 2019
Table 21: Income Statement at Viet Nhat Food JSC in 2019
EVALUATION OF ACCOUNTING FOR REVENUE, EXPENSES
During my internship at Viet Nha Food Joint Stock Company, I gained valuable insights into the company's accounting practices, particularly in the areas of revenue and expense management, as well as the overall determination of business results.
In general, the organization of the accounting system and the organization of accounting of revenues, expenses and determination of business results have the following advantages:
- The company organizes a centralized accounting system, scientifically organized, clearly decentralized and specialized for each employee, ensuring the direct and focus on the unity of the leaders.
- The accounting administration is strictly conducted by the accountant, there is regular monitoring and assurance between departments.
The majority of the company's payment transactions are conducted through banks or by utilizing complementary debts, which enhances security and allows for better control over payment timelines, ultimately simplifying financial management.
The company specializes in printing and exporting general journal reports, a widely utilized tool by enterprises that offers numerous benefits for accounting tasks Daily bookkeeping facilitates convenient and straightforward checking and comparison of revenues and expenses, ensuring that related books and vouchers are comprehensive and precise.
Timely and complete contributions to the State Budget are consistently maintained, supported by high-quality accounting software that streamlines the accounting process.
The company utilizes an invoice and voucher system that adheres to the format established by the Ministry of Finance, ensuring that all economic transactions are accurately documented on the vouchers.
Accounting records are meticulously signed and numbered in chronological order, ensuring thorough verification of economic transactions, accompanying original documents, signatures, and relevant provisions This systematic approach facilitates the synthesis and classification of economic information, enabling comprehensive, timely, and precise entries in both general and detailed accounting books.
The organization and management of document preparation and rotation within the business are conducted meticulously, ensuring a strong collaboration between various divisions and the Accounting Department.
2.3.2 Limitations and causes of Limitations.
Besides the achievements that accounting activities have achieved, the company also has Limitations:
Certain operations failed to comply with current accounting standards and regulations regarding revenue recognition, as they recorded revenue prematurely despite customers making advance deposits.
Many businesses mistakenly classify domestic transportation and loading/un
The accounting department has failed to print all required accounting books as mandated by regulations, leading to a reliance on only printing financial statements from the computer when necessary This practice poses significant challenges, as a computer failure can result in difficulties in data recovery and accessing crucial information when needed.
- The transportation of original documents between the departments: warehouse - cashier - accountant is still delayed, sometimes affecting the accounting.
- Due to the limited qualifications of the accountants, not really uniform, not yet meeting the work requirements in new conditions.
To enhance efficiency, the company utilizes computer accounting software, necessitating that accountants continually upgrade their computer skills and software proficiency Accurate and swift data entry is crucial; however, limitations in information technology and software expertise can lead to errors, such as incorrect data entry These mistakes result in bookkeeping discrepancies and prolong the time required for verification and correction in accounting processes.
Limitations due to business industry characteristics
- Sales operations sometimes were not uniformity among business establishments.
The seafood trading industry, particularly in shrimp and fish, is significantly affected by external price fluctuations As global prices rise or fall, it creates challenges for accounting practices due to the variability in product pricing.
Chapter 2 of the thesis goes into the actual situation of accounting for revenue, expenses and determining business results in Viet Nhat Food Joint Stock Company Through the process of studying and researching on the situation of accounting for revenue, expenses and determining business results at the company,
I find this is an accounting part with a large and important workload in the accounting organization
The accounting operations at Viet Nhat Food Joint Stock Company are well-organized and utilize effective methods to address financial challenges The seamless collaboration between the accounting department and other operational sections enhances overall productivity and management effectiveness Based on the analysis of revenue, expenses, and business results, it is essential for the company to implement recommendations aimed at improving its accounting practices for better financial outcomes.