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TABLE OF CONTENT ACKNOWLEDGEMENTS During the internship period, I have received a lot of help, support and encouragement from others in order to complete this report First of all, I would like to expr[.]
TABLE OF CONTENT ACKNOWLEDGEMENTS During the internship period, I have received a lot of help, support and encouragement from others in order to complete this report First of all, I would like to express my sincere thanks to Assoc Prof , Ph.D Nguyen Thi Thu Lien, who is an expert in accountancy field She directed me so carefully and kindly I have learned precious things from her In addition, I want to say thank to my family for always supporting and motivating me not only in life but also in studying and working Thanks to them, I have a great opportunity to study in National Economics University and accessing this internship I also would like to express my gratefulness to the Advanced Educational Program The faculty gave me a good chance to get an internship by providing specific direction and support I really appreciate what they have done to create the best condition for student during the internship period Finally, I would like to express my sincere thank to Fancy Creation Vietnam Co.,Ltd for giving me an opportunity to work in practical and professional environment I believe that the knowledge and experiences I have received from the company will be very useful for me in my future career Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 ABSTRACT The Vietnamese economy is more and more developing, the number of companies increases significantly; then, the competition between enterprises becomes more fierce Therefore, every business must find their own best solution to be able to survive and grow To that, enterprises need to have a well-performing accounting department and qualified accountants that have sufficient capacity to collect and deal with problems related to financial activities as well as the operation of the business In production and business activities, all physical products are made from raw materials This is an indispensable element in the production process Therefore, accounting of raw materials plays an important role in any manufacturing company It enhances the management, storage, timely supply of raw materials and improves the efficiency of using raw materials Aware of this, after researching about the company, I decide to choose the topic "Completing the accounting of raw materials at Fancy Creation Vietnam Co., Ltd” for my thesis According to the purpose of the internship, the report was divided into four main chapters so that the readers can have overall knowledge about the accounting of raw materials at Fancy Creation Vietnam Co., Ltd The first chapter will introduce about the rationale of the research, research objective and methodology, and the scope of the research The second chapter gives theoretical framework including definition, characteristics, classification, process of managing raw materials and related documentation and vouchers The third chapter will focus on the real accounting situation of raw materials at Fancy Creation Vietnam Co., Ltd including detailed and general accounting method of raw materials The final chapter will discuss about the accounting of raw materials and give some recommendations in order to improve the effectiveness of accounting of raw materials at Fancy Creation Vietnam Co., Ltd Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 ABBREVIATION Co., Ltd: Limited company Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 LIST OF TABLES Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 LIST OF FIGURES Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 CHAPTER INTRODUCTION 1.1 Rationale Raw material is one of three basic elements that constitute the production process It is the physical components of the products that decide directly to the quality of the products because its characteristic is once-used and their total value were transferred into the finished products Materials including main raw materials and auxiliary create significant influence to the production processes In terms of material factors, raw materials constitutes the products entity; in terms of value, raw materials account for a large proportion of the price structure; in terms of capital, the amount of money used to buy raw materials accounts for high percentage of the total working capital of the business; in terms of administration cost, the cost of managing raw materials takes a relatively large proportion of total administration cost of the business Therefore, every companies want to operate their businesses continuously and regularly have to ensure the supply of raw materials in sufficient quantity, appropriate time, sizes and qualities That is the function of the accounting of raw materials Accounting of raw materials in business plays a crucial role It records the entire situation of raw materials in the processes of purchasing, warehousing and using raw materials A well-performed of accounting of raw materials will reflects exactly the proportion of cost of raw materials in the total cost of finished products as well as the usage and storage of raw materials Saving the cost of raw materials is an important factor in reducing production costs and increasing the profit for businesses Recognizing the position, role and importance of raw materials as well as accounting of raw materials, during the internship period at Fancy Creation Vietnam Co., Ltd, I have investigated and chose the topic "Completing the accounting of raw materials at Fancy Creation Vietnam Co., Ltd” for this research Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 1.2 Research objectives General objective: Accounting methods of raw materials and solutions to improve effectiveness of managing and using raw materials Fancy Creation Vietnam Co., Ltd Specific objective: - Understanding theoretical framework of raw materials, including definition, characteristics, role, classification, management, general accounting procedures and documentation system… - Evaluating the management and usage of raw materials at the company - Providing some suggestions and recommendations to improve and complete the accounting of raw materials at the business 1.3 Research methodology This study is the combination of many research methods: In terms of application, the study uses applicative approach The information and findings from the report will provide the readers specific understandings about the accounting of raw materials of Fancy Creation Vietnam Co., Ltd in particular and manufacturing companies in general Based on that, the author give some recommendations and suggestions to improve the effectiveness of the management of raw materials in the business In terms of method of conducting the research, this study use empirical research method During the internship period, the author approached, studied and researched in a practical business environment All the data and information were collected and analyzed from the real data source of the Fancy Creation Vietnam Co., Ltd Therefore, the findings and results of the analysis provided by the study are very practical Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 In terms of the study’s purpose, the author use descriptive method to collect and present information about the role, characteristics, classification, management procedure , accounting documentation and vouchers, detailed and general accounting procedures of raw materials In terms of data collection method, the study uses qualitative approach in order to describe the real situation of raw materials and accounting procedures of raw materials at Fancy Creation Vietnam Co., Ltd , not based on numerical test or calculation 1.4 Scope of research The research focus on the topic “ Completing the accounting of raw materials at Fancy Creation Vietnam Co., Ltd” in the year 2014 Name of the company : Fancy Creation Vietnam Co., Ltd Tax code: 0900275053 Address: B4 Street, Block B, Pho Noi A Industrial Zone, Lac Hong, Van Lam District, Hung Yen Province Opening date: 12/9/2007 Business license: 052043000039, dated 21/9/2007 Business field: Producing electronic components The main content of the research includes the real situation of raw materials ( characteristics, grouping, management, accounting documentation system ) and detailed and general accounting procedures ( account system, accounting method in recording raw materials, accounting books…) of raw materials at Fancy Creation Vietnam Co., Ltd Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 CHAPTER THEORETICAL FRAMEWORK OF RAW MATERIALS AND ACCOUNTING OF RAW MATERIALS 2.1 The definition, characteristics and role of raw materials 2.1.1 Definition of raw materials Raw materials are the labor subject that purchased or produced by the companies They are formed from different sources and used for production and business activities of enterprises 2.1.2 Characteristics of raw materials Raw materials have some basic characteristics as follow: The raw materials will change their forms and not keep their original form and shapes when they are used in the manufacturing process The raw materials only involved directly in one production cycle The entire value of the materials to be transferred directly into the product, as the basis for calculating cost basis Requirement of managing raw materials derives from the role and characteristics of the raw materials During the production process, raw materials should be monitored, managed strictly in terms of physical objects and values in all stages of the procurement, storage, preservation and use 2.1.3 The role of raw materials and accounting of raw materials in the business Every enterprise want to operate their business have to focus on many factors, of which inputs is the most important factor In particular, raw material is an noticeable factor because they directly create the products The production process will be interrupted or delayed with the lack of raw materials Raw materials affect directly to the quality of the products as well as the effectiveness of using and managing assets and capitals of the company Ensuring the quality, quantity and appropriate type of raw materials is the way to improve the quality of finished products In addition, because raw material is the input of the business cycle, directly Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 relates to the production and consumption process, so the timely supply with reasonable price of raw material is the key condition for the successful operation of the business In summary, in terms of physical object and value, raw material is a vital part of manufacturing companies Improving the efficiency of raw materials management will increases the efficiency of using corporation’s assets and capital Accounting of raw materials is the process of recording and reflecting the situation of purchasing, warehousing, importing and exporting of raw materials during the production process Accounting documents of raw materials will provide useful information for managers about the quantity, quality of raw materials; based on that the managers can suggest some solution to control the price and quality of raw materials Accounting of raw materials plays a crucial role in monitoring and controlling the implementation of raw materials management’s plan Besides, accounting of raw materials affects to the cost accounting in the business Conducting an effective accounting of raw materials helps the managers control the management and usage situation of raw material in order to make appropriate adjustments 2.2 Classification and evaluation of raw materials 2.2.1 Classification of raw materials In the production process, the companies have to use many types of raw materials In order to manage the raw materials, they must be classified in a reasonable way Classification of raw materials is the process of dividing raw materials into different types, groups under specific criteria Based on the function and management requirement of raw materials in the business activities, they are divided into three main groups: Main raw materials: is the raw materials that directly constitutes the actual products in the production process such as iron and steel in the mechanical companies, fabric in the garment… Supervisor: Assoc Prof , Ph.D Nguyen Thi Thu Lien Do Thu Huyen – Class: Advanced Accounting Intake 53 ... research focus on the topic “ Completing the accounting of raw materials at Fancy Creation Vietnam Co. , Ltd? ?? in the year 2014 Name of the company : Fancy Creation Vietnam Co. , Ltd Tax code: 0900275053... of raw materials as well as accounting of raw materials, during the internship period at Fancy Creation Vietnam Co. , Ltd, I have investigated and chose the topic "Completing the accounting of raw. .. qualities That is the function of the accounting of raw materials Accounting of raw materials in business plays a crucial role It records the entire situation of raw materials in the processes of purchasing,