Accounting for revenue and business results at hoang phat production, trading and service company limited

MINISTRY OF FINANCE ACADEMY OF FINANCE NGUYEN THAO HIEN CLASS: CQ57/21.04CL GRADUATION THESIS MENTOR: DR NGUYEN TUAN ANH HA NOI - 2022 LIST OF ACRONYMS Acronyms Normal words Acc Account CIT Corporate Income tax Cr Credit Co Company COGS Cost of goods sold Dep’t Department Dr Debit HR Human resources Ltd Limited INTRODUCTION The urgency of the subject: In the context of international economic integration and trade liberalization, businesses in all sectors of the economy in general, and businesses operating in the trading sector, in particular, always have a big question about how to survive and develop, how to become more competitive or how to increase its strength in the current market economy It can be seen that, in order for a business to achieve its ultimate goal - profit, it is necessary for the business itself to effectively manage its production and business activities to maximize revenue and minimize costs Therefore, businesses - especially trading businesses need to promote their initiative and creativity in business activities to maximize their advantages to achieve the highest efficiency through actions such as: increasing the production and business capacity of the enterprise itself; flexibly grasping and meeting the needs and psychology of consumers, thereby helping to increase sales and achieve the highest possible profit In addition to finding ways to improve efficiency in their production and business activities, the organization and management of accounting is considered one of the essential requirements for every business because it will make an important contribution to the management and decision-making of business administrators It can be seen that accounting information, especially accounting information about sales and business results is one of the most effective reference information for managers to understand the business performance of an enterprise More than ever, organizing sales accounting and determining business results is an indispensable requirement in the operation process for every commercial enterprise The completion of accounting for revenue and determination of business results will contribute to helping businesses improve the quality of financial information, making business decisions more effective, thereby helping the business can survive, develop and compete more Recognizing the importance of sales accounting and determining business results, combined with the knowledge that has been equipped in the process of studying at school and in practice at the company and under the guidance of Dr Nguyen Tuan Anh and with the help of the Board of Directors and the accounting department of the company, I chose the topic: “Accounting for revenue and business results at Hoang Phat Production, Trading and Service Company Limited" as the subject of my graduation thesis The purposes of the dissertation: Several purposes which are commonly used in under graduated dissertation is as follows: - Clarifying basic theoretical issues on the accounting for revenue and business results - Research and describe the actual accounting for accounting for revenue and business results in Hoang Phat Production Trading and Services Company Limited - Analyzing, evaluating and proposing some ideas to improve accounting for revenue and business results in Hoang Phat Production Trading and Services Company Limited Research objects and scope of the dissertation 3.1 Research objects: Researching the theoretical background and the reality of accounting for revenue and business results in Hoang Phat Production Trading and Services Company Limited based on some theories, accounting standards, and accounting regimes as follows: - Vietnamese accounting standards system issued by the Ministry of Finance - Circular 133/2016/TT-BTC - Accounting for small and medium enterprises of Ministry of Finance dated August 26, 2016 3.2 Research scope: - Regarding content: Focusing on the actual accounting for revenue and business results in Hoang Phat Production Trading And Services Company Limited regarding financial accounting domain - Regarding specific address: Hoang Phat Production Trading And Services Company Limited - 53 Hang Dieu, Cua Dong Ward, Hoan Kiem District, Hanoi, Vietnam - Regarding time: studying theoretical issues and surveying actual situation in the Hoang Phat Production Trading And Services Company Limited for the year 2021 – 2022 Research methodology In order to collect and process data and present research results, the authors could apply a combination of methods of theoretical research, fieldwork, interviews, expert consultation, statistical data, analysis, comparison as follows: - Collection of primary documents: The author asked and consulted directly with the accountants and other employees in the company In addition, the author explores research issues through consulting with instructors and accounting experts - Collection of secondary documents: The author conducted research theoretical issues through reference textbooks, articles, magazines, academic papers… Collect secondary documents on the situation by observing methods, studying documents, accounting books, financial statements of the company Information could also be collected via the media and other documents - Summarizing and processing data as evidence for the research results: The author uses descriptive statistical methods, qualitative or quantitative analysis and comparison between the reality and theoretical basis or accounting regime to present research results The structure of the dissertation In addition to the introduction and conclusion, the dissertation consists of chapters: Chapter 1: General theory on the accounting for sales and business results determination in the commercial company Chapter 2: The actual accounting for accounting for sales and business results determination in Hoang Phat Production Trading and Services Company Limited Chapter 3: Some suggestion on accounting for revenue and business results determination in Hoang Phat Production Trading and Services Company Limited CHAPTER 1: GENERAL THEORY ON ACCOUNTING FOR SALES AND BUSINESS RESULT DETERMINATION IN THE COMMERCIAL COMPANY 1.1 Importance of accounting for sales and business result determination in a commercial company 1.1.1 Definition of sales and business result determination: - Sale is the transfer of ownership of goods with benefits or risks to the customer, and at the same time being paid or accepted by the customer Sales are the final stage in the production and business process of an enterprise This is the process of converting capital from the form of capital products, or goods to the form of money capital or payment capital - Business results are the final results of normal production and business activities and other activities of the enterprise in a certain period, expressed in profit or loss Business results are a key factor to make short-term decisions of businesses because this is a factor that directly affects the decision of business managers whether or not to continue trading a certain product Meanwhile, through its sales process, businesses realize their ultimate goal - profit maximization, thereby helping businesses determine their business results at the end of each period certain to make decisions in the next period that are suitable for the current conditions of the business and the market 1.1.2 Characteristics and importance of sales and business result determination: 1.1.2.1 Characteristics of sales process and business result determination: Sales process is a process in which: + There is an agreement between the buyer and the seller on the quantity, quality and specifications of the goods sold + There is a change of ownership and right to use the goods from the seller to the buyer + The seller delivers the goods to the buyer and receives the money or accepts payment This amount is called sales revenue The sales process will determine the financial capacity, the ability to recover capital to reproduce in the enterprise Business result is the final result of ordinary production and business activities and other activities of an enterprise in a certain period, expressed in the amount of profit or loss Business results Total net revenue from selling = goods and providing services Result from financial activities = Total net revenue financial activities from - Business Cost of goods sold - administration and CIT expenses expenses Cost of financial activities In which: Net revenue from selling goods and providing services is calculated as total revenue from selling goods and providing services minus (-) deductions from revenue Other activities results are results calculated as the difference between other income and other expenses 1.1.2.2 Importance of sales process and business result determination: - The sales process is one of the important processes of business activities When doing good sales, company will quickly increase capital turnover, increase profits, fulfill their obligations to the State budget through tax payment, develop investment, improve the lives of laborer - The determination business results helps business see production and business activities in the period, thereby company makes appropriate decision policies At the same time, it is an important basis for the State to assess the ability of business operations of enterprises, thereby building and examining the implementation of obligations to the State of enterprises Determining business results helps promote the use of human resources and the allocation of resources effectively for the entire national economy in general and for each business in particular 1.1.3 Management requirements for accounting for sales and business result determination 1.1.3.1 Management requirements for goods for sale, sales and determination of business results process: The company should be (1) manage the plan and implementation of the target consumption plan in each period, each type of product, each economic activity, and each customer and (2) detailed management by quantity, quality, type, and value of each product Quantity management: Reflecting on the value and monitoring the implementation of production plans, the situation of inventory import and export, enterprises temporarily stockpile products and propose measures to handle long-term inventory and avoid outstanding capital Quality management: Quality management through the development of product quality standards; preservation and storage of goods; Improving coding and building branded products is the goal for the sustainable development of enterprises in today's increasingly competitive market economy 1.1.3.2 Management requirements for sales and determination of sales results process: On the basis of comparing the revenue, income and expenses of each company's activities, the results of the enterprise must be distributed and used for the right purposes in accordance with the financial body prescribed for each type of business specific businesses and must adhere to the following basic requirements: - Capture and closely monitor each sales method, each payment method, each type of goods consumed and each customer, to ensure that the payment situation of each customer is captured, thereby planning Timely recovery of capital - In addition, the enterprise must develop a sales policy suitable to each period, each market, and each customer in order to promote the sales process of the enterprise and at the same time conduct market exploration to expand the economic relations with new customers - Accurately calculate and determine the results of each type of activity and closely monitor each sales method, payment method, characteristics of each customer and each type of goods sold to ensure sales activities from which to check the reasonableness and legitimacy of the data to serve as a basis for determining the business results of the enterprise to achieve the highest accuracy and efficiency 1.1.3.3 Requirements for sales accounting and business results determination: To meet the management requirements of finished products and goods; sales and determination of business results, each sales accountant and determining business results of the company need to fulfill the following requirements well: - Reflect and record fully, timely and accurately the actual situation and fluctuations of each type of finished product and goods according to the criteria of quantity, quality, type and value - Reflect and record fully, promptly and accurately the revenue, revenue deductions and expenses of each activity in the enterprise Simultaneously, monitor and urge customers' receivables - Accurately reflect and calculate the results of each activity and the distribution of business results of the company - Provide accounting information for the preparation of financial statements and periodic analysis of economic activities related to the sales process, determination and distribution of results - For the sales accounting and determination of business results, it must be organized closely and scientifically, ensuring the determination of the final results of the business process, reflecting and monitoring and checking the implementation situation obligations of enterprises to the State 1.2 Methods of sales and payment 1.2.1 Methods of sales: - Based on the product transfer to the buyer:  Direct selling method: According to this method, when the company delivers goods and to customers, at the same time, customers immediately pay or accept payment to ensure the conditions for recording sales revenue Direct selling methods include:  Sales with immediately collect payment: Company sells goods and is paid immediately by customers Then the amount of goods is determined to be consumed, while the sales revenue is determined (sales of products coincide with the sale of goods at the time of implementation)  Sales are accepted immediately by the buyer (there is no deferred payment): The enterprise delivers the goods to be accepted by the customer but has not paid immediately At this time, the sales revenue has been determined but the money has not been collected  Sales with deferred payment, interest payment installments: Selling goods under this method is a method of collecting money multiple times, the buyer makes the first payment at the time of partial purchase, the remaining amount is paid by the buyer in subsequent periods and subject to a certain interest rate The company recognizes sales revenue at selling price immediately and recognizes revenue from financial activities of interest on deferred payment based on the payable but deferred payment, in accordance with the time of recognition of the certified revenue  Sales of goods exchange: enterprises bring products, supplies and goods in exchange for other goods which are not similar in nature  Transit for sales method: Under this method, company will periodically send goods to customers according to the agreements in the contract Customers can be agents or regular customers under economic contracts When we deliver the goods - the finished good is still owned by the company, because it has not satisfied the conditions for recognizing the revenue at the same time When the customer pays or accepts payment, the revenue is recognized because the company has transferred the benefits associated with ownership of the goods - the finished goods to the customer + Consignment sales: This method of sale is applied in case the seller consigns the goods to ask the consignee to sell the goods and pay the agreed remuneration The time when the goods are sent for sale is to transfer the temporary management of the company's assets to the consignee Goods are considered to be consumed only when the consignee confirms that the goods have been sold to the customer The performance of the payment obligation to the consignment agent can be done in one of two ways:  The consignee is entitled to % of the selling price to the buyer  The consignee pays the depositor at the price notified by the depositor The actual selling price to the customer is decided by the consignee - Based on sales scope:  Selling goods outside company: By this method, company’s products and goods are sold to companies outside the company  Internal sales: By this method, products and goods of company are consumed by the company itself or sold to internal units (superior units, subordinate units or units of the same level) 1.2.2 Methods of payment - Pay immediately by cash on hand and cash at bank 10 Every month, based on the business situation of the company, the accountant synthesizes and determines the business results on a monthly basis Then, accountant synthesizes and prepares the business results report for the company At the end of the period, in order to determine business results, accountants need to carry out the accounting entries The accounting entries are: Amount (VND) Transfer Acc.511 to Acc.911 (25,672,791,201) Transfer Acc.515 to Acc.911 (560,857) Transfer Acc.632 to Acc.911 24,459,239,678 Transfer Acc.635 to Acc.911 16,581,710 Transfer Acc 642 to Acc.911 827,588,024 Transfer Acc.711, 811 to Acc.911 Transfer Acc.821 to Acc.911 100,095,079 Transfer of profit or loss Acc 911 to Acc.421 269,847,567 Total After carrying out the transferring entries, it is necessary to check the balances on the expense and income accounts whether are still available, if they are, then carry out the transfer of the remaining or find the cause Data entry: At the main interface of Fast Software, select the “General” module and select “Transfer accounting entries” Then, select the time to carry out transfer accounting entries Example: From 01/01/2021, To: 31/12/2021 The software automatically calculates and determines the company's business results in the period 2021 116 2.2.8 Accounting books used for business result determination: (1) Ledger of account 911 – Business results determination (2) Detail books of account 911 – Business results determination 2.2.9 Financial statements preparation in accounting for sales and business results determination Process of the 2.2.13 Income Statement Table xx: Income statement in 21 Hoang Phat Production Trading and Services Company Limited Income statement Year 2021 Form B02 - DNN Curency VND ITEM Code Note Current year Previous year Revenues from sales and service 01 137.685.508 provisions 483 Revenue deductions 02 Net revenues from sales and service 10 117 128.364.298.754 2.523.480 137.682.985 128.364.298.754 provisions 003 Costs of goods sold 11 126.399.180 960 Gross revenues from sales and 20 11.283.804.0 service provisions 43 117.121.822.722 11.242.476.032 Financial income 21 57.889.336 3.082.772 Financial expense 22 60.882.870 74.591.438 23 20.365.000 24 10.780.335.1 - Interest expense Business administrative expenses 14 10.236.034.600 10 Net profit from operations 30 500.475.395 934.932.766 11 Other income 31 0 12 Other expenses 32 27.661.827 13 Other profit 40 (27.661.827) 14 Total profit before tax 50 500.475.395 907.270.939 100.095.079 130.890.588 400.380.316 776.380.351 15 Current enterprise income tax 51 expense 17 Profits after enterprise income tax 60 Hanoi, 14 March 2022 Preparer (sign, name) Chief Accountant (sign, name) Legal Representative (sign, name) 2.3 Some comments on accounting for sales and business result determination at Hoang Phat Production Trading And Services Company Limited After learning about the practices of the business activities as well as the accounting system at Hoang Phat Production Trading and Services, especially about accounting for sales and business results determination at the company, I realized that the company's accounting system is doing working pretty well and bringing many practical benefits to the company in the past time However, like most other companies, the accounting for sales and business results determination work at the company is not immune to limitations and shortcomings Below are my comments on the strength and weakness of accounting work, especially the organization of 118 accounting work for sales and business results determination at Hoang Phat Production Trading and Services Co., Ltd 2.3.1 Strength 2.3.1.1 Accounting organization and accounting work: The company's accounting organization is organized logically, scientifically and consistently from top to bottom, in line with the actual size and situation of the company Functions and duties of the members of the accounting department are clearly assigned, independent of each other but still unified and under the direction of the Chief Accountant and the Board of Directors The accounting department is focused on promoting and operating effectively, so the recording of transactions and accounting reports is done quite quickly, ensuring accurate and timely information for management requirements as well as providing information to the outside The accountants coordinate smoothly and support each other in accounting work The company's accounting staff consists of staff who are formally trained, enthusiastic, experienced, well-versed in the current financial and accounting regime and have professional ethics Besides, all of the staff of the accounting department are highly sense of responsibility, seriousness to their work, and always ready to learn and update new information, knowledge and requirements, to meet both quantity and quality requirements, so the accounting work, especially accounting for sales and business results determination of company is performed completely, accurately and with few errors At the same time, the company always creates conditions for professional improvement training for their staff to meet the increasing requirements of accounting work 2.3.1.2 Accounting policies, accounting regimes and accounting system The company strictly complies with the Accounting Law and Vietnamese Accounting Standards, and thê accounting regime according to Circular 133/2016 TTBTC dated August 26, 2016 of the Ministry of Finance (1) Accounting period: Kì kế tốn cơng ty 01 January to 31 December hàng năm, quán năm phù hợp với thông tư, quy định kế tốn hành phần lớn cơng ty khác thị trường, giúp thuận tiện cho việc so sánh, đánh giá kết kinh doanh công ty so với công ty khác thị trường (2) Accounting form: Cơng ty sử dụng hình thức kế tốn Journal - Ledger - Đây hình thức đơn giản, dễ làm, dễ kiểm tra, đối chiếu phù hợp với đơn vị có quy 119 mơ nhỏ, nghiệp vụ kinh tế, nội dung hoạt động kinh tế đơn giản, hồn tồn phù hợp với quy mơ, điều kiện công ty (3) Accounting vouchers system: Cơng ty ln thực tốt quy định hóa đơn, chứng từ theo quy định mặt hình thức, nội dung quan ban, ngành liên quan Căn vào chế độ kế toán hành Circular 133/2016 TT-BTC dated August 26, 2016 of the Ministry of Finance, cơng ty tự xây dựng cho hệ thống chứng từ, hóa đơn phù hợp (4) Accounting books system: Sổ sách kế tốn cơng ty in để lưu trữ cách đầy đủ, rõ ràng, hợp lý khoa học, phần đóng góp vào thành công chung phát triển lĩnh vực kinh doanh tồn cơng ty Nhìn chung cơng tác kế tốn cơng ty thực hồn chỉnh mặt hình thức nội dung (5) Accounting reporting system: Hệ thống báo cáo kế tốn cơng ty prepare according to the lastest regulations of the Ministry of Finance about the preparation and presentation of Financial Statement including Circular 133/2016/TT-BTC, từ giúp cho hệ thơng báo cáo cơng ty qn năm tài với công ty khác thị trường, làm sở để so sánh, đánh giá kết kinh doanh công ty dễ dàng nhanh chóng (6) Accounting software: Cơng ty áp dụng phần mềm Fast Accounting để hỗ trợ công tác kế tốn cơng ty Phần mềm cải tiến thiết lập dựa quy mô, đặc điểm tình hình kinh doanh cơng ty Nhờ có phần mềm kế tốn mà cơng tác kế tốn taị công ty trở nên nhẹ nhàng, nhanh gọn xác hơn, thơng tin kế tốn cung cấp xảy sai sót so với hạch tốn thủ cơng Bên cạnh đó, việc áp dụng phần mềm kế toán accounting for sales and business result determination giúp công ty dễ dàng theo dõi doanh thu, chi phí, phải thu phải trả cho đối tượng cụ thể, từ giúp cơng ty có định tài kịp thời, xác để đạt mục tiêu tối đa hóa lợi nhuận công ty 2.3.1.3 About the company's tax payment obligations to the state: 120 The accounting and declaration of VAT is done quite closely, the company always performs the calculation correctly and sufficiently the amount of tax payable into the state budget The company declares tax and submits the list by quarter In conclusion, the accounting department conducts the recording, fully reflecting, timely and accurate recording of the situation of providing services to customers Besides, accountants of Hoang Phat has accounted for revenue and expenses in a timely manner and promptly provided business results to the Board of Directors, without delay The accountant has clearly defined the input costs for each service package, avoiding the omission of cost or duplicate costing, leading to the most accurate impact on determining business results 2.3.2 Weakness Besides the mentioned advantages, the accounting for sales and business result determination of the company also has the following limitations: (1) Accounting accounts system: Hệ thống tài khoản công ty thiết lập chưa match với Circular 133/2016 TT-BTC dated August 26, 2016 of the Ministry of Finance, cụ thể: tài khoản sử dụng phản ánh revenue deductions, cơng ty thay theo dõi bên Nợ tài khoản 511 - Revenues from sales and services provisions cơng ty lại theo dõi tài khoản 521 - tài khoản lược bỏ bớt thông tư 133 (2) Bên cạnh đó, cơng ty chưa mở tài khoản chi tiết hóa đến đối tượng, giao dịch cụ thể khiến cho doanh thu, chi phí loại đối tượng, sản phẩm chưa nhận chi tiết, khiến cho việc theo dõi, kiểm sốt cơng tác quản trị gặp nhiều khó khăn Do đó, chưa thể lập báo cáo doanh thu, chi phí bán hàng theo loại sản phẩm không giúp (3) Cơng ty chưa có nhiều hoạt động chiết khấu, giảm giá cho khách hàng: Thực giảm giá, chiết khấu cho khách hàng giải pháp thương mại đặc biệt hiệu việc kích thích nhu cầu mua hàng khách hàng, đó, khơng có nhiều chương trình giảm giá, chiết khấu cho người mua tác động phần đến doanh thu bán hàng hóa doanh nghiệp kỳ (4) The company does not focus on management accounting work 121 (5) The reports, especially the financial statements, are only listed but cannot be analyzed Analyzing financial statements helps directors understand the current financial situation of the company so that they can make timely decisions However, accounting software in the company does not calculate the economic indicators that provide this information 122 CONCLUSION OF CHAPTER 2: In recent years, there have been many fluctuations in the domestic and international economic context, causing the entire economy in general and Hoang Phat Production, Trading, and Services Co Ltd., in particular, has met many difficulties in the input market such as rising raw material prices, fierce competition from domestic and foreign companies However, through the process of inquiring at Hoang Phat Production, Trading, and Services Co Ltd I found that the company has operated effectively The company had the ability to produce high-quality products, ensure quality and quantity to meet consumer demand in the market, expand its business scale, consumer markets, and promote the consumption of products to increase revenue for the company This is due to the relentless efforts of the management and all employees in the company trying to overcome difficulties to have a firm foothold in the market However, in addition to the achievements, the company still has many limitations and shortcomings in the issue of consumer products The company needs to try harder to further improve production and business efficiency and especially promote product consumption 123 CHAPTER 3: SOME SUGGESTIONS ON ACCOUNTING FOR REVENUE AND BUSINESS RESULT IN HOANG PHAT PRODUCTION TRADING AND SERVICES COMPANY LIMITED 3.1 Requirements and principles to complete accounting for revenue and business result in Hoang Phat Production Trading And Services Company Limited 3.1.1 Requirements In the context of an increasingly competitive market economy, especially in the context of an increasingly difficult economy due to the recent global economic crisis and COVID-19 pandemic; companies in the market face many difficulties and challenges Businesses must be responsible for their business activities, cover the costs and have profits, so businesses always attach importance to and promote the consumption of goods to collect the highest profit In order to make effective sales activities, the role of accounting revenue and business result is very important Accounting for revenue and business result is the main accounting part in commercial company and as a management tool to improve sales efficiency, it needs to be organized in a way scientific and reasonable to serve the business process of company On the other hand, the company has just produced and traded business, completing accounting for revenue and business results at Hoang Phat Production Trading and Services is essential In order for the accountant to fulfill his/her role in management, it is necessary that organizing accounting work in general and accounting for revenue and business results in particular at the company must comply with the following requirements and principles: 3.1.1 Requirements: - Appropriate requirements: The policies and measures must be consistent with the characteristics of the business operation as well as the financial ability of the company - Accurate and prompt requirements: • Accounting data must reflect accurately and promptly Accurate and prompt reflection is essential and important for authorities such as tax authorities, banks and directors to give them specific directions and plans for the next business period 124 • partners Data must be clear and public This is a concern for both businesses and - Savings and efficiency requirements: Ensuring saving, efficiency and feasibility - Unified requirements: Ensuring the unified implementation of new proposals in terms of content and methods throughout the accounting departments as well as throughout the company 3.1.2 Principles: - Must comply with the provisions in regulations of State accounting, accounting law, in accordance with the macro management requirements of the State; - Must comply with accounting standards and regimes of financial and accounting regulations issued by the State; - Must be consistent with the characteristics of production and business activities, characteristics of management organization, scale and location of the company; - Must be consistent with the requirements and professional qualifications of the company's staff; - Organization of accounting work must ensure the principle of saving and efficiency 3.2 Some suggestions for improvement of accounting for revenue and business resutl in Hoang Phat Production Trading And Services Company Limited Suggestion 1: Chuẩn hóa tài khoản theo quy định để hệ thống tài khoản không bị cồng kềnh Suggestion 2: Mở thêm tài khoản chi tiết theo đối tượng, chất giao dịch Ví dụ: loại hàng hóa mở tài khoản doanh thu, giá vốn chi tiết để theo dõi riêng Nên phân loại nhóm khách hàng để tiện theo dõi công nợ phải thu, phải trả, ví dụ: chia thành Nhóm Khách lẻ - Nhóm Ngân hàng – Nhóm Cơng ty Suggestion 3: Building the strategy to promote consumption through sale discount and sales allowances: 125 [………] Suggestion 4: Cần phát triển công tác kế tốn quản trị cơng ty The company has not report system to provide information about the business situation in the period, the reason of volatility of financial indicators in the year in order to analyze in detail financial and non-financial ratios The company should specifically analyze the financial indicators and ratios so that reviewers can understand clearly the company's operational situation, especially the board of directors has the basis to make future decisions Currently, the company's management accounting system has not been focused on building and developing, so the company should use the contribution income statement The contribution income statement, also known as the contribution margin income statement, measures costs based on the functional area or segment of a business This is different from a traditional income statement, which does not distinguish between fixed- and variable-production and selling costs, and which considers the corporation as a whole rather than each individual segment The contribution income statement is useful to internal decision-makers • Break-Even Analysis One of the primary uses of the contribution income statement is the break-even analysis of a particular segment The contribution margin is first calculated by taking sales revenue minus the variable selling and manufacturing costs to get the contribution margin The contribution margin is then compared to fixed costs When contribution margin minus fixed costs equal zero, the break-even point has been reached If a company has additional sales revenue beyond the break-even point, it makes profit If the contribution margin is less than the break-even point, the company is operating at a loss 126 • Cost-Volume-Profit Analysis Cost-Volume-Profit analyses consist of different versions of the basic equation "profit equals sales minus variable expenses minus fixed expenses." Managers manipulate this equation in various ways in order to help them create sales goals The equation is also used to calculate a company's margin of safety, which is the amount that sales can decline before the company begins to take a loss instead of making profits Table 3.1: Contribution income statement format Revenue - Variable production expenses (such as materials, supplies, and variable overhead) - Variable selling and administrative expenses = Contribution margin - Fixed production expenses (including most overhead) = Fixed selling and administrative expenses Net profit or loss Unlike a traditional income statement, the expenses are bifurcated based on how the cost behaves Variable cost includes direct material, direct labor, variable overheads, and fixed overheads It does not matter if your expenses are production expenses or selling and administrative expenses If they are variable, they must be included in variable costs The same thing goes with fixed expenses, if they are fixed, they must be included in fixed costs - The company applied the static budget The static budget amounts not change They remain unchanged from the amounts established at the time that the static budget was prepared and approved The company should apply the flexible budget because it is more sophisticated and useful than a static budget A flexible budget is a series of budgets prepared for various levels of activities, revenues and expenses Flexible budgets get modified during the year for actual sales levels, changes in cost of production and virtually any other change in business operating conditions This flexibility to adapt to change is useful to owners and managers 127 Variable expenses in flexible budgets are defined as percentages of sales For example, if sales were to increase dramatically, flexible budgets would get adjusted to increase spending on marketing to take even more advantage of unexpected increases in revenues Revenues and expenses are constantly adjusted in flexible budgets for current operating conditions New environmental regulations might increase the costs of production and could require the purchase of different types of machines Weather conditions could increase shipping costs and result in delayed shipments to customers With flexible budgets, managers are constantly updating their projections and cost controls with current information The most significant advantage of flexible budgets over static ones is the ability to adapt to changes in the real world Nothing ever stays the same, and management has the responsibility to respond to unanticipated adverse conditions and to take advantage of unexpected opportunities Sugestion 5: Cần thực đánh giá, phân tích báo cáo tài định kỳ để nắm bắt tình hình, kết kinh doanh cơng ty để có điều chỉnh kịp thời […………] 3.3 Conditions for implementing the solutions The completion of accounting for sales and determination of business results at Hoang Phat Production Trading and Services Co., Ltd., besides the requirements and suggestions for solutions, it is impossible not to have the conditions to implement the solution I would like to propose the following conditions in order to contribute to the improvement of sales accounting and the determination of business results at the company: Firstly, whether the completion is effective, practical or not depends first on the human factor Therefore, officers and employees of the whole company in general and the Accounting department in particular need to be trained and take more courses to improve their professional qualifications in corporate accounting Legal documents related to the accounting regime, Vietnamese accounting standards and international accounting standards, and accounting laws need to be promptly updated and deployed to the accounting department as quickly as possible From here, accountants need to read daily news about the market economy, new policies issued by the State, about documents and official dispatches guiding the implementation to find opportunities to cover Complete and expand the current accounting practice, better react to new events and transactions 128 Secondly, managers of the company especially the Head of the Accounting Department, need to pay close attention, and check and closely monitor each accounting function as well as all production activities business performance, thereby showing how to overcome the remaining limitations in the accounting work of the enterprise, minimizing the risks that may occur Third, ensuring the flexibility, effective use, reliability and high security of the computer system at the company is also considered as one of the conditions that need attention The network transmission needs to be stable and uninterrupted to facilitate the exchange of information and documents In addition, security issues should also be noted to avoid stealing important company data Fourth, the important role in sales as well as sales accounting and determining business results should be disseminated and deployed to all leaders, officers and employees at the company The more complete and developed this accounting work, the more affirming the company's position in the market CONCLUSION OF CHAPTER Chapter of the thesis presents the focus of suggestions to improve sales accounting and determine business results and details the requirements, contents, and opinions as well as affirms the necessity of perfecting this accounting work at Hoang Phat Production Trading and Services Company Limited Besides, I have also given some conditions to implement the proposed solutions 129 CONCLUSION The open market economy is a great opportunity for enterprises in Vietnam to integrate and develop, but at the same time, it creates big challenges Therefore, in order to survive and develop, enterprises must constantly improve the management and production and business organization To this, accounting is an indispensable part of every business The internship at Hoang Phat Production Trading and Services limited company is an opportunity for me to approach reality and learn experiences for myself With the topic "Accounting for sales and business result determination in Hoang Phat Production Trading and Services Limited company" in my thesis, I have a better understanding of the knowledge learned at the school about organizing accounting work, accounting bookkeeping method and better understanding how these issues are applied to fit and be flexible Thereby, I also realized the revenue strength and weakness of accounting for sales and business result in Hoang Phat Production Trading and Services Limited company, from which I proposed my comments to improve accounting for revenue and business result in the company so that the company can refer With the enthusiastic help of the Instructor - Dr Nguyen Tuan Anh and my colleagues, I completed my thesis However, due to limited knowledge, my thesis could not be avoided certain mistakes I look forward to receiving comments and suggestions from teachers to make the thesis more complete! Thank you sincerely! 130