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

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 sales and business results determination at Hoang PhatProduction, 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 sales and business results determination

- Research and describe the actual accounting for accounting for sales and business results determination in Hoang Phat Production Trading and Services Company Limited

- Analyzing, evaluating and proposing some ideas to improve accounting for sales and business results determination in Hoang Phat ProductionTrading and Services Company Limited

Research objects and scope of the dissertation

Researching the theoretical background and the reality of accounting for sales and business results determination 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.

- Regarding content: Focusing on the actual accounting for sales and business results determination 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 CompanyLimited 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 3 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 ServicesCompany Limited

GENERAL THEORY ON ACCOUNTING FOR SALES AND

Importance of accounting for sales and business result determination in a

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

- Cost of goods sold and CIT expenses -

Business administration expenses Result from financial activities

Total net revenue from financial activities

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.

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 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.

Methods of sales and payment

- Based on the way that products are transferred 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.

 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).

- Pay immediately by cash on hand and cash at bank

Under this method, when the buyer receives the goods from the company, they will pay immediately to the company in cash or bank deposits.

This method is often used in case the buyer is a small customer, buying goods in small quantities or being able to pay immediately at the time of delivery.

Under this method, the buyer pays the money after the time of receiving a certain time agreed by the two parties, at the end of that time, the buyer will have to pay all the value of the purchased goods plus an additional amount fee called interest from deferred payment

The method of payment by installments is essentially a method of lending that, due to the same repayment periods and interest periods, the repayment amount of each period is equal, the interest is calculated on the outstanding principal balance and the actual number of days of the repayment period

Accounting for sales and business result determination in a commercial company

1.3.1 Accounting for sales revenue and revenue deductions

Definition of revenue : Revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants (VAS 01 – Framework)

Thus, revenue includes only the total value of the economic benefits received or will be received by the enterprise Revenues collected on behalf of a third party that are not a source of economic benefits and do not increase the equity of the enterprise will not be considered as revenue.

Revenue from sales and service provision is revenue of production and trading activities from the following transactions and operations:

Sales: Selling products manufactured by business or goods purchased and real estates invested

Service provision: Performing services agreed in contract for one or more accounting periods such as providing transportation or travel services, leasing of fiaxed assets in ways of operating lease, revenue form construction contract,…

Revenue deductions are the amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any trade discounts allowed The sales reported on a company’s financial statement is a net sales number reflecting these deductions

Revenue deductions account is used to record the deducted adjusted amounts in revenue from sales and service provisions incurred in the period, including trade discounts, sales returns and allowances This account does not record the taxes deducted in revenue such as output VAT payable under subtraction method.

Trade discounts are the amount of money that enterprise reduces the listed price for customers who bought goods and services in large volume in accordance with the signed agreement between the two parties

Sales return is the value of the volume of goods previously determined to be sold that is returned or refused to pay by the customer due to the following reasons: breaching the commitment or the economic contract, or being wrong quantity, quality or specifications.

Sales allowance is a reduction in the selling price made by seller for buyers when the goods are not in the same specification or wrong quantity, quality as those mentioned in the economic contract

1.3.1.3 Accounting principles for revenue and revenue deductions

Revenue is recorded at the time the transaction arises when the economic benefits are firmly gained that are determined under the fair value of the amount to be received, regardless of having earned money or being going to earn money.

Revenue and expense setting up such revenue must be recorded simultaneously under the matching principle However, in some cases, matching principles may conflict with the prudence principle, accountants must base on the nature and accounting standards to record transactions honestly and reasonably.

• Revenue must be recorded in accordance with nature rather than the form or the name of the transaction and must be allocated under obligations of providing goods or services.

- Time and basis for recording accounting revenue and taxable revenue may vary depending on the specific situation The taxable revenue is only used to determine tax payable as prescribed by law;

- Revenue recorded shall only include revenue of the reporting period. For accounts that record revenue without balance, at the end of period, accountants must transfer revenue to determine income statement.

(1) Conditions for revenue recognition a) An enterprise only recognizes sales revenue when the following conditions are satisfied simultaneously:

- The enterprise has transferred most of the risks and benefits associated with the ownership of products and goods to the buyers;

- The enterprise no longer retains the right to manage the goods as the owner or the right to control the goods;

- The revenue can be measured reliably When the contract stipulates that the buyer is entitled to return the purchased products and goods under specific conditions, the business is only allowed to recognize revenue when those specific conditions no longer exist and the buyer cannot the right to return goods and goods (except for cases where the customer has the right to return goods in the form of exchange for other goods or services);

- The enterprise has or will receive economic benefits from the sale transaction;

- Can determine the expenses related to the sale transaction. b) An enterprise only recognizes revenue from service provision when the following conditions are satisfied simultaneously:

- The revenue can be measured reliably Where the contract provides that the buyer is granted the right to return services purchased under specific conditions, revenue is recognized only when those specific conditions no longer exist and the buyer is not granted the right to return payments for services rendered;

- The enterprise has or will receive economic benefits from the transaction of providing such services;

- Can determine the part of the work completed at the time of the report;

- Can determine the costs incurred for the transaction and the costs identified to complete the transaction providing that service.

(2) In case an economic contract includes multiple transactions, the enterprise must identify the transactions to recognize revenue in accordance with the standards, for example

- Where the economic contract stipulates the sale and provision of after- sales services (in addition to the normal warranty terms), the enterprise must separately record sales revenue and service provision revenue;

- Where the contract stipulates that the seller is responsible for installing products and goods for the buyer, revenue shall be recognized only after the installation is completed;

Accounting books system and presentation on financial statements

1.4.1 Accounting books used in accounting for sales and business results determination

Enterprises must base themselves on the accounting book system selected by the Ministry of Finance and apply a system of accounting books according to the accounting form that the enterprise has chosen.Types of accounting books and accounting book configurations specified in Circular 133 include:

Types of the accounting books include: General accounting books and Detailed accounting books

- General accounting books includes: Journal, Ledger.

+ The journal is used to record economic and financial transactions arising in each accounting period and in an accounting year according to the chronological order and the reciprocal relationship between the accounts of such transactions The accounting data in the journal reflects the total arising on the Debit and Credit side of all accounting accounts used at the enterprise The log must fully reflect the following contents:

• Date, month of book-keeping;

• Numbers and dates of accounting vouchers used as the basis for book-entry;

• Summary of contents of arising economic and financial branches;

• The amount of money generated by the economic or financial sector.

+ The Ledger is used to record economic and financial transactions arising in each period and in an accounting year according to the accounting accounts specified in the accounting account regime applicable to enterprises The accounting data on the books reflect the total situation of assets, capital sources, situation and results of production and business activities of enterprises The Ledger must fully reflect the following contents:

• Numbers and dates of accounting vouchers used as the basis for book entry;

• Summary of contents of arising economic and financial branches;

• Amount of arising economic and financial transactions shall be recorded in the Debit or Credit side of each account.

- Detailed accounting books, including detailed accounting books and accounting cards:

+ Detailed accounting books and accounting cards are used to record arising economic and financial transactions related to necessary accounting objects that need to be monitored in detail according to management requirements.

+ Data on detailed accounting books and cards provide information for the management of each type of asset, capital, revenue, and expenses that have not been detailed in the Journal and Ledger Number, results of the window, detailed accounting card optional.

+ Enterprises shall base themselves on the guiding regulations in the Accounting Regime on detailed accounting books and cards and the enterprise's management requirements to open necessary and appropriate detailed accounting books and cards.

Accountants use the following main types of books:

+ General Journal: Reflecting all arising economic and financial transactions in the chronological order of their occurrence.

+ Sales diary, Cash collection diary, Bank deposit diary

+ Ledger: Account 511, Account 632, Account 642, Account 911, etc.

Accountants use the following main types of books:

+ Register of book-entry vouchers: Record in chronological order the arising economic and financial transactions that have been prepared with book-entry vouchers.

+ Ledger: Account 511, Account 632, Account 642, Account 911 + Detailed book: Account 511, Account 632, Account 6421, Account 6422

The accounting records the consumption of finished products and determines the sales results in the following books:

+ Listing 5: Collection of selling and administrative expenses

+ Listing 6: List of prepaid expenses and payable expenses

+ Vouchers Journal No 8, Vouchers Journal No 10

+ Relevant detailed books: Account 642, Account 511, Account 911 and related accounting books

1.4.2 Presenting information about sales accounting and determining business results on Financial Statements

The preparation and presentation of financial statements of the company comply with the requirements specified in:

The accounting standard No 21 "Presentation of financial statements"

The current accounting regime in accordance with Circular 133. 2016/TT – BTC dated August 26, 2016 of the Ministry of Finance,

Vietnamese accounting standards promulgated by the Ministry ofFinance and accompanying documents on amendments, supplements and implementation guidance

In financial statements, information about accounting for sales and business result determination are presented in the following items:

+ Taxes and other payables to State: The data is taken from the credit side balance of the ledger account 333

+ Undistributed post-tax profits: The data is taken from the credit side balance of the account ledger account 421

+ Revenue from sales and services provision (code 01): The data is taken from the accumulated credit side of the ledger account 511

+ Revenue deductions (code 02): The data is taken from the accumulated debit side of the ledger account.511

+ Costs of goods sold (code 11): The data is taken from the accumulated credit side of the ledger account 632 corresponding to the debit side of the ledger account 911

+ Financial income (code 21): The data is taken from the accumulated debit side of the ledger account 515 corresponding to the credit side of the ledger account 911

+ Financial expense (code 22): The data is taken from the accumulated credit side of the ledger account 635 corresponding to the debit side of the ledger account 911

+ Business administration expenses (code 24): The data is taken from the accumulated credit side of the ledger account 642 corresponding to the debit side of the ledger account 911

+ Other income (code 31): The data is taken from the accumulated debit side of the ledger account 711 corresponding to the credit side of the ledger account 911

+ Other expenses (code 32): The data is taken from the accumulated credit side of the ledger Acc.811 corresponding to the debit side of the ledger account 911

+ Corporate income tax expense (code 51): The data is taken from the accumulated credit side of the ledger account 821 corresponding to the debit side of the ledger account 911

+ Profits after corporate income tax (code 60):

Accounting for revenue and business result in application with accounting software

The development history of the establishment of information and inspection asset and asset mobilization systems, all legal economic relations, and the development of information technology have demonstrated that the application with accounting software to enterprises is necessary Current accounting software is generally high speed, diverse and accurate The application of software will create reliability and make difference in business advantages Nowadays most businesses use software for their accounting work.

For revenue and evaluating business result accountants, the use of software is extremely important Accounting software for this part has the following advantages:

- Help keep business account conveniently and quickly, information is handled promptly.

- Software can calculate the cost of goods sold furthermore solve a large amount of calculations.

- Cost of goods sold, revenue as well as information to determine sales results are stored fully and safely because users can set passwords for accounting information to use.

Step 1: Organize the coding of legal objects.

Step 2: Organize the accounting voucher system in accordance with the conditions for implementing accounting on accounting software.

Step 3: Organize the system of accounting accounts.

Step 4: Select and apply accounting forms.

Specifically with accounting revenue and evaluating business results, we have the process of processing information about accounting revenue and evaluating business results:

(1) Every day, accountants base on accounting vouchers or a consolidated table of inspected vouchers to be used as a basis for book recording, to determine debit accounts, and credit accounts, to enter data to the computer according to the tables designed on the accounting software. According to the accounting software process, the information is automatically updated in general accounting books, ledger books, diary books and related accounting books.

(2) At the end of the month (or any time needed), the accountant performs transfer entries to determine sales results as profit or loss in the accounting period and provides information for users of information The comparison between the general data and detailed data is done automatically and always ensures accuracy and honesty according to the information entered in the period Accountants may check and compare between accounting books and financial reports after printing them into paper, binding them and carrying out legal procedures as prescribed by manual accounting books.

Process of processing revenue accounting information and determining business result

Step 1: Business accounting (enter data entries into software)

Delivery finished goods, recording revenue

Accounting and collection of selling and administration expenses

Accounting of revenue, other income and other expenses

Step 2: Performing transfer professions and determining results

Transfer to determine net revenue

Transfer costs and revenue in the period to determine results.

Detailed and general accounting books

Revenue and expense accounting report books

1.5.1 Principles and requirements for accounting organization in terms of using accounting software

Firstly, the organization in terms of using accounting software must ensure scientific and rationality, on the basis of compliance with the Law on Accounting, in accordance with the requirements of macro management, with accounting standards and policies and regulations of State

Secondly, the organization of accounting work in the enterprise must ensure that it is suitable to the specific characteristics, conditions and circumstances of the enterprise.

Thirdly, this organization must ensure that the receipt, inspection,processing and provision of economic and financial information of the enterprise must meet the management requirements of the enterprise and the State.

Moreover, the organization in terms of using accounting software must be consistent with the payroll and qualifications of the existing contingent of accounting staff.

Finally, the organization in terms of using accounting software needs to thoroughly grasp the principles of thrift and efficiency.

1.5.2 Sales accounting tasks and determining business results in terms of using accounting software

First, declare the objects to be managed in the list of accounts, the list of customers, the list of finished products, goods and the list of documents.

Second, set default values, implicit tax entries, cost of goods sold in the system configuration.

Third, enter data of arising transactions about sales activities, financial activities and other activities into the machine.

Fourth, make year-end closing entries for expense, revenue and other income accounts to determine business results.

Fifth, enter complete and accurate data on the quantity of goods sold and consumed internally.

Sixth, identify and install formulas to calculate the cost of goods sold, develop standards for allocating selling expenses, and reasonable administrative expenses to properly determine sales results.

Seventh, operate according to the instructions of accounting software to provide accurate and truthful information.

Eight, based on the requirements of the business, the user declares the necessary requirements with the accounting software to print out reports for managers.

1.5.3 Characteristics of sales accounting and determination of business results in terms of using accounting software

After entering data of arising economic transactions into the machine, the accounting software will automatically process and update the data in the relevant accounting books.

For the part of accounting for sales and determining business results, there are also transactions on payable VAT and input VAT When entering the tax rate of each type of product, goods or service, the software will automatically calculate and enter the entry to reflect VAT Besides, the accounting software is also designed to be compatible with tax declaration support software.

The entries for the transfer of expenses, revenue and other income to determine business results can be done automatically on the software and are usually designed under the function of automatic closing entries.

Daily, accounting vouchers or summary of accounting vouchers on goods have been checked, used as a basis for book entry and identification of Debit and Credit accounts for data entry into the computer according to the tables and charts that are pre-designed on the software.

The information is automatically entered into the general accounting books and related detailed accounting books and cards.

At the end of the month, accountants perform book closing operations and prepare financial statements The comparison between aggregate data and detailed data is done automatically Accountants can check and compare data between accounting books and financial statements after they are printed on paper.

Perform operations to print financial statements as prescribed.

At the end of the month and at the end of the year, the general accounting books and detailed accounting books are printed on paper, bound into volumes and carry out legal procedures in accordance with regulations on accounting books.

The implementation of computerized accounting organization must ensure compliance with the standards and principles defined in the field of finance and accounting, in accordance with the characteristics, nature of operations, scale and scope business activities.

The sales process and determining business results are important activities of the company Businesses that perform well in accounting for sales and business results determination will help businesses make appropriate business decisions and strategies In addition, accounting information about sales and determining business results is an important basis for information users to evaluate the financial capacity and business situation of the enterprise and determine the obligations to the State Determining business results also helps promote the effective use of resources and allocate resources for the entire national economy in general and for such enterprises in particular.

In Chapter 1, I presented a general theory on the accounting for sales and business results determination, next I will present the actual accounting for sales and business results determination in Hoang Phat Production Trading and Services Company Limited in Chapter 2.

ACCOUNTING FOR SALES AND BUSINESS RESULT

Overview about Hoang Phat Production Trading and Services Company Limited

- Business name: Hoang Phat Production Trading and Services Company Limited

- Form of business organization: Limited liability company with two members

- Type of business: Hybird business

- Head office: No 53 Hang Dieu, Cua Dong Ward, Hoan Kiem District, Hanoi, Vietnam

- Warehouse address: No 15 alley 56/179 Thach Cau, Long Bien ward, Long Bien District, Hanoi, Vietnam

+ Deputy Director: Nguyen Thu Trang

2.1.1 Establishment and development of Hoang Phat Production Trading and Services Company Limited

Established on August 1, 2005, and officially operated on September 30,

2005, Hoang Phat Production, Trading and Service Co., Ltd has now had more than 15 years of experience in the field of trading, supplying imitation leather fabrics, plastic films, PVC coated fabrics of various colors, PVC products and other items Hoang Phat has a long-term, durable working apparatus, always adapting to the development and new requirements of society and economy, meeting the requirements of customers on the ability to supply products in quantities of medium and large to very large Hoang Phat has been supplying products to production companies and distributing goods to retailers stretching from North to South With more than 15 years of development, Hoang Phat has achieved certain achievements, the business scale is increasingly expanding and the customer file is increasingly diverse. Besides, Hoang Phat is always ready to listen, cooperate and share, towards the goal of satisfying the requirements of all customers In addition, the company also regularly participates in supporting sick and difficult children at the National Children's Hospital, participating in the program of Donating masks and hand sanitizer during the COVID-19 pandemic.

In recent years, there have been many fluctuations in the domestic and international economic context, causing the entire economy in general andHoang 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 quite effectively.

The 2 years of the COVID-19 pandemic have affected the company's business and operations quite a lot, but the company's revenue from sales and service provision in 2021 reached VND 137,685,508,483, an increase of VND 9.3 billion, equivalent to 7% compared to the previous year Regarding the services and products that the company provides, more and more good feedback is received, there are many long-term customers who always believe in the company's services and products and always support new products and services of the company.

Moreover, 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, and consumer markets, and promote the consumption of products to increase revenue for the company.

2.1.2 Characteristics of production and business organization in Hoang Phat Production Trading and Services Company Limited

2.1.2.1 Characteristics of production and business organization Hoang Phat's products always have full papers, legal invoices as well as certificates at the request of customers Currently, Hoang Phat Production Trading & Service Co., Ltd has provided some typical products such as Color-printed PVC coated vinyl fabric; Colored PVC film; PVC film for bag production; PVC bag, Bed sheet,…

In the past years, facing the difficulties and challenges of the economy, in order to maintain operations and develop, the company must proactively come up with solutions to optimize their operations The Board of Directors of Hoang Phat Production Trading & Service Co., Ltd has carefully analyzed the subjective and objective difficulties affecting the company, thereby giving the right direction and development strategy to stabilize the production,promoting the activities of the key business department in each time of the year with the motto of promoting internal resources, taking advantage of external forces, upholding the spirit of mastery of employees, paying attention to improving the working environment, equipping machinery and equipment to reduce labor consumption, improve product quality, diversify industries, etc.

The business lines that the company has registered for business is below:

4719 Other retail sale in general stores

4933 Transport of goods by road

5210 Warehousing and storage of goods

In which, the company operates mainly in the field of trading, supplying imitation leather fabrics, plastic films, PVC coated fabrics of various colors and other PVC products.

2.1.3 Characteristics of management organization in Hoang Phat Production Trading and Services Company Limited

Hoang Phat Production Trading and Services Company Limited organizes and manages the company according to the following diagram:

PICTURE 2.1 ORGANIZATION CHART OF THE MANAGEMENT APPARATUS AT

The Board of Directors at Hoang Phat Production Trading and Service Co., Ltd includes:

 The director is the person who runs the company's day-to-day business operations, the responsibility of the director as follows:

 Deciding on issues related to the company's day-to-day business operations;

 Organizing the implementation of the company's business plan and investment;

 Issuing the company's internal management process,

 Appointment, dismissal and removal of managers in the company

 Evaluating, and rewarding employees, participating in interviews new employees

 Setting goals and policies for management departments.

 Deputy Director: Nguyen Thu Trang

Duties of the Deputy Director include:

 Helping the director manage and run the company's activities according to the director's assignment;

 Proactively deploying and performing assigned tasks,

 Taking responsibility before the Director for operational results.

 Setting goals and policies for the management of departments.

 Analyzing, arranging the personnel, urging and managing resources in accordance with the company's regulations;

 Training, evaluating, and rewarding employees, participating in interviews, and training new employees.

 Making sure that the staff meets their requirements, functions and tasks.

Sale department is responsible for:

 Implementing business development plans and directions.

 Synthesizing the input and output management tasks of the company, and advising the Board of Directors based on the achieved results.

 Maintaining and developing relationships with customers

 Simultaneously performing different tasks given by direct superiors.

 Organizing accounting system in accordance with the production requirements and the current financial and accounting regime.

 Advising the Board of Directors (BOD) on the accounting regime and updating the changes of the accounting regime in accordance with the law.

 Recording, reflecting fully, promptly, accurately and honestly the economic operations arising in the production and business process strictly according to the prescribed accounting regime.

 Provide timely and accurate financial data for the director to properly plan the business.

 Making financial and business plans by month, quarter and year.

The planning department has the function of advising the Board ofDirectors and other senior managers in the company on issues related to planning the fields of production and business, technical management, finance, and investment In addition, the planning department also regularly inspect, monitor, and manage business operations.

 Directly carrying out the production of the company

 Having responsible for designing goods and products.

 Controlling every aspect of production operations By controlling production, the production department can effectively use resources, machinery, and labor in a rational way, minimizing waste.

 Conducting research to improve the company's products by changing or innovating part or all of the products.

Undertaking all the work related to administrative processes and procedures; managing and supervising the work of employees in the company; and providing legal advice to the Board of Directors when necessary

 Managing all issues related to construction, management and development of quality and sustainable human resources to ensure business development.

 Recruiting, and training human resources of the company

 In charge of taking care of the lives of all employees in the company.

 Representing the company to handle disputes occurring at the office.

 Building and managing the welfare and remuneration regimes for the company's personnel

 Tracking the quality and quantity of the inventories

 Arranging goods in the warehouse

 Ensuring standard goods in stock

 Periodically, checking inventories with the warehouse accountant as assigned

 Planning, handling and solving problems related to the transportation of inventories and goods

 Carrying out transport of materials and goods to customers or from suppliers to the company's warehouse

2.1.4 Characteristics of accounting organization in Hoang Phat Production Trading and Services Company Limited

2.1.4.1 Characteristics of accounting department organization:

In order to meet the requirements in accordance with the size, characteristics of business organization, business management as well as the features of accounting work, Hoang Phat Production Trading and Service Co., Ltd organizes accounting work according to the concentrated accounting model as follows:

PICTURE 2.2 ORGANIZATION CHART OF ACCOUNTING APPARATUS AT

 Leading and assigning work to the staffs in the Accounting department

 Managing accounting software as well as managing all invoices,vouchers, accounting books, and other accounting documents of the company.

 In charge of synthesizing accounting books and documents, making financial statements and taking main responsibility for the accounting work of the company.

 Responsible for tracking, processing and accounting for main accounting sections

Supporting the chief accountant in setting up sales invoices, value-added invoices and other documents related to the Sales accounting section; monitoring, processing and accounting for the Sales accounting section

Supporting the chief accountant in setting up warehouse receipt notes, warehouse delivery notes; managing in terms of value and quantity of inventories in and out of the company; in charge of tracking, processing and accounting of materials, finished goods and merchandises.

Implementing the company's money management based on the arising documents related to cash accounting and the company's cash receipt and expenditure documents.

At Hoang Phat, all staff in the accounting department are in charge of tasks related to financial accounting, there is no accountant in charge of management accounting

2.1.4.2 Accounting policies and regimes applied at the company:

The Company strictly complies with the Accounting Law andVietnamese Accounting Standards, the accounting regime is applied according to Circular 133/2016 TT-BTC dated August 26, 2016 of theMinistry of Finance.

(1) Overview of accounting policies and regimes applied at the company:

- Accounting period: from January 1 to December 31 of the calendar year

- Currency used: Vietnam Dong (VND)

- Principles of inventory accounting: Perpetual inventory method

- Principle of recognition of inventories: Recorded at cost

- Principle of calculating the value of ending inventory : Specific identification, FIFO (first-in, first-out) method

- Principle of recognition of fixed assets: Fixed assets are stated at cost, accumulated depreciation and residual value.

- Depreciation method of fixed assets: Fixed assets are depreciated using the straight-line method

- Principle of recognition of revenue : According to accounting standard

- Tax policy, payable to the State:

 Value-added taxes are paid by deduction method and calculated by deductible method

 Personal Income Tax : Personal income tax is implemented in accordance with the current regulations of the State The personal income tax amount to be officially paid in the period will be settled with the local tax authority.

 Corporate Income Tax : The company must pay CIT at the rate of

(2) Overview of the accounting system:

- Accounting form: Journal-Ledger in the condition of using accounting software

The system of accounting vouchers applied by the company complies with the form set by the Ministry of Finance All transactions are made and reflected in accordance with the form and method in Circular No. 133/2016/TT-BTC dated 26 August 2016 of the Ministry of Finance.

Currently, the company uses the accounting account system which is applied uniformly to enterprises in the economy according to Circular No. 133/2016/TT-BTC dated 26 August 2016 of the Ministry of Finance In order to facilitate the accounting work, the Company also opened level 2 and level

3 accounts to suit the business activities of the Company.

Quarterly, the accountant in charge of general accounting section of Hoang Phat must prepare financial statements according to the latest regulations of the Ministry of Finance about the preparation and presentation of Financial Statements including Circular No 133/2016/TT-BTC dated 26 August 2016 and Standard No 21: Presenting financial statements to be submitted to State agencies.

Some comments on accounting for sales and business result determination at

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 accounting work for sales and business results determination at Hoang Phat Production Trading and ServicesCo., Ltd.

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.

3.1.4.4 Accounting policies, accounting regimes and accounting system

The company strictly complies with the Accounting Law and Vietnamese Accounting Standards, and the accounting regime according to Circular 133/2016 TT-BTC dated August 26, 2016, of the Ministry of Finance.

(1) Accounting period: The company's accounting period starts from 01 January to 31 December annually, is consistent from year to year which is in accordance with current accounting circulars and regulations

(2) Accounting form: The company uses Journal - Ledger accounting form - This is a simple, easy-to-do, easy-to-check and compare form, suitable for small-sized enterprises with few business operations, the content of economic activities is simple and completely suitable to size and current conditions of the company

(3) Accounting voucher system: The company always well implements regulations on invoices and vouchers according to regulations on the form and content of relevant authorities and sectors.

Based on the current accounting system and Circular 133/2016 TT-BTC dated August 26, 2016, of the Ministry of Finance, the company has built its own system of appropriate vouchers and invoices.

Accounting books are printed by the company to store in a complete, clear, reasonable, and scientific manner, partly contributing to the overall success of the business development in the whole company.

The company's accounting reporting system is prepared according to the regulations regarding the preparation and presentation of Financial Statement in Circular 133/2016/TT-BTC of the Ministry of Finance, thereby helping the company's reporting system consistency between financial years

The company has been applying Fast Accounting software to support accounting work at the company The software has been improved and established based on the size, characteristics and business situation of the company.

In general, the accounting work at the company is done completely in terms of both form and content.

3.1.4.5 About the company's tax payment obligations to the State:

The accounting and declaration of taxes are done quite closely, the company always performs the calculation correctly and sufficiently the amount of tax payable into the state budget.

Besides the mentioned advantages, the accounting for sales and business result determination of the company also has the following limitations:

(1) The company's account system does not match Circular 133/2016 TT-BTC dated August 26, 2016, of the Ministry of Finance, specifically: for accounts used to reflect revenue deductions, instead of recording and tracking on the Debit side of account 511 - Revenues from sales and services provisions, the company is tracking on account 521 - an account that was removed in Circular 133.

(2) The recording and tracking of invoices and vouchers of the company is not scientific: Invoices and vouchers are not numbered in chronological order that transactions arising

(3) The company does not have many promotions or discounts for customers

(4) The accounting of salary expenses for employees of the sales and administration departments is not correct account All salaries of sales staff, as well as salaries of administration staff, are recorded into account 64211 - Selling expense: Employee expense

(5) The company does not focus on management accounting work There is no accountant in charge of management accounting, and management- related activities such as making estimates and budgets have not been paid attention.

(6) The reports, especially the financial statements, are only listed but cannot be analyzed The information in the financial statements is just raw data, not analyzed or evaluated compared to previous periods or compared to other companies in the market.

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.

However, thanks 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 To achieve the current results, accounting work, especially accounting for sales and business results determination at the company also contributes significantly.

SOME SUGGESTIONS ON ACCOUNTING FOR REVENUE AND

Requirements and principles to complete accounting for revenue and business

In the context of an increasingly competitive market economy, especially in the context of an increasingly difficult economy, companies in the market face many difficulties and challenges They must be responsible for their business activities, 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 for sales and business results determination is very important Accounting for sales and business results determination is the main part of the accounting work at a commercial company and it is considered a management tool to improve sales efficiency.

It can be seen that perfecting the organization of accounting for sales and business result determination is extremely necessary and must comply with the following requirements and principles:

The completion of accounting work for sales and determination of business results must be consistent with the size and characteristics of the company's business and meet the policies and general regulations set by theState for businesses in general, and small and medium enterprises in particular At the same time, the company needs to apply those policies to improve business efficiency and achieve the desired profit level as set out in the direction.

The application of these policies also needs to be consistent with and ensure the assessment method, the use of vouchers, accounting accounts as well as the system of accounting books and accounting reports, in compliance with Circular 113/TT-BTC.

The completion of accounting work for sales and determination of business results must be consistent and comply with Vietnamese Accounting Standards, accounting regime, and towards the application of International Accounting Standards.

(2) Accurate, complete, timely and transparent:

Accounting work for sales and determination of business results must ensure the accurate, complete, timely and transparent provision of information for intended users such as managers of the company, authorities such as tax authorities, banks, investors to evaluate business results of the company most accurately

Accounting work for sales and determination of business results provide an important source of information for business management, helping managers grasp information about the company's goods and business situation to make final decisions on business management issues This is an indispensable requirement in accounting work for sales and determination of business results, is the first step to establishing management accounting and helps the company have the most accurate direction in the business decisions of the next period

The improvement of accounting work for sales and determination of business results must ensure efficiency and be able to carry out.

Conditions, requirements and solutions to improve accounting work for sales and determination of business results must be feasible, not separate from reality, and must be closely related to the general operation, production and business situation of the company.

The ultimate purpose of the company's operations is to maximize profits and minimize expenses To achieve this goal, along with constantly increasing revenue, the managers of the company need to come up with solutions to reduce costs and use capital economically and effectively.

Ensure the implementation and application of new proposals in a consistent manner in terms of content and methods throughout the accounting department as well as throughout the company.

Some suggestions for improvement of accounting for sales and business results

Suggestion 1: Standardize the accounting accounts system according to regulations

According to Circular 133/TT-BTC dated 26 August 2016 of the Ministry of Finance, Account 521 - Revenue deductions has been removed, so when arising transactions related to revenue deductions such as trade discounts, sales returns, and sales allowances, enterprises will account to the Debit side of account 511 - Revenue from sales and services provisions, but not account 521 - Revenue deductions like Circular 200.

The removal of some accounts - including account 521, makes the accounting system as well as accounting work simpler, more compact and more suitable for the size and characteristics of small and medium businesses such as Hoang Phat Production Trading and Services Co., Ltd Therefore, the company should consider changing the accounting account and tracking revenue deductions from account 521 to direct tracking on account 511 in the next accounting periods.

Specifically, the company can set the accounting accounts system to record and track revenue and revenue deductions by using level 2 accounts, and level 3 accounts, for example:

Account 511 - Revenue from sales and services provisions

Account 5111 - Revenue from sales and services provisions

Account 51111 - Revenues from sales of merchandise

Suggestion 2: Design and track the system of invoices and vouchers in chronological order of arising

In fact, the numbering order of the company's invoices and vouchers is not scientific and reasonable For example, on December 6, 2021, the company incurred a sales transaction (Example 1) with the number of VAT invoices that the company issued coincided with the Goods dispatch note for that order is number 0000262 However, until December 20, 2021, another sales transaction occurred (Example 2) but the number of VAT invoices and the Goods dispatch note that the company is recording is 115.

It can be seen that the company's invoice and voucher numbers are not being tracked in order from smallest to largest and are not regulated by any standard.

Therefore, I suggest that the company should number the invoices and vouchers according to the chronological order in which the transaction arises so that it can be easier to track, check and store.

Invoices and vouchers can be coded as follows:

The company may stipulate that the invoice code consists of 7 numbers and is numbered in order from the 1st invoice to the nth invoice in the order of the date of the transaction.

For example: Assume that the sales invoice dated December 6, 2021

(Example 1) is the 1000th invoice, voucher of the year, the corresponding invoice number is: 0001000

Similar to the sales invoice dated December 20, 2021 (Example 2), assuming this is the 1095th invoice, the code of invoice, voucher is: 0001095

By numbering such orders, it will make it more convenient for accountants to track, record and find invoices when needed.

Suggestion 3: Building the strategy to promote consumption of goods through trade discounts and sales allowances:

Providing customers with preferential policies through forms such as trade discounts, sales allowances are particularly effective commercial solutions in stimulating buyers' purchasing needs and freeing up inventory in stock This is also a good way to maintain a long-standing customer base and advertise the company's brand to new customers.

Through an interview with the Chief Accountant of the company, I learned that the company recently did not have any preferential and discount programs for customers, so I suggest that in the near future, the company should research and create appropriate incentive programs to stimulate the growth of sales and profits One of the forms the company can apply is trade discount:

To encourage customers to buy more goods, company will offer discounts to customers who buy in bulk or customers who buy often. Although trade discount reduces the company's revenue, it has a good effect to promote the consumption of goods.

When the company's regular customers buy until the time when the total purchase volume reaches the discounted volume, the company will give the customer a discount on the invoice of that last shipment The discount is deducted from the amount receivable from customers, or deducted from the next purchase, or can also be paid directly in cash.

The applicable company discount rate can be from 1% to 2%, or specify a specific discount amount depending on the value of the sales contracts signed.

When a trade discount is incurred, the company records it in the debit side of account 511, details for this trade discount

In case the discount is directly discounted, the accountant will write the VAT invoice to directly subtract it from the value of that invoice In case the discount is paid in cash, the treasurer will write a payment note with the content of a trade discount for the customer and the treasurer will release the fund to spend the amount the customer is entitled to the discount.

When arising transactions related to trade discounts, the accountants will record:

Cr Acc 111, 112, 131: Total deduction amount

Suggestion 4: Separate salary expenses for employees of different departments into different detailed accounts

Specifically, the system of accounts used to record salary and welfare expenses for employees of the company includes:

Account 64211 - Selling expense: Employee expense

Account 64221 - Administration expense: Employee expense

Therefore, the company's accountant should only record in account

64211 - Selling expense: Employee expense salaries, bonuses and allowances for sales department employees, and salary expenses for employees in Administration department such as: Accountant, The Director, Deputy Director should be accounted into account 64221 - Administration expense: Employee expense to be able to manage the expenses of each department more easily and accurately.

Suggestion 5: Company should develop management accounting

In an increasingly competitive market economy, one of the important factors leading to the success or failure of managers is whether or not they have appropriate management accounting information.

Management accounting is an effective tool for managers to make decisions to run the company's business activities toward profit maximization goals.

Management accounting has the task of monitoring the fluctuations of assets, capital, revenues, costs, and results of the enterprise by different measures, associated with financial relationships to provide management levels according to specific requirements.

It can be seen that using management accounting will help businesses have a better overview of revenue, costs and profits.

However, in the past time, Hoang Phat Production Trading and Services has not performed management accounting Therefore, I suggest that in the coming time, the company can consider paying more attention to management accounting The company can start by using the C-V-P (Cost-Volume-Profit) model and analyze the break-even point to determine the appropriate selling price to satisfy the needs of the market and determine how much to sell to achieve profit maximization.

Cost-Volume-Profit analysis (C-V-P analysis) is considered one of the effective tools to help managers understand the relationship between cost, volume, and profit, thereby making optimal decisions for the business These decisions may include: What products and services to sell, at what price to sell, what marketing strategies to use, and what cost structures to apply.

C-V-P analysis technique can be shown on a break-even graph so it is easy to understand for managers who do not have a deep knowledge of finance.

C-V-P analysis is based on the analysis of the variation of business expenses with respect to the changes in the volume of operations (production and sales).

In there, some cost items such as direct materials and direct labor change as the volume of products produced or sold changes (called variable costs) and some cost items do not change when the volume of products produced or sold changes, such as depreciation of machinery and equipment, factory; salary of management labor (called fixed costs)

Some related formulas when using CVP model and break-even analysis as below:

Contribution per unit = Unit selling price – Unit variable costs (3.1)

Profit = (Sales volume x Contribution per unit) – Fixed costs (3.3)

Sales revenue at breakeven point = (3.5)

Volume/Output to achieve target profit = (3.6)

Accounting diagram for revenue recognition in case of credit sale with

OF CREDIT SALE WITH INTEREST PAYMENT, INSTALLMENT SALE

Accounting diagram for revenue recognition in case of dissimilar

Accounting diagram for revenue recognition in case of goods sent on consignment

OF GOODS SENT ON CONSIGNMENT

Cash sale with cash discount

Accounting diagram for revenue recognition in case of cash sale with

OF CASH SALE WITH CASH DISCOUNT

Credit sale with cash discount:

Accounting diagram for revenue recognition in case of credit sale with

OF CREDIT SALE WITH CASH DISCOUNT

(1.6) For goods processing activities at the processing enterprises:

When determining the revenue from the actually entitled processing amount, accountants shall be recorded:

Accounting diagram for revenue recognition for goods processing

*In case of the enterprise calculates VAT by the direct method:

• When selling products, goods and services, revenue is recognized as below:

Accounting diagram for revenue recognition in case of the enterprise

OF THE ENTERPRISE CALCULATES VAT BY THE DIRECT METHOD

Circular 133/2016/TT-BTC removed all accounts to track sales deductions such as sales returns, sales allowances and trade discounts

When there are deductions for revenue arising in the period, the accounting records are as follows:

Accounting diagram for revenue deductions recognition

(3) At the end of the accounting period:

When net revenue is transferred to Account 911 “Business results determination”, the following accounts shall be recorded:

Accounting diagram for transferring net revenue at the end of the period

AT THE END OF THE PERIOD

1.3.2 Accounting for cost of goods sold:

1.3.2.1 Overview of cost of goods sold:

The cost of goods sold is the cost of the merchandise that a retailer,distributor or manufacturer has sold The cost of goods sold is reported on the income statement and can be considered as an expense of the accounting period.

1.3.2.2 Methods of stock evaluating in a commercial company

- In case the goods are bought and sold immediately, without going through the warehouse:

Cost of goods sold = Actual purchase price of goods sold + Actual costs related to the purchase process

+ Actual purchase price of goods sold shall be calculated according to one of the following three methods of inventory evaluating:

(1) Specific identification method: is a method of managing goods in batches, this method is applicable to businesses with few identifiable and stable goods or items According to this method, goods imported in batches at any price will be exported at that price regardless of the time of import and export.

(2) Weighted average method (AVCO): is a method that uses a weighted average to calculate the cost of the units Under this method, the value of each item is calculated according to the average value of the goods that existed at the beginning of the period and were stocked during the period The average value can be calculated by period (weighted average at the end of the period) or each time a batch of finished products is imported (weighted average after each import), depending on the actual situation of the business.

(3) First in-first out method (FIFO): According to this method, they assume that the actual cost of finished goods imported first will be used to calculate the actual cost of finished goods sold first.

The application of which method to calculate the cost of issued goods is decided by the enterprises themselves However, it is necessary to ensure consistency and disclosure in the financial statements.

+ Costs related to the purchase process such as cargo insurance, warehouse rent, wharf rent, transportation costs, handling cost, preservation of goods cost,

-In case the finished products are sold through the warehouse:

The cost of finished products sold include actual purchase price of goods sold and costs related to the purchase process that are allocated to goods sold.

+ The actual purchase price of goods sold is determined according to one of the three evaluating methods mentioned above.

+ Purchase costs that are allocated for goods sold are calculated according to the following formula:

Provision for devaluation of inventories is charged to cost of goods sold on the basis of the volume of inventories and the difference between the net realizable value and the cost of inventories When determining the volume of inventory that is subject to a decrease in value for which a provision must be made, the accountant must exclude the volume of inventory that has been signed for sale contract (with a net realizable value not lower than the net book value) but has not yet been delivered to the customer if there is solid evidence that the customer will not abandon the performance of the contract and excludes inventories used for capital construction, the value of inventories used for producing a product that is made from these inventories at a selling price equal to or higher than the cost of production of products.

For the value of inventory lost, the accountant must immediately calculate it into the cost of goods sold (after deducting compensation, if any).

The import tax, special excise tax, environmental protection tax calculated to the value of goods purchased when delivering goods for sale but such taxes are refunded shall be recorded a decline of the cost of goods sold.

Expenses that are not considered deductible expenses according to the provisions of the CIT Law but have sufficient invoices and vouchers and have been properly accounted for according to the accounting regime shall not be recorded as a reduction in accounting expenses but only adjusted in CIT finalization to increase the payable CIT amount.

Good receipt notes, Good dispatches notes, The sales contracts, The purchase contracts, Sales invoices, VAT invoices,…

Account 632 – Cost of goods sold

1.3.2.6 Contents and structure of account 632 - Cost of goods sold

This account is used to record the cost of products, goods, services,investment properties; production cost of construction and installation products (for construction and installation enterprises) sold in the period In addition, this account is also used to record expenses related to investment properties business activities such as depreciation expenses; repair costs; the cost of leasing investment property under the operating lease method; cost of selling and liquidating investment property

 In case of business applies perpetual inventory method

TABLE 1.2 STRUCTURE OF ACCOUNT 632 – COST OF GOODS SOLD IN CASE OF

BUSINESS APPLIES PERPETUAL INVENTORY METHOD

ACCOUNT 632 – COST OF GOOD SOLD

- For activities of production and business activities, this account reflects:

+Costs of products, goods, services sold during period.

+Costs of raw materials, materials, labor costs in excess of normal level, and unallocated fixed production overhead cost are included in costs of goods sold during the period.

+Waste, loss of inventory after deducting compensation caused by personal liability.

+ Amount of provision for devaluation of inventories (the difference between the amount of provision for devaluation of inventories that must be made this year is larger than the amount of provision made in the previous year that has not yet been used up).

- For investment properties business activities, this account records:

+Depreciation of investment property used for operating lease in the period;

- Transferring cost of products, goods, services sold during period to account 911 ― “Business result determination”

- Transferring total costs of investment property business expenses incurred in period to determine business results.

- Reversal of provision for devaluation of inventories at the end of the fiscal year (the difference between the amount of provision to be made this year is smaller than the amount made in the previous year);

- Value of returned goods sold;

- Remission of accrued expense for real estate goods that are determined to be sold (the difference between the remaining prepaid expenses is higher than actual costs incurred).

- Trade discounts, sales allowances received after purchased goods have been sold.

- Adjustment to increase the historical cost of investment property held for price increase when there is solid evidence that the improving investment property which is not eligible to be charged to historical cost of investment property.

+Expenses arising from the leasing of investment property lease activities during the period;

+ Residual value of investment property sold or liquidated during the period;

+ Expenses for selling, liquidating of investment property, incurred in the period.

+ Amount of loss due to decrease in value of investment property held waiting for price increase;

+ Accrued expenses for real estate goods that are determined to be sold. investment property shows signs of increasing price again;

- Import tax, special excise tax, environmental protection tax calculated to the value of goods purchased when delivering goods for sale but such taxes are refunded.

 In case of business applies periodic inventory method

TABLE 1.3 STRUCTURE OF ACCOUNT 632 – COST OF GOODS SOLD IN CASE OF

BUSINESS APPLIES PERIODIC INVENTORY METHOD

ACCOUNT 632 – COST OF GOOD SOLD For commercial businesses:

- Cost of goods sold in period

- Amount of provision for devaluation of inventories (the difference between the provision to be made this year is larger than the amount made in the previous year that has not been used up).

- Transferring costs of goods consigned for sales but not yet sold definitely.

- Reversal of provision for devaluation of inventories at the end of the fiscal year (the difference between the amount of provision to be made this year is smaller than the amount made in the previous year);

- The cost of goods sold is transferred to the debit side of account 911 “Business results determination”.

For production and service businesses:

- Costs of beginning inventory of finished goods and services

- Amount of provision for devaluation of inventories (the difference between the amount of provision to be made this year is larger than the amount of provision made in the previous year that has not been used up);

- Costs of finished goods have been stored and services have been implemented.

For production and service businesses:

- Transferring costs of ending inventory of finished goods and services to debit side of Account 155

―Finished goods and Account 154 – Work in progress

Accounting diagram for cost of goods sold for business applying

BUSINESS APPLYING PERPETUAL INVENTORY METHOD

(1) Cost of goods sold incurred during the period

(2) Other costs recorded to account cost of goods sold (to be charged to profit/loss account)

(4) Cost of goods sold transferred to Account 911 at the end of the period (to determine business’s result)

 For business applying periodical inventory method:

Accounting diagram for cost of goods sold for business applying

BUSINESS APPLYING PERIODICAL INVENTORY METHOD

(1) At the beginning period, transferring the opening balance of finished goods in stock and finished goods sent on consignment to account 632

(2) At the end of the period recording cost of finished goods during the period for production and service businesses

(3) At the end of the period recording cost of merchandise sold for commercial enterprises

(4) At the end of period, transfer the ending balance of finished goods in stock and finished goods sent on consignment to the debit side of account

(5) At the end of the period, transfer cost of finished/ merchandise goods sold to account 911 to determine business’s result.

1.3.3 Accounting for business administration expenses

1.3.3.1 Overview of business administration expenses

Business administration expenses include selling expenses and administrative expenses

Selling expenses include the actual expenses incurred in the process of selling products, goods, and providing services, including the costs of offering, introducing products, advertising products, and sales commissions, costs of warranty for product and goods (except for construction and installation activities), costs of preservation, packaging, transportation, salaries of the sales staff (salaries, wages, allowances, .); social insurance, health insurance, trade union funds, unemployment insurance, labor accident insurance of sales staff; costs of materials, labor supplies and tools, depreciation of fixed assets used for the sales department; outsourced services (electricity, water, telephone, fax, ); other monetary expenses.

Administration expenses include general administrative expenses of the enterprise, including expenses for salaries of management department staff (salaries, wages, allowances, ); social insurance, health insurance, trade union funding, unemployment insurance of enterprise management staff; cost of office materials, labor tools, depreciation of fixed assets used for management; land rent, license tax; provision for bad debts; outsourced services (electricity, water, telephone, fax, property insurance, fire and explosion ); other monetary expenses (reception, customer conference ).

(1) Selling and administrative expenses, which are not considered deductible expenses according to the provisions of the CIT Law, but have sufficient invoices and vouchers and have been properly accounted for according to the accounting regime, are not recorded reduce accounting costs but only adjust in the CIT finalization to increase the payable CIT amount.

(2) Account 642 - Business administration expense account is opened in detail according to each expense content according to regulations Depending on the management requirements of each industry and each business, account

642 can be opened in detail according to each type of expense such as selling expenses, administrative expenses In each type of expense, details are tracked according to each cost content such as: a) For selling expenses:

- Employee expense: Reflecting payables to sales staff, packing, transportation and preserving products and goods staff, etc., including wages, mid-shift meals, wages and social insurance, health insurance, trade union, and unemployment insurance,

- Materials and packaging expense: Reflecting costs of materials and packaging used for the preservation and consumption of products, goods and services, such as costs of packaging materials for products, goods, and services, costs of materials and fuel used for storage, handling and transportation of products and goods in the process of consumption, materials used for repair and preservation of fixed assets, etc for the sales department.

- Tools and supplies expense: Reflects the cost of tools and supplies that are served for the consumption of products and goods such as measuring instruments, calculation means, working means, etc.

- Depreciation expense of fixed assets: Reflecting the depreciation expense of fixed assets in the storage and sales department, such as warehouses, shops, yards, loading vehicles; transportation, calculating, measuring, checking, quality testing facilities,

- Warranty expense: Reflecting the cost of product and goods warranty. Particularly, expenses for repair and maintenance of construction works are recorded in Account 154 "Work in progress" but not in this account.

- Expenses for services purchased from outside: Reflecting costs of services purchased from outside for sales such as costs of outsourcing repair of fixed assets directly serving the sale stage, warehouse rent, yard rent, porting fee, transportation of products and goods for sale, commissions for sales agents, for export entrustment units,

- Other cash expenses: Reflecting other cash expenses incurred in the sales stage in addition to the above-mentioned expenses such as costs of reception in the sales department, costs of introducing, promotions and advertising products, goods, customer conference costs. b) For enterprise administration expenses:

- Administrative staff expense: Reflecting payables to management staff, such as salaries, allowances, social insurance, health insurance, trade union, unemployment insurance of the Board of Directors, management staff in departments and divisions of the enterprise.

- Management materials expense: Reflecting the cost of issued materials used for business management such as stationery , materials used for repairing fixed assets, tools, supplies, ( prices with or without VAT).

- Office furniture expense: Reflecting the cost of office tools and supplies used for management (prices with or without VAT).

- Depreciation expense of fixed assets: Reflecting the depreciation expense of fixed assets common used to the enterprise such as: offices, warehouses, architectural objects, means of transport, and management machinery and equipment used in office

- Taxes, fees and charges: Reflecting taxes, fees and charges expenses such as license tax, land rent, and other fees and charges.

- Provision expenses: Reflecting provisions for doubtful receivables and payables which are included in the production and business expenses of the enterprise.

- Expenses for services purchased from outside: Reflecting costs of services purchased from outside for business management; expenses for purchase and use of technical documents, patents, etc (not meeting the criteria for recognition of fixed assets) are calculated by the method of amortization into administrative expenses; fixed asset rent, expenses paid to subcontractors.

- Other monetary expenses: Reflecting other expenses under the general management of the enterprise, in addition to the above-mentioned expenses, such as: Conference expenses, receptions, business trips, transportation, femal labor expenses,

(3) For products and goods used for promotion and advertising:

Accounting diagram for business administration expense

(1) Salary, wages and related social insurance, health insurance, trade union fees

(2) Costs and allocation cost of supplies and tools

(3) Deprecation of fixed assets used for general business administration purposes

(4) Business tax, land rentals and other fees

(5) Provisions for doubtful debts and other provision payables for business restructuring, loss from risky contracts,…

(6) Services rendered and other expenses in cash

(7) Reducing selling and administration expenses (Reverse provision,…)

(8) Business administration expenses allocated and transferred to determine business result

1.3.4 Accounting for financial income and financial expenses

1.3.4.1 Overview of financial income and financial expenses

Definition: Revenue from financial activities is the total value of economic benefits obtained by the enterprise from financial activities or capital business during the accounting period Financial income arising from interests, royalties, dividends and profits distributed of an enterprise is recognized only when both of the following conditions are satisfied simultaneously:

(i) It is probable that gain benefits from the transaction

(ii) Revenue can be measured reliably

Interests: interests on loans, interests on cash in banks, on credit sales, installment sales,

Gains from selling and transferring financial instruments, investing in joint ventures in jointly controlled businesses, investing in associates, investing in subsidiaries

Gains from difference due to foreign currency trading, gains from foreign exchange rate difference

Payment discounts are entitled due to purchase supplies, goods, services, and fixed assets

Other income related to financial activities

Definition: Financial expenses are expenses related to capital activities, financial investment activities and activities of a financial nature of enterprise.

Expenses related to financial instrument investment, joint venture investment, associate investment, investment in subsidiaries (costs of holding, liquidation, transfer of investments, losses in investment, )

Expenses related to lending activities

Expenses related to foreign currency trading

Non-capitalized business loan interest expense, payment discount when selling products, goods, or providing services

Loss difference when buying and selling foreign currency, loss on foreign exchange rate difference

Provision for devaluation of short-term and long-term financial investments

- Reflection on financial revenues are revenues that considered to be carried out during the period, irrespective of whether the payments are actually paid or not Collections on behalf of the third parties are not considered revenues of enterprise.

- Revenue from investment in financial instruments (securities) includes the difference between the selling price greater than the cost of securities and the profit attributable to holding securities.

- Interest revenue is recorded on basis of actual time and interest rates.Revenue from royalties is recognized on the accrual basis in accordance with the lease agreement Distributed dividends and profit are recognized when the enterprise has the right to receive dividends or profits from the investment.Investment gains received from accrued investment interests before the acquisition of such investment by an enterprise are not accounted as financial income but are recorded decrease in the cost of such investment.

- Revenue from financial activities may include VAT if the enterprise pays VAT directly or indirectly or without VAT if the enterprise pays tax by the deduction method.

In addition, financial income needs to respect a number of specific principles as follows: a) For trading securities, revenue is recognized as the difference between the selling price greater than the cost price of securities.

In which, cost of securities is the book value determined by the weighted average method or FIFO method; the selling price is calculated at the fair value of the amount received. b) For the revenue from buying and selling foreign currencies, the recorded revenue is the gain from difference between the selling price and the buying price of foreign currency. c) For deposit interest: Revenue does not include deposit interest arising from the temporary investment of loans used for construction of unfinished assets. d) For interest receivable from loans, deferred payment and installment sales: Revenue is recognized only when it is certain to be collected and the loan principal and receivable principal are not classified as overdue that are need to make provision. e) For investment profit received from the investment in stocks and bonds, only the profit of the periods after the enterprise purchases this investment can be recognized as revenue arising in the period, and investment profit received from accumulated profits before the enterprise purchases such investment shall be recorded as a decrease the original price of such bond or stock investment. g) When an investor receives a stock dividend, the investor only tracks the increased number of shares in the Notes to the financial statements, does not record the value of received shares, does not record financial income, does not record an increase in the value of the investment.

Financial expenses account is used to record expenses for financial activities, including:

- Interest expense on loans, interest on deferred purchases, and interest on leasing financial leased assets;

- Losses due to liquidation or sale of investments; transaction costs of trading securities

- Loss from difference of exchange rate incurred during the period; exchange rate loss due to the period-end revaluation of monetary items denominated in foreign currencies; Loss from sales foreign currency;

- Amount of provision for devaluation of trading securities, provision for loss of investment in other entities;

- Expenses of other financial investment activities;

In addition, account financial expense must be recorded in detail for each expense item The following expenses shall not be recorded into this account:

Expenses for the production of products and provision of services;

Expenses to be covered by other funding sources;

Deposit interest calculation notes, Loan interest calculation notes, Receipt, payment notes, Credit notes, Debit notes…

1.3.4.5 Contents and structure of account 515 – Financial income and account 635 – Financial expense

TABLE 1.5 STRUCTURE OF ACCOUNT 515 – FINANCIAL INCOME

- VAT payable under direct method

- Transferring net revenues from financial activities into account 911

Revenues from financial activities incurred in the period.

TABLE 1.6 STRUCTURE OF ACCOUNT 635 – FINANCIAL EXPENSE

- Financial expenses incurred during the period;

- Making additional provisions for devaluation of trading securities, provisions for loss of investments in other entities (the difference between the provision to be made in this period is larger than the provision made in the previous period).

- Reversal of provision for devaluation of trading securities, provision for loss of investments in other entities (the difference between the provision to be made in this period is smaller than the provision made in the previous period that has not yet been used up);

- Amounts recorded as a reduction in financial expenses;

- At the end of the accounting period, all financial expenses incurred in the period shall be transferred to account 911 in order to determine business results.

1.3.4.6 Method of accounting for several major transactions

Accounting diagram for financial income and financial expense

(2a) Gains from selling and disposing financial investments.

(4a) Gains from foreign exchange difference incurred from retranslating monetary items based on foreign currencies at the end of the fiscal year.

(5a) Allocating and recognizing pre – received financial income.

(6a) Transferring financial income to determine business result.

(1b) Expenses related to financial activities

(2b) Make provision for foreign exchange rate difference

(3b) Reversing provisions for foreign exchange rate differences

(5b) Expenses related to foreign exchange incurred

(6b) Recording losses due to selling and disposing financial investments (7b) Financial expenses allocated and transferred to determine business results.

1.3.5 Accounting for other income and other expenses

1.3.5.1 Overview of other income and other expenses

Other income is the income that is not the revenue of the business These are income generated from activities other than the normal production, business activities of the business, including:

Income from transferring, liquidating fixed assets

Difference between the fair value of assets divided from Business cooperation contract is higher than the cost of capital investment in assets under joint control

Gains from revaluation of materials, goods, fixed assets used to contribute capital to joint ventures, investments in associates, and other long- term investments.

Income from sale and leaseback assets

Fines collected due to customers, other entities violating economic contracts

Collection of bad debts that have been written off before

Taxes payable when selling goods or providing services but then being reduced or refunded (refundable export tax, VAT, special excise tax,environmental protection tax payable but then reduced)

Collecting third-party compensation to compensate for lost assets (for example, collecting indemnified insurance premiums, business relocation compensation and the like);

Collecting taxes exempted from corporate income tax by the state

Collection of payable debts whose creditors cannot be identified;

Bonuses of customers related to the consumption of goods, products and services are not included in the revenue (if any);

Income from gifts and gifts in-cash and in-kind from organizations and individuals donated to enterprises;

The value of promotional goods is not returned to the manufacturer;

The previous year's business income that was omitted or forgotten to be recorded in the accounting books is discovered in this year

Other incomes other than those mentioned above.

Other expenses are expenses incurred as a result of events or transactions that are separate from the normal operations of the business Other costs of the business may include:

Expenses for liquidation and sale of fixed assets (including expenses for bidding for liquidation) The proceeds from the sale of bidding documents for the liquidation and sale of fixed assets shall be recorded as a reduction in expenses for the liquidation and sale of fixed assets;

The difference between the fair value of assets divided from the Business cooperation contract is smaller than the cost of capital investment in assets under joint control

The residual value of the demolished fixed asset;

The residual value of fixed assets liquidated or sold (if any);

Difference in losses due to revaluation of supplies, goods and fixed assets used for capital contribution to joint ventures, associates and other investments;

Fines payable for breach of economic contracts, fines for administrative violations;

Other incomes and expenses also need to follow some specific principles as follows:

When it is probable that the fines for breach of contract will be collected, the accountant must consider the nature of the fines so that the accounting can be suitable for each specific case according to the following principles:

- For the seller: All fines for breach of contract obtained from the buyer that is outside the contract value are recognized as other income.

+ Fines are essentially a reduction in the purchase price, leading to reduce the payment to the seller which is accounted for as a decrease in the value of the assets or the payments (not recognized in other income) unless the related asset has been liquidated and sold.

+ Other fines are recognized as other income in the arising period, for example:

The buyer is entitled to refuse to receive the goods and fines the seller if the goods are not delivered on time specified in the contract, the fines receivable is recognized as other income when it is probable that it will be collected In case the buyer still receives the goods and the fine is deducted from the payable amount, the purchase value is recorded according to the actual payable amount, the fines shall not be recorded in other income.

Expenses that are not considered deductible expenses according to the provisions of the CIT Law but have sufficient invoices and vouchers and have been properly accounted for according to the accounting regime shall not be recorded as a reduction in accounting expenses but only adjusted in CIT finalization to increase the payable CIT amount.

VAT invoices, Receipt notes, Payment notes, Minutes of contract violation, Taxes receipt, Other documents,….

1.3.5.5 Contents and structure of account 711 – Other income and account 811- Other expense

TABLE 1.7 STRUCTURE OF ACCOUNT 711 – OTHER INCOME

- Amount of VAT payable (if any) for other incomes at enterprises paying

VAT by the direct method.

- At the end of the accounting period, transfer other incomes arising in the period to account 911 “Business results determination”.

Other income incurred during period.

TABLE 1.8 STRUCTURE OF ACCOUNT 811 – OTHER EXPENSE

At end of accounting period, transfer total other expenses incurred during period to account 911 - Business results determination

1.3.5.6 Method of accounting for several major transactions

Accounting diagram for other income

(1) Proceeds from disposal or sale of fixed assets.

(2) Fines collected from other entities for breach of economic contract

(3) Collection of bad debts that have been written off before

(4) Collection of payable debts whose creditors cannot be identified;

(5) Allocation of pre - received income

(6) Reversing provision of construction warranty provision

(7) Transferring other income to determine business result

Accounting diagram for other expense

(1) Other expenses in cash arising.

(2) Residual value of disposed fixed assets

(3) Other expenses due to disposing and selling fixed assets

(4) Penalty due to breaking business contracts or tax penalty

(5) Loss from revaluation of fixed assets used to contribute capital to joint ventures, investments in associates.

(7) Transferring other expenses to determine business result.

1.3.6 Accounting for corporate income tax

1.3.6.1 Overview of corporate income tax

Corporate income tax expense is the payable corporate income tax amount calculated on the taxable income for the year and the current corporate income tax rate.

This account is used to record corporate income tax expenses incurred in the year as the basis for determining the enterprise's after-tax business results in the current fiscal year.

Quarterly, the accountant shall base on the corporate income tax payment voucher to record the temporarily payable corporate income tax amount into the corporate income tax expense At the end of the fiscal year, based on the tax finalization declaration, if the temporarily payable corporate income tax amount in the year is smaller than the payable amount for that year, the accountant shall record the additional payable corporate income tax amount to the corporate income tax expense In case the temporarily payable corporate income tax amount in a year is larger than the payable amount of that year, the accountant must record a reduction in corporate income tax expense as the difference between the temporarily payable corporate income tax amount in the year is greater than the payable amount.

In case of detecting immaterial errors related to the payable corporate income tax of the previous years, the enterprise may record an increase (or decrease) in the payable corporate income tax amount of the previous years to the corporate income tax expenses of the year the error is discovered.

For material misstatements, adjustments are made retrospectively.

When preparing the financial statements, the accountant must transfer the incurred corporate income tax expense to account 911 - "Business results determination" to determine the profit after tax in the accounting period.

Tax declaration, Payment notes, Other documents,…

1.3.6.5 Contents and structure of account 821- Corporate income tax

The corporate income tax expense recorded to this account is the payable corporate income tax amount calculated on the taxable income in the year and the current corporate income tax rate.

TABLE 1.9 STRUCTURE OF ACCOUNT 821 – CORPORATE INCOME TAX

- Corporate income tax expenses incurred during the year;

- The corporate income tax of previous years which must be additionally paid due to the detection of immaterial errors of the previous years is recorded as an increase in the current year's corporate income tax expense.

- The actual payable corporate income tax amount in the year is smaller than the temporarily payable corporate income tax amount which is deducted from the recognized corporate income tax expense in the year;

- The amount of corporate income tax payable is recorded as a decrease due to the detection of immaterial errors of previous years, which is recorded as a decrease in corporate income tax expense in the current year;

- The difference between corporate income tax expenses incurred in the year is greater than the amount recorded as a reduction in corporate income tax expenses in the year to account 911 - “Business results determination”.

1.3.6.6 Method of accounting for several major transactions

Accounting diagram for corporate income tax

(2a) Overpaid CIT (final tax declaration)

(2b) Remaining CIT payable (final tax declaration)

(4) At the end of the period, transferring corporate income tax to account

911 – Business result determination a) If total debit side of account 821 > total credit side of account 821 b) If total debit side of account 821 < total credit side of account 821

1.3.7 Accounting for business result determination

1.3.7.1 Overview of business result determination

Business results are the final results of production and business activities and other activities of an enterprise in a certain period, expressed in profit or loss.

The results of operations of an enterprise include ordinary results of operations and other results of operations

The results of operations are normally the result of a business' revenue- generating activities, which are sales, service provision and financing activities

(1) Business result from normal business activities

Gross profit from sales and services provision

(1) Gross profit from selling goods and providing services

Total net revenue from selling goods and providing services

(2) Net revenue from sales and services provisions Total revenue from selling goods and providing services

(other profit) = Other income – Other expenses

(4) Business results (total accounting profit before tax)

(5) Profit after CIT = Profit before CIT – CIT expenses

1.3.7.2 Accounting principles a) This account is used to identify and reflect the results of business and other activities of the enterprise in an accounting period The results of business activities of an enterprise include: results from production and business activities, results from financial activities and other operating results.

Production and business results are the difference between net revenue and cost of goods sold (including products, goods, investment properties and services, and production costs of construction, installation products), expenses related to investment properties business activities, such as depreciation costs, repair and upgrade costs, operating lease costs, liquidation costs, transfer of investment properties), selling and administrative expenses.

Financial activities result is the difference between financial income and financial expenses.

Other operating results are the difference between other incomes and other expenses and corporate income tax expenses. b) This account must fully and accurately reflect the business results of the accounting period The results of business activities must be accounted for in detail by each type of activity (production, processing, trading, service, financial activities ) In each type of business activity, it may be necessary to make detailed accounting for each type of product, each line of business, and each type of service. c) Revenues and incomes transferred to this account are net sales and net income.

1.3.7.4 Contents and structure of account 911 – Business result determination

TABLE 1.10 STRUCTURE OF ACCOUNT 911 – BUSINESS RESULTS

- Costs of products, goods, investment properties sold and services rendered.

- Costs of financial activities, corporate income tax expenses and other expenses;

- Selling expenses and general administration expenses;

- Net revenues from products, goods, investment properties and service sold in period;

- Revenues from financial activities, other oncome, and the transfer to reduce corporate income tax expenses;

1.3.7.5 Method of accounting for several major transactions

Accounting diagram for business results determination

1.4.Accounting books system and presentation on financial statements

1.4.1 Accounting books used in accounting for sales and business results determination

Enterprises must base themselves on the accounting book system selected by the Ministry of Finance and apply a system of accounting books according to the accounting form that the enterprise has chosen.Types of accounting books and accounting book configurations specified in Circular 133 include:

Types of the accounting books include: General accounting books and Detailed accounting books

- General accounting books includes: Journal, Ledger.

+ The journal is used to record economic and financial transactions arising in each accounting period and in an accounting year according to the chronological order and the reciprocal relationship between the accounts of such transactions The accounting data in the journal reflects the total arising on the Debit and Credit side of all accounting accounts used at the enterprise The log must fully reflect the following contents:

• Date, month of book-keeping;

• Numbers and dates of accounting vouchers used as the basis for book-entry;

• Summary of contents of arising economic and financial branches;

• The amount of money generated by the economic or financial sector.

+ The Ledger is used to record economic and financial transactions arising in each period and in an accounting year according to the accounting accounts specified in the accounting account regime applicable to enterprises The accounting data on the books reflect the total situation of assets, capital sources, situation and results of production and business activities of enterprises The Ledger must fully reflect the following contents:

• Numbers and dates of accounting vouchers used as the basis for book entry;

• Summary of contents of arising economic and financial branches;

• Amount of arising economic and financial transactions shall be recorded in the Debit or Credit side of each account.

- Detailed accounting books, including detailed accounting books and accounting cards:

+ Detailed accounting books and accounting cards are used to record arising economic and financial transactions related to necessary accounting objects that need to be monitored in detail according to management requirements.

+ Data on detailed accounting books and cards provide information for the management of each type of asset, capital, revenue, and expenses that have not been detailed in the Journal and Ledger Number, results of the window, detailed accounting card optional.

+ Enterprises shall base themselves on the guiding regulations in the Accounting Regime on detailed accounting books and cards and the enterprise's management requirements to open necessary and appropriate detailed accounting books and cards.

Accountants use the following main types of books:

+ General Journal: Reflecting all arising economic and financial transactions in the chronological order of their occurrence.

+ Sales diary, Cash collection diary, Bank deposit diary

+ Ledger: Account 511, Account 632, Account 642, Account 911, etc.

Accountants use the following main types of books:

+ Register of book-entry vouchers: Record in chronological order the arising economic and financial transactions that have been prepared with book-entry vouchers.

+ Ledger: Account 511, Account 632, Account 642, Account 911 + Detailed book: Account 511, Account 632, Account 6421, Account 6422

The accounting records the consumption of finished products and determines the sales results in the following books:

+ Listing 5: Collection of selling and administrative expenses

+ Listing 6: List of prepaid expenses and payable expenses

+ Vouchers Journal No 8, Vouchers Journal No 10

+ Relevant detailed books: Account 642, Account 511, Account 911 and related accounting books

1.4.2 Presenting information about sales accounting and determining business results on Financial Statements

The preparation and presentation of financial statements of the company comply with the requirements specified in:

The accounting standard No 21 "Presentation of financial statements"

The current accounting regime in accordance with Circular 133. 2016/TT – BTC dated August 26, 2016 of the Ministry of Finance,

Vietnamese accounting standards promulgated by the Ministry ofFinance and accompanying documents on amendments, supplements and implementation guidance

In financial statements, information about accounting for sales and business result determination are presented in the following items:

+ Taxes and other payables to State: The data is taken from the credit side balance of the ledger account 333

+ Undistributed post-tax profits: The data is taken from the credit side balance of the account ledger account 421

+ Revenue from sales and services provision (code 01): The data is taken from the accumulated credit side of the ledger account 511

+ Revenue deductions (code 02): The data is taken from the accumulated debit side of the ledger account.511

+ Costs of goods sold (code 11): The data is taken from the accumulated credit side of the ledger account 632 corresponding to the debit side of the ledger account 911

+ Financial income (code 21): The data is taken from the accumulated debit side of the ledger account 515 corresponding to the credit side of the ledger account 911

+ Financial expense (code 22): The data is taken from the accumulated credit side of the ledger account 635 corresponding to the debit side of the ledger account 911

+ Business administration expenses (code 24): The data is taken from the accumulated credit side of the ledger account 642 corresponding to the debit side of the ledger account 911

+ Other income (code 31): The data is taken from the accumulated debit side of the ledger account 711 corresponding to the credit side of the ledger account 911

+ Other expenses (code 32): The data is taken from the accumulated credit side of the ledger Acc.811 corresponding to the debit side of the ledger account 911

+ Corporate income tax expense (code 51): The data is taken from the accumulated credit side of the ledger account 821 corresponding to the debit side of the ledger account 911

+ Profits after corporate income tax (code 60):

1.5 Accounting for revenue and business result in application with accounting software

The development history of the establishment of information and inspection asset and asset mobilization systems, all legal economic relations, and the development of information technology have demonstrated that the application with accounting software to enterprises is necessary Current accounting software is generally high speed, diverse and accurate The application of software will create reliability and make difference in business advantages Nowadays most businesses use software for their accounting work.

For revenue and evaluating business result accountants, the use of software is extremely important Accounting software for this part has the following advantages:

- Help keep business account conveniently and quickly, information is handled promptly.

- Software can calculate the cost of goods sold furthermore solve a large amount of calculations.

- Cost of goods sold, revenue as well as information to determine sales results are stored fully and safely because users can set passwords for accounting information to use.

Step 1: Organize the coding of legal objects.

Step 2: Organize the accounting voucher system in accordance with the conditions for implementing accounting on accounting software.

Step 3: Organize the system of accounting accounts.

Step 4: Select and apply accounting forms.

Specifically with accounting revenue and evaluating business results, we have the process of processing information about accounting revenue and evaluating business results:

(1) Every day, accountants base on accounting vouchers or a consolidated table of inspected vouchers to be used as a basis for book recording, to determine debit accounts, and credit accounts, to enter data to the computer according to the tables designed on the accounting software. According to the accounting software process, the information is automatically updated in general accounting books, ledger books, diary books and related accounting books.

(2) At the end of the month (or any time needed), the accountant performs transfer entries to determine sales results as profit or loss in the accounting period and provides information for users of information The comparison between the general data and detailed data is done automatically and always ensures accuracy and honesty according to the information entered in the period Accountants may check and compare between accounting books and financial reports after printing them into paper, binding them and carrying out legal procedures as prescribed by manual accounting books.

Process of processing revenue accounting information and determining business result

Step 1: Business accounting (enter data entries into software)

Delivery finished goods, recording revenue

Accounting and collection of selling and administration expenses

Accounting of revenue, other income and other expenses

Step 2: Performing transfer professions and determining results

Transfer to determine net revenue

Transfer costs and revenue in the period to determine results.

Detailed and general accounting books

Revenue and expense accounting report books

1.5.1 Principles and requirements for accounting organization in terms of using accounting software

Firstly, the organization in terms of using accounting software must ensure scientific and rationality, on the basis of compliance with the Law on Accounting, in accordance with the requirements of macro management, with accounting standards and policies and regulations of State

Secondly, the organization of accounting work in the enterprise must ensure that it is suitable to the specific characteristics, conditions and circumstances of the enterprise.

Thirdly, this organization must ensure that the receipt, inspection,processing and provision of economic and financial information of the enterprise must meet the management requirements of the enterprise and the State.

Moreover, the organization in terms of using accounting software must be consistent with the payroll and qualifications of the existing contingent of accounting staff.

Finally, the organization in terms of using accounting software needs to thoroughly grasp the principles of thrift and efficiency.

1.5.2 Sales accounting tasks and determining business results in terms of using accounting software

First, declare the objects to be managed in the list of accounts, the list of customers, the list of finished products, goods and the list of documents.

Second, set default values, implicit tax entries, cost of goods sold in the system configuration.

Third, enter data of arising transactions about sales activities, financial activities and other activities into the machine.

Fourth, make year-end closing entries for expense, revenue and other income accounts to determine business results.

Fifth, enter complete and accurate data on the quantity of goods sold and consumed internally.

Sixth, identify and install formulas to calculate the cost of goods sold, develop standards for allocating selling expenses, and reasonable administrative expenses to properly determine sales results.

Seventh, operate according to the instructions of accounting software to provide accurate and truthful information.

Eight, based on the requirements of the business, the user declares the necessary requirements with the accounting software to print out reports for managers.

1.5.3 Characteristics of sales accounting and determination of business results in terms of using accounting software

After entering data of arising economic transactions into the machine, the accounting software will automatically process and update the data in the relevant accounting books.

For the part of accounting for sales and determining business results, there are also transactions on payable VAT and input VAT When entering the tax rate of each type of product, goods or service, the software will automatically calculate and enter the entry to reflect VAT Besides, the accounting software is also designed to be compatible with tax declaration support software.

The entries for the transfer of expenses, revenue and other income to determine business results can be done automatically on the software and are usually designed under the function of automatic closing entries.

Daily, accounting vouchers or summary of accounting vouchers on goods have been checked, used as a basis for book entry and identification of Debit and Credit accounts for data entry into the computer according to the tables and charts that are pre-designed on the software.

The information is automatically entered into the general accounting books and related detailed accounting books and cards.

At the end of the month, accountants perform book closing operations and prepare financial statements The comparison between aggregate data and detailed data is done automatically Accountants can check and compare data between accounting books and financial statements after they are printed on paper.

Perform operations to print financial statements as prescribed.

Organization chart of the management apparatus at Hoang Phat

The Board of Directors at Hoang Phat Production Trading and Service Co., Ltd includes:

 The director is the person who runs the company's day-to-day business operations, the responsibility of the director as follows:

 Deciding on issues related to the company's day-to-day business operations;

 Organizing the implementation of the company's business plan and investment;

 Issuing the company's internal management process,

 Appointment, dismissal and removal of managers in the company

 Evaluating, and rewarding employees, participating in interviews new employees

 Setting goals and policies for management departments.

 Deputy Director: Nguyen Thu Trang

Duties of the Deputy Director include:

 Helping the director manage and run the company's activities according to the director's assignment;

 Proactively deploying and performing assigned tasks,

 Taking responsibility before the Director for operational results.

 Setting goals and policies for the management of departments.

 Analyzing, arranging the personnel, urging and managing resources in accordance with the company's regulations;

 Training, evaluating, and rewarding employees, participating in interviews, and training new employees.

 Making sure that the staff meets their requirements, functions and tasks.

Sale department is responsible for:

 Implementing business development plans and directions.

 Synthesizing the input and output management tasks of the company, and advising the Board of Directors based on the achieved results.

 Maintaining and developing relationships with customers

 Simultaneously performing different tasks given by direct superiors.

 Organizing accounting system in accordance with the production requirements and the current financial and accounting regime.

 Advising the Board of Directors (BOD) on the accounting regime and updating the changes of the accounting regime in accordance with the law.

 Recording, reflecting fully, promptly, accurately and honestly the economic operations arising in the production and business process strictly according to the prescribed accounting regime.

 Provide timely and accurate financial data for the director to properly plan the business.

 Making financial and business plans by month, quarter and year.

The planning department has the function of advising the Board ofDirectors and other senior managers in the company on issues related to planning the fields of production and business, technical management, finance, and investment In addition, the planning department also regularly inspect, monitor, and manage business operations.

 Directly carrying out the production of the company

 Having responsible for designing goods and products.

 Controlling every aspect of production operations By controlling production, the production department can effectively use resources, machinery, and labor in a rational way, minimizing waste.

 Conducting research to improve the company's products by changing or innovating part or all of the products.

Undertaking all the work related to administrative processes and procedures; managing and supervising the work of employees in the company; and providing legal advice to the Board of Directors when necessary

 Managing all issues related to construction, management and development of quality and sustainable human resources to ensure business development.

 Recruiting, and training human resources of the company

 In charge of taking care of the lives of all employees in the company.

 Representing the company to handle disputes occurring at the office.

 Building and managing the welfare and remuneration regimes for the company's personnel

 Tracking the quality and quantity of the inventories

 Arranging goods in the warehouse

 Ensuring standard goods in stock

 Periodically, checking inventories with the warehouse accountant as assigned

 Planning, handling and solving problems related to the transportation of inventories and goods

 Carrying out transport of materials and goods to customers or from suppliers to the company's warehouse

2.1.4 Characteristics of accounting organization in Hoang Phat Production Trading and Services Company Limited

2.1.4.1 Characteristics of accounting department organization:

In order to meet the requirements in accordance with the size,characteristics of business organization, business management as well as the features of accounting work, Hoang Phat Production Trading and Service Co.,Ltd organizes accounting work according to the concentrated accounting model as follows:

Organization chart of accounting apparatus at Hoang Phat

 Leading and assigning work to the staffs in the Accounting department

 Managing accounting software as well as managing all invoices,vouchers, accounting books, and other accounting documents of the company.

 In charge of synthesizing accounting books and documents, making financial statements and taking main responsibility for the accounting work of the company.

 Responsible for tracking, processing and accounting for main accounting sections

Supporting the chief accountant in setting up sales invoices, value-added invoices and other documents related to the Sales accounting section; monitoring, processing and accounting for the Sales accounting section

Supporting the chief accountant in setting up warehouse receipt notes, warehouse delivery notes; managing in terms of value and quantity of inventories in and out of the company; in charge of tracking, processing and accounting of materials, finished goods and merchandises.

Implementing the company's money management based on the arising documents related to cash accounting and the company's cash receipt and expenditure documents.

At Hoang Phat, all staff in the accounting department are in charge of tasks related to financial accounting, there is no accountant in charge of management accounting

2.1.4.2 Accounting policies and regimes applied at the company:

The Company strictly complies with the Accounting Law andVietnamese Accounting Standards, the accounting regime is applied according to Circular 133/2016 TT-BTC dated August 26, 2016 of theMinistry of Finance.

(1) Overview of accounting policies and regimes applied at the company:

- Accounting period: from January 1 to December 31 of the calendar year

- Currency used: Vietnam Dong (VND)

- Principles of inventory accounting: Perpetual inventory method

- Principle of recognition of inventories: Recorded at cost

- Principle of calculating the value of ending inventory : Specific identification, FIFO (first-in, first-out) method

- Principle of recognition of fixed assets: Fixed assets are stated at cost, accumulated depreciation and residual value.

- Depreciation method of fixed assets: Fixed assets are depreciated using the straight-line method

- Principle of recognition of revenue : According to accounting standard

- Tax policy, payable to the State:

 Value-added taxes are paid by deduction method and calculated by deductible method

 Personal Income Tax : Personal income tax is implemented in accordance with the current regulations of the State The personal income tax amount to be officially paid in the period will be settled with the local tax authority.

 Corporate Income Tax : The company must pay CIT at the rate of

(2) Overview of the accounting system:

- Accounting form: Journal-Ledger in the condition of using accounting software

The system of accounting vouchers applied by the company complies with the form set by the Ministry of Finance All transactions are made and reflected in accordance with the form and method in Circular No. 133/2016/TT-BTC dated 26 August 2016 of the Ministry of Finance.

Currently, the company uses the accounting account system which is applied uniformly to enterprises in the economy according to Circular No. 133/2016/TT-BTC dated 26 August 2016 of the Ministry of Finance In order to facilitate the accounting work, the Company also opened level 2 and level

3 accounts to suit the business activities of the Company.

Quarterly, the accountant in charge of general accounting section of Hoang Phat must prepare financial statements according to the latest regulations of the Ministry of Finance about the preparation and presentation of Financial Statements including Circular No 133/2016/TT-BTC dated 26 August 2016 and Standard No 21: Presenting financial statements to be submitted to State agencies.

All the reports are prepared at the accounting department of the company At the end of the quarter and the year, the general accounting books and detailed accounting books are printed on paper, bound into volumes and carry out legal procedures in accordance with regulations on accounting books.

In order to increase accuracy and reduce the burden on accountants, the company decided to buy and put into use Fast Accounting accounting software to support the accounting of economic transactions arising in the accounting period

On the other hand, the information on the company's financial statements is not analyzed, compared with previous years and with other companies of the same size in the market and there is no management accounting report atHoang Phat.

The main screen interface of fast accounting software

2.1.4.3 Charts of accounts used at Hoang Phat Production, Trading and Service Co., Ltd:

Currently, Hoang Phat is using a system of accounting accounts that is uniformly applied to enterprises operating in the economy according toCircular 133/2016/TT-BTC applicable to small and medium enterprises In order to facilitate accounting, the company also opens additional accounts at level 2, level 3, level 4 to suit business activities of the company Mainly used accounts in the company as follows:

2.1.4.4 Process of transferring accounting vouchers, accounting documents:

(1) Making, receiving and processing accounting vouchers;

(2) Accountants and chief accountants check and sign accounting vouchers or submit them to directors for approval;

(3) Classifying and arranging vouchers, accounts and recording accounting books;

(4) Storing and preserving accounting documents, accounting books

2.1.5 Accounting in Hoang Phat Production Trading And Services Company Limited in application with accounting software

The company applies computerized accounting books in the form ofJournal - Ledger through Fast Accounting software The use of accounting software makes accounting work simpler with higher accuracy.

Fast Accounting is an accounting software for small and medium-sized businesses Fast Accounting has been developed and improved continuously since 1997 with more than 22.000 customers nationwide and honorably given awards such as Sao Khue award, BIT Cup, Widely Used Product, IT Cup… There are main features of Fast Accounting:

(1) Full business activities with reports and accounting books by accounting and tax regulation

Fast Accounting includes a system module and 13 business operation module meeting all accounting and tax requirements for small and medium- sized businesses Supports accounting for multiple level business organization, multiple departments and foreign currencies

Always updates up-to-date accounting and tax circulars issued by General Department of Taxation, makes financial reports and accounting books according to government regulations.

(2) Fast Accounting has 4 versions for different types of businesses: service, trade, construction and manufacturing Depending on demand, customers choose to buy the right version.

(3) Flexibility: Fast Accounting provides more than 100 parameters supporting users in setup, selecting suitable ones for business requirements. Users can setup items and calculation formulas for management reports.

(4) Fast Accounting helps the accounting work become simpler, more efficient and more accurate thanks to:

- Carrying out collection and expenditure, payment related to cash,deposit or loan in a strict and detailed way according to the right object,invoice, and contract

- Effective sales management, timely collection of money Integrate with Fast e-Invoice software and some other e-invoice software Assist in the preparation of reports and analysis on the status of sales and liabilities.

- Strict purchasing management, payment on time.

- Calculating inventory prices, make reports quickly with large amounts of data

- Many features to help manage fixed assets, tools and supplies easily and accurately

- Managing projects and works strictly and detailed

- Meeting the requirements of calculating product cost from simple to complex

(5) Fast Accounting is developed on advanced technology, high speed processing speed, smart functions

Fast Accounting is developed on technology of Microsoft with C#.NET and SQL Server supporting in running on individual computer, local network or working remote via the Internet.

Fast Accounting focuses on enhancing speed of transaction processing, end-of-period calculating and reporting, assisting users to work quickly Different smart utilities and functions support users in exploiting information effectively for management accounting jobs.

Fast Accounting provides functions of checking data of warehouse, tax reports well as searching errors of inaccurate reports.

2.1.5.2 The accounting process of the company in terms of using accounting software

The process of processing, systematizing and recording accounting books in terms of using software at the company are shown by the following diagrams:

The process of processing, systematizing, and recording accounting

The accounting process of the company in terms of using accounting software is shown in the following diagram:

The accounting process of the company in terms of using accounting software

The arising economic transactions are recorded according to accounting accounts through accounting software Daily, based on original documents such as cash receipt vouchers, payment vouchers, debit notes, credit notes, purchase invoices, sales invoices, the accountant will conduct inspection and classification Then, accountants use these documents, which are used as

File of original documents of the same type

General accounting book Details accounting book

Accounting software a basis for make accounting entry and identification of debit and credit accounts to enter data into computer according to pre-designed tables on accounting software.

After entering the original documents into the accounting software, the accounting software will process these documents and automatically updated the accounting information in the journal, ledger, general accounting book and related accounting books and cards.

Periodically, accountants check and compare data between general accounting books and detailed accounting books The comparison between the aggregated data and the detailed data is done automatically and always ensures the entered information is accurate and truthful.

Accountants use software to make accounting tables and financial statements at the end of the period or when requested.

2.2 Accounting for sales and business results determination in Hoang Phat Production Trading and Services Company Limited

2.2.1 Methods of sales and payment

Currently, the company is applying the following sales methods:

Firstly, wholesale method: According to the signed economic contracts, the buyer will send a representative directly to the company's warehouse to receive the goods according to the correct quantity, quality, and price as in the economic contract Related costs such as transportation costs can be borne by the seller or the buyer as agreed in advance Goods and finished products are stocked and then sold out according to orders and contracts that were signed before with the suppliers or customers.

Secondly, retail method: The sales department sells to retail customers buying goods in small quantities.

The company's customers are present in all provinces and cities across Vietnam, diverse in both retail and wholesale customers, however, most of the customers are small and medium-sized enterprises, so the main selling method is widely applied wholesale through the warehouse.

Hoang Phat Production Trading And Services Company Limited uses the following payment methods:

(1) Immediate payment (by cash or bank transfer) and (2) Sale on credit (later payment with interest on deferred payment).

First of all, immediate payment: The method is implemented when customers pay immediately the amount of goods after they receive enough goods to buy The application of the method is suitable for new and unfamiliar customers; the volume of goods with the total payment is not too large, and it is not necessary to have collateral such as deposits or guarantees by the bank As mentioned above, immediate payment can be made by cash or bank transfer:

Cash payment is a form of payment applied mainly at the company when customers pick up goods and pay immediately in cash and apply to orders with a value of less than 20 million VND.

Payment by bank transfer applies to customers who are far away from the company and have orders with a value of 20 million VND or more.

Secondly, credit sales and installment sales: This method applies to old customers, customers who have a long-term business relationship with the company.

In short, the payment methods applied by the company depend on the circumstances of how the business arises, depending on who the customer is.The flexibility and reasonableness in choosing payment methods have helped the company attract and maintain a diverse source of customers, increase the company's profits, and help the company improve its position in the market.

2.2.2 Accounting for revenue and revenue deductions

2.2.2.1 Overview of actual accounting for revenue and revenue deductions

Recognition of revenue of the company

Revenue is recognized by the company in accordance with Circular 133 – TT/BTC dated August 26, 2016, of the Ministry of Finance and Vietnam Accounting Standard No 14 – Revenue and other income

Only recorded to the revenue account when the customer has accepted the payment.

In addition, the company is currently making VAT declarations and payments according to the deduction method Therefore, sales revenue recognized at the company is sales revenue exclusive of VAT.

Recognition of revenue deductions of the company

In recent years, at Hoang Phat Production Trading and Service Co., Ltd., accountants did not record revenue deductions transactions by recording to the debited side of Account 511 - Revenue from sales and services provision as specified in Circular 133/TT-BTC that the company recorded into Account

521 - an account has been removed in this Circular.

Besides, the company does not have any activities and transactions related to trade discount and sales allowances, so the revenue deductions at Hoang Phat only include sales returns.

In case the Company has issued an invoice, the buyer has received the goods but then the buyer discovers that the goods are not in accordance with the specifications and quality, they want to return all or part of these goods.

When there is a transaction of returned goods, the buyer makes a "Return Minute" stating the reason for returning the goods, enclosed with a copy of the "VAT Invoice" of that shipment, the warehouse accountant will make a

"Returned goods receipt note” and accounted to the debit side of Account

511 If the company has declared tax, the two parties must make a record or agree in writing clearly stating the error and the accountant will make an error correction form The invoice clearly states the adjustment (increase, decrease) of the number of goods, the selling price, the VAT rate Based on the adjusted invoice, the seller and the buyer declaration and adjustment of sales and purchases, output and input taxes.

In case the company has delivered and issued an invoice, the buyer has not received the goods but discovers that the goods are not in accordance with the specifications and quality, they want to return the whole or a part of the goods The company must make a record clearly stating the goods type, quantity, value excluding VAT, VAT amount, reason for returning goods according to the sales invoice (Number, symbol, date of the invoice) and enclosed with the invoice Based on the invoice sent back to the company, the accountant will adjust the revenue and output VAT.

Sale contracts, Sales invoice, Inventory issuing notes, Cash receiving note Credit notes, VAT invoices, VAT declaration, Delivery note, Receiving note, Payment documents, Other documents,…

The account system used by the company to account for transactions related to revenue and revenue deductions is in accordance with Circular 133 of BTC, including:

Account 511 – Revenue from sales and services provisions

Account 3331 – Value Added Tax (VAT)

In addition to the level 1 accounts mentioned above, Hoang Phat also opened level 2 accounts, and level 3 accounts for account 511 – Revenue and services provisions to track details for each accounting object by nature their economics, in particular:

Account 5112 – Revenue from sales of merchandise

To reflect revenue deductions, the company uses account 521 – Revenue deductions to track, specifically:

2.2.2.4 Documents circulation and process of making accounting entries

(1) When a customer requests a quote for a product to be purchased, and sends it to the Sales Department, the Sales Department receives the request for a quote and makes a quote to send to the customer After evaluating the customer's reliability and volume of ordered goods, the Sales Department will decide whether the customer needs to make a deposit in advance and quote the customer.

If the customer receives a quote and agrees to buy the product, the Sales department will make a Sales contract or make a sale order and goods delivery note.

Sales module screen of fast accounting software

VAT invoice no AA/21E 0000262

Extract from actual company documents: On December 12, 2021, there was a sales transaction for customers according to VAT invoice AA/21E0000262

The process of entering invoices AA/21E 0000262 into Fast Accounting software is as follows:

From the desktop, click on the Fast Accounting icon on the desktop to start the software.

On the Fast Accounting software interface, select the sales module, select the sales voucher to input the output invoice 0000262

For convenience in tracking account receivables from customers, accounting software used intermediate account 131 to account for this receivable, whereby when customers pay by cash on hand or cash at the bank, cash accountants will enter corresponding cash receipts note or credit note to offset this receivable amount

Because the products in this invoice are tracked according to the specific identification method, in this invoice interface, the accountant will check the "Export inventories according to specific identification method" box.

In the general information section of the Invoice, enter the required items in turn, specifically:

With wholesale invoice 000262, due to Van Dao Co, Ltd is an old customer of the Company, so just press F3 to find and select the customer code that has been coded for this customer - KH2447, the related information such as address, and tax identification number (TIN), will be automatically updated.

In the invoice section, enter the following information from the keyboard:

Exchange rate: select VND, the automatic update rate is 1.00

Then, proceed to enter each good according to the listed invoice, because the goods have all been declared in the list of supplies and goods, so it is only close to typing the goods code, the software will display the goods' names For example, enter the code MUTK33_3.5, the software will automatically update the goods name as "Mut tam K30" and unit of measurement

At the warehouse code column, press F2 to select the issued warehouse according to the warehouse code - "KHO1"

In the Debit account row, the software will automatically choose Account 131 - Trade receivables

At the Credit account column, the software will automatically choose account 5111- Revenue from sales

In the column of quantity, unit price, and total amount VND, accountants will enter from the keyboard the quantity and unit price amount, the software will automatically calculate the total amount VND For example, with Invoice 0000262, enter the amount of the product has code is code MUTK33_3.5 - "Mut tam K30" as 230, the unit price is 335,000 VND and then total amount VND is automatically updated to 81,650,000 VND

In the Tax section, enter a tax rate of 10 to select a 10% rate for VAT and record the tax entry: Dr 131/ Cr 33311

After filling in all the information, the accountant compares the information, then clicks the "Save" button to save this sales invoice and we get the interface as below:

Revenue recognition screen for invoice code AA/21E0000262 on

Extract from actual company documents: On December 20, 2021, there was a sales transaction for retail customers according to VAT invoiceAA/21E 0000262

VAT invoice code 1C21THP/115

The process of entering the retail invoices 1C21THP/115 into Fast Accounting software is as follows:

Similar to the data entering and accounting process on the accounting software in Example 1, after accessing the sales voucher screen, the accountant performs the same steps as above:

1 Because the products in the invoice are tracked according to the specific identification method, in this invoice interface, the accountant will check the "Export inventories according to specific identification method" box.

2 Entering the required general information in turn, specifically:

• Press F3 to find and select the customer code that has been coded for Thanh Lam Production Trading and Services Co., Ltd - "KH1098", the related information such as address, and tax identification number (TIN), will be automatically updated.

• In the invoice section, enter the following information from the keyboard:

Exchange rate: select VND, the automatic update rate is 1.00

The software will automatically update the goods name as "PVC production" and unit of measurement as "Kg"

Warehouse code column: press F2 to select the issued warehouse according to the warehouse code - "KHO1"

Column of quantity, unit price, and total amount VND, accountants will enter from the keyboard as below:

Total amount VND (automatically calculate by software): 80,255,000 VND

• After filling in all the information, the accountant compares the information, then click the "Save" button to save this sales invoice and we get the interface as below:

Revenue recognition screen for invoice code 1c21thp/115 on

VAT invoice number HP/20E-0036973 was received from the

THE CUSTOMER TO RECEIVE GOODS RETURNED

Extract from actual company documents:

After receiving the returned goods from the customer of Hoa PhatFurniture Joint Stock Company, the accountant and warehouse keeper check the received goods and make a goods return receipt note to enter the returned goods as below:

Sales returned receipt note

The process of entering data into Fast Accounting software is as follows:

• From the desktop, click on the Fast Accounting icon on the desktop to start the software.

• On the Fast Accounting software interface, select the “Sales” module:

In the general information section of the Invoice, enter the required items in turn, specifically:

• Customer: Press F2 to find and select the customer code that has been coded for customer Hoa Phat Furniture JSC - KH0007, the related information such as address, and tax identification number (TIN), will be automatically updated.

• In the invoice section, enter the following information from the keyboard:

Exchange rate: select VND, the automatic update rate is 1.00

Description: ''Return goods of Invoice 1502 dated 22/3"

Based on the invoices received from customer, accountant record the following information:

Note: Enter the reason for the returned goods - "Defective goods"

• Then, proceed to enter each good according to the listed invoice, because the goods have all been declared in the list of supplies and goods, so it is only close to typing the goods code, the software will display the goods' names For example, enter the code GIADAPVC0.7_055, the software will automatically update the goods name as "San pham vai trang PVC" and unit of measurement as “met”

At the warehouse code column, press F3 to select the issued warehouse according to the warehouse code - "KHO1"

Cost of goods sold, total amount VND and total tax amount are automatically updated by software

• After filling in all the information, the accountant compares the information, then click the "Save" button to save this invoice and we get the interface as below:

Sales returned recognition screen on accounting software

2.2.2.5 Accounting books used for revenue and revenue deductions:

Accounting books used for revenue and revenue deductions at Hoang Phat include:

(1) Ledger of accounts: 511, 521 and other related accounting books

Ledger of accounts 521

(2) Detailed books of accounts: 511, 521 and other related accounting books

Details book of account 521

2.2.3 Accounting for cost of goods sold

2.2.3.1 Overview of actual accounting for cost of goods sold at Hoang Phat Production Trading and Services Co., Ltd

Hoang Phat Production Trading & Service Co., Ltd applied perpetual method to calculate cost of goods sold Under this method, cost of goods sold calculation is based on Goods issuing notes.

Accounting for cost of goods sold reflects the cost of goods sold in the period At the company, the cost of goods sold is periodically recalculated by the accountant in charge of inventory when an import/export transaction of inventories occurs through accounting software.

At the end of the month, based on the actual quantity and value of goods imported at the beginning of the period, the cost of goods sold is calculated according to the following formula:

Cost of goods sold Value of goods issued in the period

+ Purchase cost of goods issued in the period

The Company uses the cost of goods sold calculated in software, so after each transaction recording revenue the Company doesn’t reflect cost of goods sold At the end of each accounting period, the accountant shall determine the total cost of goods sold for whole period.

Hoang Phat Production Trading and Services Co., Ltd is currently accounting for the cost of goods sold using the perpetual method Besides, depending on the nature of each type of goods, the company will apply the FIFO or specific identification method to calculate the cost of goods sold

For goods that are tracked specifically for each batch, each product code and have a stable price, and little fluctuation such as PVC bag, bed sheet,… the company applies the method to calculate the cost of goods sold according to the specific method Under this method, goods imported in batches at any price will be exported at that price regardless of the time of import and export.

For the remaining products, the company applies the First in-first out method (FIFO): According to this method, they assume that the actual cost of finished goods imported first will be used to calculate the actual cost of finished goods sold first.

When an import or export of inventories transaction occurs, the accounting software will automatically update the cost of products and goods according to the set up the calculation method for each specific product.

The accounting documents used by the company in accounting for cost of goods sold include: Goods receipt notes, goods dispatch notes, sale contracts, purchase contracts, etc.

The accounts system used by the company to account for COGS-related transactions is in compliance with Circular 33/2016/TT-BTC of Ministry of Finance, including:

Account 632 – Cost of goods sold

2.2.2.4 Documents circulation and process of making accounting entries

At Hoang Phat, the goods are only delivered for sale purposes, so the Goods dispatch notes are made by the accountant when the customer purchases, the sales accountant prints 3 copies of dispatch notes and passes them to the chief accountant to sign After that, 1st copy is transferred to the storekeeper to prepare, pack the goods for this order and serve for recording books at the warehouse; 2nd copy is transferred to the customer to sign for confirmation, 3rd copy is stored at the accounting department to serve the record this transaction on accounting software.

(2) Process of making accounting entries

When a transaction related to the cost of goods sold is incurred,accountants based on the nature of that transaction to record it on the software, specifically, the accountant records it in the Debit side of account

632, detailing each type of specific transaction.

For the cost of goods sold accounting, the accountant chooses the

"Inventory" module to perform the functions designed on the software such as: placing dispatch orders, calculating cost of inventory by different methods The "Inventory" module is linked with other modules such as

"Sales", "Purchase" so that the accounting and tracking of imports - exports of each type of material is the most accurate and timely.

Inventory module screen

With a specific sales transaction, the accountant only needs to enter sale invoice only once time, the software will automatically record both sales revenue and cost of goods sold at the same time In addition, the calculation of the cost of goods sold for the goods included in the sale invoice is also automatically performed by accounting software based on the chosen method for each type of goods.

When the accountant wants to calculate the cost of goods sold, he/she will selects section Calculate cost of goods sold Inventory module in the Inventory module The screen pops up the Calculate the cost of goods sold, the accountant chooses specific identification method or FIFO method Then the software will automatically calculate and update the cost of goods sold for each chosen type of goods.

Accounting software screen for recording sales revenue and cost of

With sales invoice code AA/21E0000262 for Van Dao Co., Ltd inExample 1, the warehouse keeper has released the corresponding goods and the accountant has made and updated the Goods dispatch note no 0000262.

The process of entering the Goods dispatch note into the software are as follows:

1 After logging in to Fast Accounting software, go to the Inventory module, select Export.

In the Goods dispatch note, select the reason for preparing the invoice:

"Sales" and fill required information as below:

Goods dispatch note for sales invoice code AA/21E0000262

In the customer box, type the customer code - "KH2447" or press F2 to display the customer list and select Van Dao Co., Ltd, then the software will automatically update the information on the Good dispatch note such as address, TIN,

2 Next, the accountant enters in turn the goods listed in the orders, because the goods have all been declared in the list of inventories, it is only typing the code of the inventory the software will automatically display name, and unit of measure of these goods

For example, with Goods dispatch note no 0000262, accountant will enter inventory code as "GIADAPVC0.7_079", the software will automatically update the goods name as "San pham vai trang PVC" and the unit of measure as "meter" After that, the accountant selects/enters the warehouse code of "KHO1"

3 In the Debit account column, enter the number 632 to record to account 632 - Cost of goods sold

In the Credit account column, enter number 156 to record to account 156

4 In the Quantity column, fill in the output quantity according to the Goods dispatch note: 1,228

The unit price and total cost columns will be automatically calculated and updated after placing an order to calculate the cost of goods sold.

5 After entering data, the accountant rechecks the information and selects the "Save" button to save the Goods dispatch note

When this work is done, the software will automatically update the data in the import and export list to calculate the cost of goods sold according to the pre-set calculating method for each type of goods From the calculation of the cost of goods sold, the data will be transferred to the Ledger and Details book of account 632 and General Journal.

Similar to the process of processing and accounting for the cost of goods sold in Example 4, with sales invoice code 1C21THP/115 for Thanh Lam

Production Trading and Services Co., Ltd, the warehouse keeper has released the corresponding goods and the accountant has made and updated the Goods dispatch note no 115 The process of entering the Goods dispatch note into the software is the same as in Example 4:

1 After logging in to Fast Accounting software, go to the Inventory module, select Export

In the Goods dispatch note, select the reason for preparing the invoice:

Goods dispatch note for sales invoice code 1C21THP/115

2 The accountant fills in the following basic information:

Customer section: Enter "KH1098" or press F2 to display the customer list and select Thanh Lam Production Trading and Services Co., Ltd,accounting software will automatically update the information on the Goods dispatch note such as address, TIN

Entering the goods listed in the orders by typing the code of the inventory, accounting software will automatically display name, and unit of measure of these goods

For example, with Goods dispatch note no 115, accountant will enter inventory code as "MANGNHUA_042", the software will automatically update the goods name as "PVC product" and the unit of measure as "kg". After that, the accountant selects/enters the warehouse code of "KHO1"

Debit account column, enter: "632" to record to account 632 - Cost of goods sold

Credit account column, enter: "156" to record to account 156 - Merchandises goods

Quantity column: enter according to the Goods dispatch note: - 1605.10 The unit price and total cost columns will be automatically calculated and updated after placing an order to calculate the cost of goods sold.

3 After entering data, the accountant rechecks the information and selects the "Save" button to save the Goods dispatch note and the data will be transferred to the Ledger and Details book of account 632 and General Journal.

2.2.3.5 Accounting books used for cost of goods sold

Accounting books used for account the cost of goods sold at Hoang Phat include:

(1) Ledger of account 632 and other related accounting books

Ledger of account 632

(2) Detail books of account 632 and other related accounting books

Details book of account 632

2.2.4 Accounting for business administration expenses

2.2.4.1 Overview of actual accounting for business administration expenses

Business administration expenses includes selling expenses and administrative expenses

The company's selling expenses include expenses incurred in the process of consuming goods The company's selling expenses are grouped under the expense category In which, the company's main expenses include salaries and allowances for sales staff, cost of tools and equipment for the sales department, depreciation of fixed assets for the sales department, outsourced service costs, etc.

Administration expenses at the company include all expenses for general management and general activities of the whole company such as: salary ad bonus for administrative staff expenses, electricity and water costs, reception, depreciation of fixed assets for the administration department, fees, taxes and charges serve for administration activities,…

TABLE 2.1 SUMMARY OF BUSINESS ADMINISTRATION EXPENSES IN

QUARTER IV/2021 AT HOANG PHAT

No Description October November December Quarter

4 Office tools and supplies expenses 13,329,609 13,633,128 13,271,327 40,234,064

Source: Synthesized from actual data at enterprises in the Quarter IV/ of

The above table shows that the business administration expenses of enterprises arising in the fourth quarter of 2021 mainly come from expenses such as: Employee expenses (salary, bonus and related allowances); Expenses for materials and packaging used for business activities and Expenses for outsourcing services

Some of the main types of documents used in the recognition of business administration expense are as below:

Proposal for advance payment, salary and social insurance allocation sheets, material allocation sheet, depreciation allocation sheet, VAT invoice, sale invoice, payment voucher, credit notes from bank,…

Detailed account system of the account 642 - Business administration expenses is as below:

Account 64212: Materials and packaging expenses

Account 64214: Depreciation of fixed assets

Account 64217: Expenses for outsourcing services

Account 64222: Materials and packaging expenses

Account 64223: Office tools and supplies expenses

Account 64225: Taxes, fees and charges

Account 64227: Expenses for outsourcing services

2.2.4.4 Documents circulation and process of making accounting entries

When there are arising operations related to business administration expenses accountants base on invoices and vouchers (table of allocation and calculation salary, spreadsheet of depreciation allocation of fixed assets, payment notes, invoices ) enter data into the accounting software.

When a transaction related to business administration expenses is incurred, accountants based on the nature of that transaction to record it on the software, specifically:

The accountant records in the Debit side of account 6421 or account

6422, detailing each type of specific transaction.

Extract from actual documents arising at Hoang Phat Production Trading and Services, on November 1, 2021, Hoang Phat received a payment request attached to invoice number 0000300 from Royal Uni Vietnam InternationalFreight Forwarding Joint Stock Company for the payment of transportation service costs.

PICTURE 2.24 INVOICE CODE VN/21E0000300 FOR ACCOUNTING FOR

Accountant makes payment note on the accounting software as follows:

At the main interface, click on the module "Cash, deposits, loans", and select "Cash payment".

Cash, deposits, loans module screen on fast accounting

Payment note code 526 for accounting for business administration expense

The accountant then enters the data of the Payment note as follows:

Exchange rate: select VND, and the accounting software automatically calculates the exchange rate as 1.00

Payment notes type: Enter "8" or press F2 to select "Payment of expenses directly in cash"

Customer: Enter or press the F2 to quickly select the customer code:

"KH2067" corresponding to the customer Royal Uni Vietnam International Freight Forwarding Joint Stock Company The software will automatically fill in information such as: address, TIN,

Reason for payment: "Payment for customs service fee, freight" The Description box will update automatically

Debit account: 64227 - Business administration expenses: Outsourcing service

Amount: based on the payment request form and VAT invoice number VN/21E0000300 received, the accountant records: 4,300,000 VND

Select tax rate 10%, then software will automatically calculate the tax amount and the total amount to pay

3 Click the "Save" button to save this document, we will get the result as below:

Payment note screen number 526 for business administration expense

Extract from actual documents arise at Hoang Phat Production Trading and Services about one of the biggest expenses in Business administration expenses - Employee expense After the accountant in charge of salary calculates the October 2021 payroll sheet, the accountant records and records it in the software as follows:

Salary, bonuses and allowances calculation sheet for october 2021

At the main screen, select the "General" module, then select

"Accounting note" and enter the time in October 2021

Enter from the keyboard the following information

Description: Transfer salary to expenses

Exchange rate: select VND - the software automatically fills in the exchange rate at 1.00

Debit account: 64211 - Selling expenses: Employee expense

Credit account: 334 - Payable to employees

Click the "Save" button to save and we will get the accounting screen as below:

Accounting screen for transferring salary to business administration

2.2.4.5 Accounting books used for business administration expenses

Accounting books used for account the business administration expenses at Hoang Phat include:

(1) Ledger of account 642 and other related accounting books

Ledger of account 642

(2) Detail books of account 642 and other related accounting books

Details book of account 642

2.2.5 Accounting for financial income and financial expense

2.2.5.1 Overview of actual accounting for financial income and financial expense at Hoang Phat Production Trading and Services Co., Ltd

 Financial income of Hoang Phat company mainly comes from interest on bank deposits and realized and unrealized gains from exchange rate differences during the period.

 Financial expense of the company mainly consists of interest expenses from loans of the company.

In general, Hoang Phat's financial activities during the research period did not have many activities, therefore, these incomes and expenses do not arise regularly

Accounting documents used in accounting for financial income and financial expense mainly include:

Invoices, Receipt notes, Payment notes, Deposit interest calculation spreadsheet, Loan’s interest calculation spreadsheet, Foreign exchange rates monitoring table, Credit notes, Debit notes,…

In addition to level 1 accounts, the company also opens more level 2 accounts for each activity with different nature as below:

Account 5152 - Gains from foreign exchange rate differences

Account 6351 - Loss from foreign exchange rate differences

2.2.5.4 Documents circulation and process of making accounting entries

When a transaction related to financial activities is incurred, accountants based on the related documents and nature of that transaction to record it into the accounting software, specifically:

The accountant records in the Credit side of account 515, detailing each type of specific transaction for financial incomes; and records in the Debit side of account 635, detailing each type of specific transaction for financial expenses.

Extract from actual documents arising at Hoang Phat Production Trading and Services, on December 25, 2021, Hoang Phat received a Credit note from

MB bank about the company's deposit interest.

The accountant recognizes this interest into the accounting software as follows:

At the main interface, click on the module "Cash, deposits, loans", and select "Cash at bank receipt".

The accountant then enters the data of the Credit notes as follows:

Exchange rate: select VND, and the accounting software automatically calculates the exchange rate as 1.00

Receipt notes type: Enter "2" or press F2 to select "Receive details by customer"

Customer: Enter or press the F2 to quickly select the customer code:

"KH2371" corresponding to the customer MB Bank The software will automatically fill in information such as: address, TIN,

Credit account: 11214 - Vietnam Dong: MB Hanoi

Amount: based on the Credit note received, the accountant records: 451,338 VND

Description: Enter "Interest from deposits"

3 Click the "Save" button to save this document, we will get the result as below:

Credit note of the transaction recorded financial income

Extracting from the actual documents arising at Hoang Phat ProductionTrading and Services on December 22, 2021, the company received a Credit note from the bank about the loss of exchange rate difference when making foreign currency payments to customers Guangxi Zepu Industry and TradeCo., Ltd, accountants make a Payment note/Debit note on the accounting software as follows:

At the main screen, click on the "Cash, deposit, loan" module, and select

The accountant then enters the data as follows:

Exchange rate: select USD, enter the corresponding exchange rate: 23,070

Payment note type: Enter 2 or press F2 to select "Payment details by seller"

Customer: Enter or press F2 key to quickly select customer code:

"KH1670" corresponding to customer Guangxi Zepu Industry and Trade Co., Ltd The software will automatically fill in information such as address, TIN,

Reason for spending: "TT HD21003" The Description box will automatically update according to this reason

USD amount: Enter the original amount of USD 7,473.4

Exchange rate: the software automatically records according to the exchange rate of the booking date: 23,069.36

The accounting amount, the actual amount incurred and the loss from exchange rate difference are automatically calculated by the software

3 Click the "Save" button to save this document, we will get the result as below.

Accounting screen for recording financial expense

2.2.5.5 Accounting books used for financial income and financial expense

Accounting books used in accounting for financial income and financial expense at Hoang Phat include:

(1) Ledger of account 515, account 635 and other related accounting books

Ledger of accounts 635

(2) Detail books of account 515, account 635 and other related accounting books

Details book of account 635

2.2.6 Accounting for other income and other expenses

2.2.6.1 Overview of actual accounting for other income and other expense at Hoang Phat Production Trading and Services Co., Ltd

• Other income is income derived from activities unrelated to the ordinary activities of the enterprises, such as gains on the liquidation of assets, and gains from compensations, etc.

• Other expenses include expenses unrelated to the ordinary activities of the enterprises such as expenses for disposal of fixed assets, compensations for breaches of contract, tax penalty and other expenses.

Invoices; Receipt notes, Payment notes; Debit notes, Credit notes from bank, Tax penalty decisions, Compensation decisions,…

At Hoang Phat, accountants only use level 1 accounts to record and track financial income and financial expense, but do not open details to level 2 and level 3 accounts because the company does not have many transactions related to other activities

2.2.6.4 Documents circulation and process of making accounting entries

Documents circulation and process of making accounting entries for

When a transaction related to financial activities is incurred, accountants based on the related documents and nature of that transaction to record it into the accounting software, specifically:

The accountant records in the Credit side of account 711, detailing each type of specific transaction for financial incomes; and records in the Debit side of account 811, detailing each type of specific transaction for financial expenses.

In the research period, the company has not any transactions relating to other income and other expense

2.2.6.5 Accounting books used for financial income and financial expense

Accounting books system used for recording of financial income and financial expense includes:

(1) Ledger of account 711, account 811 and other related accounting books

Accountants receives vouchers when accounting transactions is arising

Preparing vouchers and processing prepared documents

Related accountant and chief accountant check voucher and sign vouchers, documents.

Accountant records these accounting documents in software.

(2) Detail books of account 711, account 811 and other related accounting books

2.2.7 Accounting for corporate income tax

2.2.7.1 Overview of actual accounting for corporate income tax at Hoang Phat Production Trading and Services Company Limited

Quarterly, accountants based on the corporate income tax declaration calculate temporary corporate income tax to record the temporarily payable corporate income tax amount to corporate income tax expenses.

The company makes CIT finalization at the end of the fiscal year and records the payable corporate income tax in the corporate income tax expense of the fiscal year.

Related supporting documents are used in accounting for corporate income tax at Hoang Phat Production Trading and Services Company Limited include: Corporate income tax declaration, Debit notes, Payment notes,…

Hoang Phat only use one account for recording and tracking corporate income tax expenses:

Account 821 – Corporate Income Tax expenses

2.2.7.4 Document circulation and process of making accounting entries

At the end of the fiscal year, based on the tax finalization declaration, if the temporarily payable corporate income tax amount in the year is smaller than the payable amount in that year, the accountant shall record the additional payable corporate income tax amount into corporate income tax In cases the temporarily payable corporate income tax amount is larger than the payable amount in that year, the accountant must record the reduced corporate income tax which is the difference between the temporarily payable corporate income tax amount in the year and the payable amount.

General module screen of fast accounting

At the end of the year, accountants make a transfer entry to determine business results by:

1 Log in to the accounting software, select the "General" module, select

"Make transfer entries", and select the accounting period 2021.

2 The software has the function of automatically calculating CIT according to current regulations, so accountants do not need to calculate manually.

In the general information section:

Description: Enter the content from the keyboard into the software -

"Transfer calculated of CIT payable in 2021 into CIT expense"

In the detail information section:

Debit account: Account 821 - CIT expense.

Amount: accountant entered the amount: VND 100,095,079 is the CIT amount that the accounting software has calculated.

3 Check the document again and click the "Save" button to save the document.

Accounting screen for recording transactions related to corporate

RELATED TO CORPORATE INCOME TAX EXPENSE

CIT expense is determined after determining the total accounting profit before tax from all business activities of the enterprise Due to the company mainly operating in commercial activities, so the profit from sales and service provision accounts for the largest proportion of the total profit of the business.

In 2021, the company generates accounting profit before tax of VND500,475,395 and current CIT expense of VND 100,095,079.

2.2.7.5 Accounting books used for corporate income tax

Accounting books system are used for recording and tracking corporate income tax expense of the company includes:

(1) Ledger of account 821 and other related accounting books

Ledger of account 821

(2) Detail books of account 821 and other related accounting books

Details book of account 821

2.2.8 Accounting for business result determination

2.2.8.1 Overview of actual accounting for business result determination at Hoang Phat Production Trading and Services Co., Ltd

Business results are the final results of ordinary business activities and other activities of an enterprise in a certain period, expressed in profit or loss.

Currently, accounting work at Hoang Phat has applied accounting software, so accounting and determining business results become simpler, easier, and more accurate Accountants no longer have to manually calculate the company's business results, but instead, the company's business results are calculated automatically thanks to the support of Fast Accounting software.

Account 421 – Undistributed profit after tax

2.2.8.3 Document circulation and process of making accounting entries

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 each month, in order to determine business results, accountants need to carry out the accounting entries The accounting entries are:

TABLE 2.2 TRANSFERRING REVENUE - EXPENSE TO DETERMINE BUSINESS

RESULTS AT THE END OF DECEMBER 2021

Source: Synthesized from actual data at enterprises in December 2021

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.

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 01/12/2021, To: 31/12/2021

The software automatically calculates and determines the company's business results in the December 2021

Accounting software screen for all of the transferring entries to

2.2.8 Accounting books used for business results determination

(1) Ledger of account 911 – Business results determination

(2) Detail books of account 911 – Business results determination

PICTURE 2.46 DETAILS BOOK OF ACCOUNT 911

2.2.9 Financial statements preparation in accounting for sales and business results determination

Financial statements are mainly used to reflect accounting for sales and business determination at Hoang is Income statement

Hoang Phat Production Trading and Services Company Limited

ITEM Code Note Current year Previous year

1 Revenues from sales and service provisions 01 137.685.508.483 128.364.298.754

3 Net revenues from sales and service provisions 10 137.682.985.003 128.364.298.754

5 Gross revenues from sales and service provisions 20 11.283.804.043 11.242.476.032

15 Current enterprise income tax expense 51

17 Profits after enterprise income tax 60 400.380.316 776.380.351

Preparer Chief Accountant Legal Representative

(sign, name) (sign, name) (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 accounting work for sales and business results determination at Hoang Phat Production Trading and ServicesCo., Ltd.

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.

3.1.4.4 Accounting policies, accounting regimes and accounting system

The company strictly complies with the Accounting Law and Vietnamese Accounting Standards, and the accounting regime according to Circular 133/2016 TT-BTC dated August 26, 2016, of the Ministry of Finance.

(1) Accounting period: The company's accounting period starts from 01 January to 31 December annually, is consistent from year to year which is in accordance with current accounting circulars and regulations

(2) Accounting form: The company uses Journal - Ledger accounting form - This is a simple, easy-to-do, easy-to-check and compare form, suitable for small-sized enterprises with few business operations, the content of economic activities is simple and completely suitable to size and current conditions of the company

(3) Accounting voucher system: The company always well implements regulations on invoices and vouchers according to regulations on the form and content of relevant authorities and sectors.

Based on the current accounting system and Circular 133/2016 TT-BTC dated August 26, 2016, of the Ministry of Finance, the company has built its own system of appropriate vouchers and invoices.

Accounting books are printed by the company to store in a complete, clear, reasonable, and scientific manner, partly contributing to the overall success of the business development in the whole company.

The company's accounting reporting system is prepared according to the regulations regarding the preparation and presentation of Financial Statement in Circular 133/2016/TT-BTC of the Ministry of Finance, thereby helping the company's reporting system consistency between financial years

The company has been applying Fast Accounting software to support accounting work at the company The software has been improved and established based on the size, characteristics and business situation of the company.

In general, the accounting work at the company is done completely in terms of both form and content.

3.1.4.5 About the company's tax payment obligations to the State:

The accounting and declaration of taxes are done quite closely, the company always performs the calculation correctly and sufficiently the amount of tax payable into the state budget.

Besides the mentioned advantages, the accounting for sales and business result determination of the company also has the following limitations:

(1) The company's account system does not match Circular 133/2016 TT-BTC dated August 26, 2016, of the Ministry of Finance, specifically: for accounts used to reflect revenue deductions, instead of recording and tracking on the Debit side of account 511 - Revenues from sales and services provisions, the company is tracking on account 521 - an account that was removed in Circular 133.

(2) The recording and tracking of invoices and vouchers of the company is not scientific: Invoices and vouchers are not numbered in chronological order that transactions arising

(3) The company does not have many promotions or discounts for customers

(4) The accounting of salary expenses for employees of the sales and administration departments is not correct account All salaries of sales staff, as well as salaries of administration staff, are recorded into account 64211 - Selling expense: Employee expense

(5) The company does not focus on management accounting work There is no accountant in charge of management accounting, and management- related activities such as making estimates and budgets have not been paid attention.

(6) The reports, especially the financial statements, are only listed but cannot be analyzed The information in the financial statements is just raw data, not analyzed or evaluated compared to previous periods or compared to other companies in the market.

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.

However, thanks 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 To achieve the current results, accounting work, especially accounting for sales and business results determination at the company also contributes significantly.