Accounting for sales at general motors vietnam compan

INTRODUCTION

The Rationale of the Thesis

Since the Vietnamese government adopted an open-door policy, foreign direct investment has become increasingly attractive, offering both opportunities and challenges for international corporations While companies benefit from lower manufacturing costs and access to a growing market, they also face stiff competition from both global firms and local SMEs, necessitating effective strategies to attract consumers In Vietnam's automobile sector, where middle-class buyers are well-informed about financial and product quality, the success of companies hinges on building strong relationships Each interaction is crucial, and businesses must consistently demonstrate the quality of their goods and services, reflected transparently in their financial performance.

Sales is more than just the exchange of goods for money; it is a crucial aspect of business that influences social reproduction and helps manufacturers align production with consumer demand For business owners, increased sales translate to higher capital turnover and profits, which often correlate with improved living standards for employees In today's globalized economy, effective accounting practices are essential for organizations to assess their financial health, making sales accounting particularly important However, many companies use sales accounting primarily for tax purposes, neglecting to analyze sales factors and utilize the data effectively Research into sales activity indicators can enhance companies' understanding of their sales performance, providing vital insights for business leaders to evaluate strengths and weaknesses within their sales departments.

Báo cáo thực tập tổng hợp

Thank to these above reasons and along with the kindly guidance of my supervisor PhD, CPA Tran Manh Dung, I have finally chosen the research topic

“Improving the Accounting for Sales at General Motors Vietnam Company”.

Research Objective

This study aims to assess the current state of sales accounting at GMV and to analyze its advantages and disadvantages Ultimately, the findings and recommendations presented will seek to address the challenges GMV is currently facing in its sales accounting practices.

Research Methodology

To do the research, variable methods of collecting data were applied Generally,

I focused on two main types of data being primary and secondary data The process of collecting was taken place as below:

The initial phase of the research involved gathering secondary data due to its accessibility, utilizing both internal and external sources Internal sources comprised company documents, including invoice requests, invoices, and Z-option sheets utilized for posting in SAP.

…I also picked up the information from financial statements and other related documents whilst the main source of external data came from the legal documents, internet and so on

After gathering secondary data, I proceeded to collect primary data through an analytical process This study utilized observation and interviews as key methods for data collection Throughout my internship, I engaged in various activities that enriched my understanding and contributed to the research findings.

Invoice requests Invoices Z-options Financial statements

Legal documents Newspapers Internet Ohers

The internship report highlights the valuable opportunities to gain insights from observing the roles of sales accountants and the accounting computer system Additionally, I conducted various interviews, both directly and indirectly, utilizing emails, telephone calls, and online platforms to gather comprehensive information.

After the collecting procedure, the data processing was performed The process included analysis, comparison and synthesis to reflect and assess the accounting for sales in GMV.

Research Dimesion

During my internship at GMV, I conducted research analyzing the 2015 sales data recorded in the accounting books This report specifically examines three key areas of sales accounting: Sales Revenue, Costs of Goods Sold, and Selling Expenses.

THEORETICAL FRAMEWORK OF ACCOUNTING FOR SALES

The Nature of Selling Goods

In the business realm, the buying and selling processes are fundamental, with sales encompassing not just the exchange of money for products or services but also a variety of activities aimed at customer engagement, such as identifying potential clients, shaping demand, delivering goods, and fostering customer loyalty The definition of "sales" can vary based on context; however, it generally refers to the revenue generated from selling products or services (net sales) in accounting terms Essentially, sales can be characterized as a transaction involving the exchange of money or value for ownership of a product or the right to a service.

A contract for the promise to purchase products at a specified future time is fundamental in sales and marketing Four essential elements define a valid sale: first, both the seller and buyer must have the capacity to enter into a contract; second, there must be mutual agreement on the terms of the exchange; third, the products or services involved must be capable of transfer, including ownership titles; and finally, there must be consideration, which refers to the money or cash equivalent that is paid or promised.

Direct selling involves delivering products and services directly to buyers at the company's warehouse or factory, often without maintaining stock In this process, companies receive payment from buyers upon delivery, confirming the transaction and recognizing the completion of the sales process.

The shipment sale method involves the seller delivering goods to customers based on the terms outlined in signed contracts, while retaining control over the quantity shipped Once customers make payment or accept payment terms, all benefits and risks are transferred to them In practice, GMV primarily utilizes a wholesale approach that integrates customer shipments, specifically targeting dealers Wholesaling encompasses the distribution of products to retailers, wholesalers, merchants, and various industrial, commercial, and institutional users.

Báo cáo thực tập tổng hợp plays a role of the third party brokering deals between these businesses.

Wholesaling theoretically takes place in case large quantities of merchandise are reassembled, sorted, then repackage, and distribute in smaller lots.

Wholesaling is one step existing on the supply chain, which combines various companies like suppliers, manufacturers and retailers Being developed in the

1980s to meet the need of maximizing efficiency in the business process, supply chain management (SCM) involves in moving goods from original suppliers to end users.

Wholesale financing process is taken place via the three-party contract method which is displayed as the figure 2.1 below:

Figure 2.1: GMV’s wholesale financing process

In the vehicle sales process, GMV initially receives 70% of the payment from the bank and 30% from dealers within two to three days Following this, GMV issues invoices for the sold vehicles based on the purchase orders (PO) submitted by a staff member to the billing accountant.

The SM department facilitates the process by sending the car's original documents to the bank as collateral for the mortgage When a final user purchases a vehicle, the dealer repays 70% of the Cost of Goods Sold (COGS) from the client's payment, enabling the bank to release the original documents and ensure their delivery to the customer.

30% Dow n Pay ment Send backoriginal document

The comprehensive internship report highlights the benefits of a collaborative process involving banks, GMV, and car dealers The bank assumes a 70% risk on down payments, fostering relationships with GMV’s dealers who only need to prepay 30% of the car's value This arrangement not only incentivizes dealers to engage more actively but also allows GMV to better manage its cash flow Additionally, GMV supports its dealers by supplying spare parts for warranty services to end customers, with each purchase order monitored through an S-slip issued by the AS department, ensuring accurate invoicing by the billing accountant.

Consigned goods remain the property of the enterprise until they are officially consumed, resembling a shipment sales model The commission paid to the agent is categorized as a selling expense, with agents compensated through agency commissions or price markups.

2.1.2.4 Sales under the deferred payment, installment payment

Deferred payment and installment payment methods allow businesses to collect revenue over multiple transactions Customers make an initial payment at the time of purchase and agree to pay the remaining balance in subsequent installments, often incurring a specific interest rate.

2.1.2.5 Sales in the form goods barter

To enhance production efficiency and address inventory challenges, some businesses engage in product exchanges to acquire different goods The consumption process of these products is only completed when they are sold to customers, at which point the business recognizes its revenue.

Accounting for Sales

2.2.1 The Responsibilities of Accounting for Sales

Sales activities are crucial for minimizing product loss and identifying slow-moving inventory, enabling businesses to implement strategies that boost product demand Sales accounting results offer enterprises a comprehensive view of their operations, allowing managers to pinpoint deficiencies and imbalances among purchases, sales, and inventory, facilitating timely and accurate decision-making.

Financial statements offer crucial insights into an organization's operational and financial status, enabling internal stakeholders to understand the business landscape better This information assists managers in fulfilling their management roles and monitoring the broader economic environment Additionally, the executive board can utilize these insights for thorough analysis and decision-making.

The internship report evaluates the adherence to policies and the fulfillment of obligations in business management This analysis provides external stakeholders with insights into the company's capabilities in purchasing, inventory management, and sales, which are crucial for making informed decisions regarding investments, loans, or establishing business partnerships.

2.2.2 Requirements of Accounting for Sales

Three main requirements for sales accounting are:

1 Tightly control the consumption of goods on all dimensions: quantity, quality…

2 Avoid the unexpected problems of loss, damage, corruption, waste

3 Consider the reasonableness of the cost, accurately allocate selling expenses to determine the final business results.

Revenue refers to the total economic benefits received by an entity from its regular activities during a specific period, leading to an increase in equity, excluding any contributions from equity participants, as defined by IAS 18.

In accounting, amounts received from customers are recorded as "Sales" or "Net sales" on the Profit and Loss (P/L) account, indicating that sales occur only upon the delivery of products In financial analysis, "sales" refers specifically to net sales, distinguishing it from gross sales Sales encompass transactions that occur during professional selling or marketing initiatives Traditionally, service expenditures are recorded separately from merchandise sales, although the accounting for service sales parallels that of tangible goods Sale revenue typically originates from three primary sources.

2 Revenue from the rent of company’s assets by a third party.

Sales lead to a reduction in inventory, but inventory accounting is distinct from sales accounting Sale revenue represents the gross influx of economic benefits and should not be offset against expenses It arises from past business activities, while income from non-core operations is categorized as gains rather than sale revenue For example, a business primarily selling automobiles recognizes income from vehicle sales as sale revenue, whereas income from selling scarves produced during manufacturing would be classified as a gain.

The report on comprehensive internships highlights that equity increases during the accounting period, excluding those from shareholder contributions Revenue from sales should stem from the growth in the company's net assets; however, net asset increases can also occur through additional capital investments by owners, which do not qualify as sales revenue.

Companies implement various voucher systems and rotation processes tailored to their sales methods Sales revenue, consumption tax, and deductions are documented through vouchers and associated records like sales invoices (VAT invoices), delivery notes, payment notes, and dispatch notes These documents serve as the foundation for accurately determining and recording entries in accounting books The accounting for sales revenue, consumption tax, and sales deductions relies on these key accounts.

- 511: Revenues from Sales and Services

Using the double-entry bookkeeping method, a company records sales by debiting cash or accounts receivable and crediting the sales account, reflecting the actual transaction value after discounts and taxes Revenues primarily arise from the sale of goods and services, although businesses can also generate income through interest, dividends, and royalties As outlined in Circular 200/2014/TT-BTC, the journalization process for sales is clearly defined.

1 “When selling products, goods or providing services for immediate cash, the following accounts shall be recorded:

When accounting for products, goods, and investment properties subject to VAT, special excise duty, import duty, and environmental protection tax, it is essential to record revenues based on tax-exclusive selling prices Additionally, indirect taxes payable, including VAT payable calculated using the subtraction method, must be distinctly separated in the financial records.

Cr 511 – Revenues (tax-exclusive prices)

Cr 333 – Taxes and other payables to the State.”

When selling products or services for immediate cash, it is essential to accurately record the associated accounts For products and investment properties subject to indirect taxes such as VAT, special excise duty, import duty, and environmental protection tax, revenues should be documented based on tax-exclusive selling prices Additionally, it is crucial to separate indirect taxes payable, including VAT, using the subtraction method.

Dr 112 – Cash in bank (total payment)

Cr 511 – Revenues (tax-exclusive prices)

Cr 333 – Taxes and other payables to the State.”

Recognition of cash sale and credit sale is performed as the table below:

Table 2.1: Recognition of cash sale and credit sale Cash sale

Credit Sales Revenue (Income Statement)

When the receivable is paid in due, the receivable balance will have be reduced and the accountantwill record the following double entry

Determining the exact moment a sale occurs can be confusing, as it may depend on whether the goods are dispatched, delivered, or when payment is made Generally, a sale of goods is recognized when the seller transfers the risks and rewards of the asset to the buyer, which typically happens upon delivery It's important to note that the receipt of payment is not directly tied to recognizing the sale, as income is recorded under the accrual basis of accounting.

The Income Statement is structured to highlight Net Income, calculated as Revenues minus Expenses, with the total expenditures detailed below This format allows for a clear assessment of financial performance, reflecting the actual monetary value of transactions Accountants may also recognize any applicable discounts from the list price during sales.

511: Revenues from Sales and Services

- The amount of SCT, export and import taxes relating to the actual revenue generated within the period.

- COGS returned and sales discounted should be transferred at the end of the period.

- Net income is transferred to account

- Revenues from sales and servies

- Value of beginning finished goods.

- Value of finished goods produced in the accounting period.

- Transferred value of finished goods (if the company applies periodic method for inventory)

- Actual value of warehousing finished goods sold within the period.

- Actual transferred value of beginning finished goods (if the company applies periodic method for inventory)

- Actual value of ending finished goods

- Purchased goods (includes all types of non-refundable taxes)

- Outsourced processing goods (including purchasing price and processing fee)

- Surplus goods in merchandise inventory

- Transferred value of ending inventory (if the company applies periodic method for inventory)

- The value of goods taken out for selling, outsourcing or manufacturing.

- Transferred value of beginning inventory (if the company applies periodic method for inventory)

- Value of cost of selling inventory

- The number will be received from customers when selling products and services

- Revaluation of receivables in foreign currency (when the exchange rate is bigger than 1)

- The amount was paid by customers

- Cash discount and trade discount

- Revaluation of receivables in foreign currency (when the exchange rate is smaller than 1)

The accounting procedures for revenue and selling according to the Circular 200/2014/TT-BTC are illustrated in the figures below:

Figure 2.2: Accounting for revenue of products and services

Account 521 is designated for recording sales deductions, capturing adjusted sales figures during the accounting period This account includes trade discounts, discounted sales, and sales returns, providing a comprehensive overview of reductions in sales and service revenue.

Accountants are tasked with meticulously tracking trade discounts, sales discounts, and sales returns for each customer and type of goods sold, encompassing both products and services At the conclusion of the accounting period, they must transfer all amounts from account 521 to account 511.

- "Revenue from sales and services" to determine the net sales of products, goods and services that were actually made during the reporting period.

This account is processed as follows:

- The trade discounts have been accepted for customers;

- The sale price reduction was approved for the purchase;

- Sales of goods sold are returned, money is returned to the buyer or subtracted from the customer receivables on the products and goods sold

Accounting for Selling Expense

- Salary allocation and salary deduction table

Accountants use Account 641 - "Selling expenses", to collect and forward selling expenses actually incurred in the accounting period This account is structured as follows:

Increase selling expenses Reduce selling expenses

Transfer selling expenses to determine business result

This account has no balance at the end of the accounting period.

Accountants utilize VAT invoices, payment orders, payroll, and detailed selling expense reports to accurately record monthly selling expenses in the general journal and subsidiary ledger They then transfer these entries from the general journal into the ledger to maintain precise financial records.

THE CURRENT SITUATIONS OF ACCOUNTING FOR

Features of GMV Company

- Company name: General Motors Vietnam

- Location: Km12, Tu Hiep, Thanh Tri District, Hanoi

- The legal representative: Director, Head of Government Relations Nguyen Van Quy.

GM Vietnam Co Ltd., established in 1993 and located in Hanoi, Vietnam, specializes in designing, building, and selling vehicles and auto parts Formerly known as Vietnam-Daewoo Motor Company Limited, the company rebranded in July 2011 It operates as a subsidiary of Daewoo Songdo Development Co., Ltd and distributes its products through a network of dealers.

In this proposal I will go abysmal into the information of vehicle business activities.

The company's car products include:

- Pick-up car (Colorado – imported from Thailand)

- Five-seat passenger car (Cruze, Aveo, Spark …)

- Seven-seat passenger car (Captiva, Orlando …)

Business activities in trading involve the movement and distribution of products within the marketplace, encompassing the process from producers to end consumers Key characteristics of these operational activities include efficient logistics, effective supply chain management, and a focus on customer satisfaction.

1 The flow of goods is the basic economic movement of commercial enterprises, which is the total of those activities: purchasing process, exchange and storage of products.

2 The purposes of business activities in trading enterprises grouped by sectors:

3 Methods of goods turnover: wholesale and retail

 Wholesale is the sale of goods for the intermediate business/third party/dealder but does not exchange directly to the final customers.

 Retail is selling directly to the final consumer.

Wholesale financing process is taken place via the three-party contract method which is displayed as the figure 3.1 below:

Figure 3.1: GMV’s wholesale financing process

In the payment process, GMV initially receives 70% of the payment from the bank and 30% from dealers within two to three days Subsequently, GMV issues invoices for vehicle sales to dealers based on the purchase orders (PO) submitted to the billing accountant by their staff.

The SM department facilitates the process of car financing by sending the vehicle's original documents to the bank as collateral for the mortgage When a consumer purchases a car, the dealer repays 70% of the Cost of Goods Sold (COGS) from the customer's payment to enable the bank to release the original documents, which are then delivered to the buyer This arrangement benefits all three parties involved: the bank mitigates its risk by covering 70% of the down payment, while gaining access to GMV's customer base; GMV's dealers are incentivized to collaborate with the bank, as they only need to prepay a portion of the cost, leading to increased activity and sales.

30% Do wn Pay men Send backoriginal document

GMV effectively manages its cash flow by utilizing a method that accounts for 30% of the car's value In addition to selling vehicles, GMV supplies spare parts to dealers for warranty services, ensuring customer satisfaction Each purchase order from dealers is monitored through S-slips issued by the AS department, allowing billing accountants to generate accurate spare parts invoices based on these slips.

Figure 3.2: Diagram of the structure of General Motors Vietnam

Board of General Directors comprises Chief Director and Deputy General Director.

The Chief Director oversees all company activities and is responsible for assignments presented to the Board of Directors Additionally, the Chief Director serves as the legal representative of the corporation.

The Deputy General Director executes tasks assigned or approved by the Chief Director, while also advising on workforce organization to align with the company’s manufacturing needs and business policies.

The Sales Department is responsible for developing and implementing business strategies, as well as analyzing performance outcomes This department also manages the company's reputation, organizes marketing activities to sustain and expand market presence, diversifies services, and enhances overall business efficiency.

The Sales Division at GMV has developed a tailored approach to effectively market its products and services, ensuring alignment with customer needs Certain offerings require direct, confrontational communication between sales team members and dealers to secure a sale, while others are efficiently sold through telephone orders.

The primary role of a sales executive is not merely to sell, but to coordinate the sales team's efforts to ensure optimal efficiency in managing customer orders The goal is to achieve maximum sales volume while minimizing operational costs.

Salespeople are responsible for promoting and selling the company's products and services They need to possess a unique perspective, along with the skills and motivation to enhance their creativity, supported by guidance from colleagues and management.

The department assists the Chief Director in managing the workforce and ensuring laborers meet professional standards Their responsibilities include developing strategies to enhance workforce quality, overseeing employee health and safety, and ensuring salaries comply with government regulations They also create salary lists for different transfer categories, evaluate pay rates for ship repairs, and calculate annual salaries for employees.

The article emphasizes the importance of documenting and organizing manufacturing activities in line with government regulations It highlights the need for recommending the Chief Director to adhere to current financial accounting standards meticulously Additionally, it underscores the necessity of regularly providing updates on the financial position, capital resources, and the efficiency of capital resource expenditures to the Chief Director.

3.1.6 Characteristics of Firm’s Finance Activities

Accounting Department is in authority for delivering financial accounting and managerial accounting information satisfactorily for manipulators.

Accountant has to catalogue and check documents at the beginning, journalize, make calculations along with report the company’s whole assets in the approved and promptly manner.

Effectively managing and settling tax payables, notes payables, accounts payables, accounts receivables, and dividend payables is crucial for financial health Additionally, it is essential to prepare and submit financial reports, tax returns, and final settlements, while ensuring compliance with mandatory information requirements.

Figure 3.3: Diagram of accounting department’s structure

The accounting system of an enterprise is shaped by its business characteristics and the extent of delegated financial-economic management, adhering to the guidelines set forth in Circular 200/2014/TT-BTC, issued on December 22.

2014 and the additional amendments account according to the circular.

- The accounting form of general journal shall comprise main documents underneath:

Accounting for Revenue at General Motors Vietnam

Under Vietnamese accounting standard - Conditions for revenue recognition (Accounting Standard No 14).

Sale revenues are recognized when five key conditions are met: the enterprise has transferred the majority of risks and benefits of ownership to the buyer, the business no longer retains management rights over the goods, the turnover is determined with certainty, the enterprise will gain economic benefits from the sale, and the costs related to the sale can be identified The sales procedure involves the transfer of ownership of goods to the customer, who is obligated to pay the company as per the original agreement Once the customer accepts the products and payment is made, the company completes the sales process, allowing the accountant to recognize the revenue.

 VAT invoice of selling car

 VAT invoice for incentive of car

 VAT invoice of selling spare part

 VAT invoice for incentive of spare part

GMV maintains a chart of accounts that includes both Vietnamese and SAP accounts Within the scope of this thesis, I will provide examples of Vietnamese standard accounts associated with operational activities and their corresponding sub-accounts.

 112011 Cash in bank – VND – Techcombank

 112036 Cash in bank – USD – Techcombank

 131110 Accounts receivable – finished products sale

 333111 Output VAT payable – spare part – opening balance

 333113 Output VAT payable – passenger car – opening balance

When selling a car, dealers receive orders based on planned targets and market demand announced by SM staff The billing accountant then issues a VAT invoice that includes key details such as the amount before VAT, the VAT amount, the total payment, and customer information.

The dispatch note being the source document for billing accountant to issue VAT invoice of selling car is issued by GPSC staff, SM employee only makes invoice request

When customers bring their vehicles to dealers for warranty services, GMV dealers must reach out to the AS department to order necessary spare parts The billing process for selling spare parts follows the same procedure, ensuring consistency in invoicing for each spare part transaction.

Báo cáo thực tập tổng hợp pinned with an S-slip demonstrating items sold to dealers Besides, spare part invoice contains the discount ratio of 18% for dealers.

Generally, VAT invoice includes 3 copies:

1 Copy 1 (white): first copy for keeping

2 Copy 2 (red): second copy for customer

3 Copy 3 (green): third copy for internal use

Each invoice must include essential details such as the issue date, customer information, and cash receipt amount, along with specific information like the VIN number and engine number to ensure comprehensive documentation.

PO number for each dealer in invoice for car and 18% of discount for dealers in invoice spare part

After car invoices are issued, they are sent to the chief accountant or finance director for signature before being scanned and forwarded to the bank as part of the three-party mortgage contract Spare part invoices require the billing accountant's signature Dealers must transfer 30% of the vehicle price to GMV before receiving the second copy of the car invoice Once the final customers complete their payment, dealers will transfer the remaining 70% to GMV's bank account, allowing them to obtain the original vehicle documents and deliver them to their customers.

For example, at date 28 th , April 2015, a car was delivered to Nam Thai Private Company Unit price less 10% VAT is 491,400,000VND, customers paid in credit.

CAR DISPATCHED NOTE Manufacturer: General Motors Vietnam Limited Company

Number: RLLJF696EGH934830 Car type: Chevrolet CRUZE KL1J-JNE11/AA5-1

Weight: 1420 kg Made in: Viet Nam

Number of seat: 5 Working volume:

Figure 3.6: VAT invoice for selling car

General Motors Vietnam Limited Company

Address: Tu Hiep Commune, Thanh Tri District, Hanoi

Form: 01GTK3/001 Code: GM/14P Invoice No: 0007631 Date: 28/04/2015

(Third copy for internal use)

Customer Name: Nam Thai Private Company

Address: T6/27 Binh Duong Road, Binh Duc 2, Binh Hoa Ward, Thuan An, Binh Duong

No Content Quantity Unit prize Amount

Chevrolet CRUZE KL1J-JNE11/AA5-1

Exchange rate: Total in VND:

In this Amount without VAT: 491,400,000

Amount in words: Five hundred forty million, five hundred forty thousand dong

Figure 3.7: Spare Part Dispatched Note

General Motors Vietnam Inv No: S-2015-2719-1

Customer: Hung Thuan Thanh Commercial Join Stock Company

Part/Job Name Unit Qty Sale Price Sale/Lab Amt.

BEFORE DISCOUNT 169,711.60 DISCOUNT (18%) 30,502.22 AFTER DISCOUNT 139,209.38

Figure 3.8: VAT invoice for selling spare parts

General Motors Vietnam Limited Company

Address: Tu Hiep Commune, Thanh Tri District, Hanoi

Form: 01GTK3/002 Code: GM/15P Invoice No: 0006446 Date: 28/04/2015

(Third copy for internal use)

Customer Name: Hung Thuan Thanh Commercial Join Stock Company

Address: Km 9, Ngoc Hoi Road, Hoang Liet Ward, Hoang Mai District, Hanoi

No Content Quantity Unit prize Amt. without VAT

Amount in words: One hundred fifty three thousand zero hundred eighty dong

3.2.2 Procedures of Accounting for Sales

The formula of documental transposition

Figure 3.9: The formula of documental transposition

The Sales division collaborates with the Finance and Accounting department to evaluate and negotiate contracts with customers Subsequently, the sales team finalizes the contracts based on the established formats for general agent contracts, agency contracts, or those designated for internal users.

The Sales department, along with the Finance and Accounting department, submits the agreement to the Director or Delegate, who then provides the contract to the counterparts for thorough review and finalization.

The signed agreement is transmitted to the functional divisions to be accomplished and fulfilled.

The Sales department is responsible for acquiring and executing signed contracts while managing the client list and ensuring compliance with state regulations, industry standards, and company protocols.

After getting the VAT invoice and dispatched note, the accountant set the Detailed Book.

Detailed Book From date 01/04/2015 to 30/04/2015 Account: 5111000 – Revenue for new products

Chevrolet CRUZE KL1J-JNE11/AA5-1 Chevrolet CRUZE KL1J-JNE11/CD5-1

Chevrolet Captiva 1LR26 WITH LE9 ENGINE

Chevrolet Spark Van Chevrolet CRUZE KL1J-JNE11/CD5-1

Chevrolet Captiva 1LR26 WITH LE9 ENGINE

Chevrolet CRUZE KL1J-JNE11/CD5-1 Chevrolet CRUZE KL1J-JNE11/AA5-1

Figure 3.11: Detailed book – Spare Parts

Detailed Book From date 01/04/2015 to 30/04/2015 Account: 5111000 – Revenue for new products

No Customer Name Discount amount Amount w/o VAT VAT Before discount Actual receipt

S-1556-1 28/04/15 3982 Dong Do Thanh Limited Company 2,380,569 12,894,812 1,289,481

- This book included … pages, form page … to …

(Sign, name ) Báo cáo thực tập tổng hợp

On a daily basis, according to the VAT invoices and dispatched notes, accountants establish the Journal Voucher, Registration of Journal Voucher and General Ledger.

No Detail Account Total Notes

In April 2015, journal vouchers reflected the compiled data of authorized vouchers linked to each sales transaction Based on these journal vouchers, the accountant created the Register of journal vouchers.

Figure 3.14: Register of journal voucher

At the same time, according to the information gathered from the journal voucher, detailed book and related documents we create the following general ledger:

GENERAL LEDGER (For Journal Voucher method)

Sales on account (for car) 131 15,907,200,000

Sales on account (for spare parts) 131 52,138,189

Accounting for cost of goods sold

Cost of Goods Sold (COGS), also referred to as "cost of sales," represents the direct expenses associated with producing goods for sale This includes the costs of raw materials, items purchased for resale, and parts used in product construction Understanding COGS is crucial for businesses as it directly impacts profitability and pricing strategies.

The cost of goods sold is determined using the average cost method, relying on documents such as the goods received note and goods dispatched note At the end of each month, bookkeepers calculate the cost of each item by considering the inventory levels and the quantity of goods purchased during the period.

Cost of goods sold = Number of units sold * Average monthly price.

Average monthly price = (Price of beginning inventory + price of goods purchased in the period)/ (Amount of beginning inventory + Amount of goods purchased in the period)

The beginning balance of tires in April 2015 is:

Tires: 536 units, price 650,000VND/unit

Arising amount in this period:

Using the formula, we have:

The average price of Tires = (529,200,000+ 536* 650,000) / (756+536) 679,257VND/unit

3.3.1.1 Applied accounts: o 632300 Cost of goods sold – adjustment o 156001 Finished goods – purchased vehicle – outside o 156002 Finished goods – purchased vehicle – allied o 156100 Spare part for sale

Accountants utilize stock issue notes to create journal entries, subsequently transferring this data to the general journal for recording the Cost of Goods Sold (COGS) ledger, while also maintaining an updated COGS subsidiary ledger.

At the end of month:

- Close COGS subsidiary ledger and use it as the basis for formulation of COGS summary report.

- Close COGS Ledger and compare it with data from the COGS summary report.

Account 632 - "Cost of goods sold" is opened to more than one level-down account to track cost of each specific type of goods.

This account is structured as follows:

Debit: Gather the cost of finished products, goods, services considered to be consumed in the period

Other items are included in cost of goods sold during the period

Credit: Cost of goods sold which is returned

The closing cost of goods sold during the period to account 911 –Income summary

The transaction will be recorded to the entry of the book of payment At the end of the month, when determining business outcomes, it will be transferred to Account 911.

Inventory refers to the goods acquired by retailers, wholesalers, and distributors with the intent to sell to customers The expenses associated with merchandise that has been purchased but remains unsold are recorded in the Inventory account.

Accounting document used are: Invoice, dispatched note.

Detailed Books used are: Subsidiary ledger for Cost of goods sold, Subsidiary ledger for Goods.

General Books used are: Journal Voucher, Registration of Journal Voucher, and General Ledgers of account 632, 156, etc.

3.3.2 Procedure of accounting for cost of goods sold

A GPSC staff member generates the goods dispatched note based on customer purchase orders, while storekeepers confirm the actual quantity of merchandise dispatched for delivery Subsequently, the accountant reconciles the goods dispatched note with VAT invoices to record the cost of goods sold and revenue in the appropriate documents In this process, the invoice serves as strong evidence for recognizing revenue, whereas the goods dispatched note acts as proof for recording the cost of goods sold.

Figure 3.16: The procedure for COGS

The accountant utilizes the VAT invoice, goods dispatched note, and related documents to input invoices into accounting software, which automatically updates the subsidiary ledger of Cost of Goods Sold (COGS) for each item and the General Ledger At the end of the accounting period, the accountant finalizes the detailed data in the COGS subsidiary ledger to accurately calculate the total cost of goods sold.

From the voucher generated, the accountant set the journal voucher, and then the registration of journal voucher, then the general ledger of accounts 632, 156, etc

Figure 3.17: Detailed book – Account 6321 (Tire)

DETAILED BOOK From date 01/04/2015 to 30/04/2015 Account 6321 – Cost of Gold Sold Unit: dong

Date Contra ct No Debit Credit

15 Closing cost of goods sold 911 1,031,938,0

Based on the inventory dispatched note, accountant makes journal voucher for cost of goods sold as follows:

Figure 3.18: Journal voucher – Account 632 (No 01)

No Detail Account Total Notes

At the end of the month, accountant sets the General Ledger for Cost of goods sold.

GENERAL LEDGER From 01/04/2014 to 30/01/2015 Account 632 – Cost of goods sold

Accounting for Selling Expense

Selling expenses in a commercial company serve as a key qualitative metric for assessing the effectiveness of business processes, particularly in the current economic landscape These expenses arise during the entire journey of goods, from initial receipt to final consumption.

Consumption expenses encompass costs associated with the use of goods, including wages and salaries, transportation, warehousing, delivery, and utilities such as electricity, water, and telephone services.

To determine the business results as well provided information timely for the corporate governance of the Board of Directors, the Accounting for selling expense is essential.

Selling expenses of GMV Company include:

• The cost of warehousing, transportation

• The cost of equipment, furniture, stationery

At the company, costs incurred in the process of consumption goods such as marketing costs, advertising, warranty, installation, office expenses and payroll

The comprehensive internship report for managers categorizes expenses into procurement costs, cost of sales, and management costs, utilizing account 641 for selling expenses This approach ensures a clear understanding of financial allocations and enhances effective management of selling expenses within the organization.

Debit: The costs incurred related to the sale of products, goods and services Credit: Closing selling expense to account 911 – income summary.

3.4.2 Procedure of accounting for selling expense

When sales-related expenses occur, accountants first classify them into vouchers and books, followed by chronological recording in the general ledger through journal vouchers Journal vouchers can be prepared periodically for each type of service, or on a weekly or monthly basis, aligned with the associated selling vouchers.

To manage selling expenses effectively, the company records monthly vouchers to prevent duplication The accountant is responsible for documenting these transactions in the journal voucher and general ledger associated with account 641.

According to the VAT Invoice and related documents, the accountant creates the detailed book.

DETAILED BOOK From date 01/04/2015 to 30/04/2015 Account 641 – Selling expense

Amount Date Contrac t No Debit Credit

In accordance with the VAT Invoice and related documents, the accountant set the Journal Voucher.

No Detail Account Total Note

At the end of the month, accountant sets the General Ledger for Selling expense.

GENERAL LEDGER From 01/01/2014 to 31/01/2014 Account 641 – Selling expense

SOME RECOMMENDATION FOR ACCOUTING FOR SALES

Advantages of the General Management and Accounting Management at

at General Motors Vietnam Company

After more than 25 years of development, GMV has some significant achievements in its operating field, specifically achieved positive results in terms of profit and reputation created in the marketplace

After have certain results in the field of activity of the company, specifically achieved positive results in terms of profit and reputation created in the marketplace.

To achieve the good results, the administrative department should have built an effective and independent system as follows:

Building environmental factors in workplace

- The director has an ethics behavior and good performance as the exemplary for staff to follow

-The company has a unified system documents to regulate the recruitment, training, employee evaluation, promotion, payrolls and allowances to encourage people to work with integrity and efficiency.

-The company has used the job description specified quality requirements and knowledge of employees for each position in the organization

Company employees regularly circulated staffs in the sensitive positions, concern to protect the profit of the people working in the company.

Rights, responsibilities and obligations in three areas: licensing and approval of financial matters, accounting and inventory procedures are clearly demarcated

The company issued the text specifies who has the right and is authorized to wholly or partly finance certain issues

The Company has some measures to prevent senior leaders use funds or assets for personal purposes.

The company held the voucher system, using the right accounting system and forms issued by the Finance Ministry The system of company accounts reflect all economic transactions arising.

Computers play a crucial role in accounting, which can lead to various technical issues To mitigate these problems, it is essential to implement effective prevention and control measures.

- The accounting staffs must follow the process and the instruction: in order to prevent the computers from virus, if unnecessary, connecting USB and disk are not permitted

- The accounting staffs also need to be trained to have a professional knowledge about computers and informatics to handle common issues in computers.

To optimize business performance, companies must develop training programs to enhance the skills of their accounting staff Strategic planning of human resource allocation is essential, tailored to the company's specific business circumstances Furthermore, implementing work specialization within the accounting department can significantly boost overall effectiveness and improve business outcomes.

Supervisor: Tran Manh Dung, PhD, CPA Le Hong Van – Advanced

The company needs to develop internal audit system to monitor timely, difficult to assess the contribution of each component in the achievement of the company

Assessment of Accounting Organization for Sales

In December 2015, an analysis of the accounting practices at General Motors Vietnam revealed a well-organized accounting system, staffed by qualified professionals who stay updated on state financial regulations and exhibit flexibility in their practices The sales accounting process is continuously enhanced to adequately reflect and address the growing management demands, facilitating the timely identification and exploitation of the company's potential while reinforcing the accounting framework However, the study also identified several advantages and disadvantages that necessitate further improvements in the sales accounting practices at GMV Company.

+ The Company applies Accounting Journal Voucher method which is well- suited to the characteristics of oil trading company.

+ The Company has Sales Department that directly responsible for implementing the sales process as well as has qualified accounting tracking sales activities.

Effective sales accounting is structured to support senior management's needs, featuring a clear division of tasks that enhances oversight This organization allows for transparent evaluation of each business segment, enabling senior managers to make informed and accurate decisions.

The company adheres strictly to state policies and financial accounting regulations, ensuring that accountants maintain accurate and comprehensive ledgers that reflect the sales situation To enhance accounting management, the company has invested in a modern computer system, supported by SAP software, which facilitates up-to-date bookkeeping and other accounting functions.

Although the system is pretty tight managed, accounting department and especially for sales accounting also exists some problems to consider and correct.

I hereby list three main weaknesses of the accounting for sales in GMV company as below:

First of all, the company currently maintain a question that how to make sure that all invoices are posted in SAP?

The timely processing of vouchers is hindered by a lack of proficiency in computer skills among the new accountant responsible for revenue recognition, leading to delays in communication between staff and storekeepers Additionally, the accounting software system has experienced data loss due to viruses, further complicating the situation Consequently, software errors result in significant delays within the accounting department's workflow.

GMV is currently facing challenges with timely invoice posting for car sales, as the sales department initially retains both copies of the invoices This often leads to accountants needing to repeatedly request the return of these invoices from sales representatives.

Recommendations to Improve Accounting for Sales .57 REFERENCES 60Báo cáo thực tập tổng hợp

About making sure of all invoices are posted:

An effective invoice control system is essential for companies to categorize invoices accurately, distinguishing between posted and unposted invoices, as well as cancelled ones This classification helps prevent the duplication of posted documents, ensuring efficient financial management and accuracy in accounting processes.

About on – time update between staffs:

- The accounting department should create some straining courses about SAP and computer skills for all related newbies

To improve document management and ensure accurate posting, the chief accountant should instruct sales representatives to retain only the red copy of the invoice This practice allows the billing and accounts receivable accountants to maintain the remaining copies, thereby streamlining the invoicing process for car sales.

The company should take into account trade discount policy With the use of policy, the company may have more customers, as consequence, sales revenue will increase significantly.

When using commercial discounts, the accountant uses account 521 to record the transaction.

Debit: Trade discounts accepted to pay for customers

Credit: At the end of the accounting period, accountant post the account 521 trade discount to account 511 to determine the revenue.

Before implementing a trade discount policy, a company must clearly define it for a specific commercial sector Additionally, it is essential to utilize an allowance policy to support this strategy effectively.

The company should have a reconcilable committee, to control debt recovery plan reasonable and timely.

In the wake of the current crisis, businesses face the challenging task of maintaining and strengthening their market position for effective integration and economic recovery To survive, companies must operate efficiently, balancing revenues and expenditures to ensure profitability while continuously enhancing their business performance This necessitates a sound sales policy and ongoing improvements in the quality of goods and services Accountants play a crucial role in this strategy, serving as vital management tools that provide essential information for informed decision-making Therefore, establishing a well-organized accounting system, particularly for sales accounting and income summarization, is critical for the survival and growth of enterprises.

Optimizing the accounting process for sales and income summaries within a business enhances overall financial management, reduces unnecessary expenses, and ensures the delivery of accurate and timely accounting reports.

In an effort to enhance sales activities, extensive research was conducted to understand the operations at General Motors Vietnam Company, guided by the dedicated support of PhD Tran Manh Dung, CPA, in completing the thesis on "Improving Accounting for Sales."

Due to limited time for practice and constraints in practical knowledge, the issues addressed in this thesis lack a high level of generality, resulting in an imperfect and incomplete resolution I welcome feedback from teachers and staff at General Motors Vietnam Company to enhance my work further.

Tiêu đề	Accounting For Sales At General Motors Vietnam Company
Tác giả	Le Hong Van
Người hướng dẫn	Tran Manh Dung, PhD, CPA
Trường học	National Economics University
Chuyên ngành	Accounting
Thể loại	Bachelor’s Thesis

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