Accounting for sales at general motors vietnam company

INTRODUCTION

The Rationale of the Thesis

Since the Vietnamese government adopted an open-door policy to attract foreign direct investment, global companies face both opportunities and challenges in this emerging market While Vietnam offers cheaper manufacturing resources, including labor and raw materials, international corporations must navigate fierce competition from both local SMEs and other global firms, which necessitates effective strategies to attract customers In Vietnam's automobile market, where middle-class consumers are well-informed about financial and product quality, the success of companies hinges on strong relationships both internally and externally Consequently, every interaction is crucial, and businesses strive to demonstrate the quality of their goods and services, ensuring transparency in their financial statements to build trust with consumers.

Sales, defined beyond the simple exchange of goods for money, is now a crucial aspect of business, facilitating social reproduction and meeting consumer demand, which aids manufacturers in planning production and consumption For business owners, increased sales correlate with higher capital turnover and profits, contributing to improved living standards for employees In today's global economy, effective accounting practices, particularly in sales accounting, are essential for organizations to assess their financial health comprehensively However, many companies use sales accounting primarily for tax purposes, neglecting the analysis of sales factors, which limits the effectiveness of the data Research into sales activity indicators can enhance companies' understanding of their sales performance and provide valuable insights for business leaders to evaluate the 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 the benefits and drawbacks associated with it Ultimately, the findings and recommendations presented will seek to address and resolve some of the challenges GMV is currently encountering.

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 research initially utilized readily available secondary data, drawing from both internal and external sources Internal sources included company documents such as 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 during my internship.

Invoice requests Invoices Z-options Financial statements

Legal documents Newspapers Internet Ohers

The internship report highlights the valuable opportunities to gain insights by observing the roles of sales accountants and the accounting computer systems in use Additionally, I conducted both direct and indirect interviews through various methods, including emails, telephone calls, and online platforms.

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 emphasizes three key aspects of sales accounting: Sales Revenue accounting, Costs of Goods Sold accounting, and Selling Expense accounting.

THEORETICAL FRAMEWORK OF ACCOUNTING FOR SALES

The Nature of Selling Goods

The process of doing business encompasses two key dimensions: buying and selling Selling involves not only the exchange of money for products or services but also encompasses a variety of activities aimed at enhancing customer relationships, such as identifying potential clients, shaping demand, providing goods, and fostering customer loyalty The definition of "sales" can vary based on context, but it generally refers to the revenue generated from selling products or services, known as net sales Ultimately, sales can be defined as a transaction where money or value is exchanged for ownership of a good or the right to a service.

A contract for the promise to purchase products at a specified future time is fundamental to sales in marketing and advertising Four essential elements define a valid sale: first, both the seller and buyer must possess the competence to enter into a contract; second, there must be a mutual agreement on the terms of exchange; third, the items involved must include products, ownership titles, or specific services that can be transferred; and finally, consideration in the form of money or a cash equivalent must be paid or promised.

Direct selling involves delivering products and services directly to consumers from the company's warehouse or factory, bypassing traditional retail channels In this model, companies receive payment from buyers at the point of sale, confirming the transaction and recognizing the completion of the sales process.

The sale method involving shipment to customers entails the seller delivering goods as per the terms outlined in signed contracts, with the seller maintaining control over the shipped quantity Upon payment or acceptance of payment, all associated benefits and risks transfer to the buyer In practice, GMV primarily utilizes a wholesale approach combined with customer shipments, specifically targeting dealers Wholesaling involves distributing 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 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 by their staff 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 reimburses 70% of the Cost of Goods Sold (COGS) from the client's payment, enabling the bank to release the original documents and deliver them to the customer.

30% Dow n Pay ment Send backoriginal document

The comprehensive internship report on bank customers highlights a mutually beneficial process involving three parties: the bank, GMV, and car dealers The bank assumes a 70% risk on down payments, fostering partnerships with GMV's dealers, who are incentivized to collaborate by only prepaying 30% of the car's value This arrangement enhances GMV's cash flow management while also allowing them to supply spare parts to dealers for customer warranties Each purchase order from dealers is regulated by an S-slip from the AS department, which the billing accountant uses to generate invoices for spare parts.

Consigned goods remain under the ownership of the enterprise until they are officially consumed, resembling a sales model based on shipment 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 sales allow businesses to collect revenue over multiple transactions Customers make an initial payment at the time of purchase, agreeing to pay the remaining balance in future installments, often with an associated 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 revenue recognition process is completed only when these products are sold to customers, marking the end of the goods consumption cycle.

Accounting for Sales

2.2.1 The Responsibilities of Accounting for Sales

Sales activities are crucial for minimizing product loss and identifying slow-moving items This allows businesses to implement effective strategies to boost product demand Insights from sales accounting enable companies to gain a comprehensive understanding of their operations, helping managers identify shortcomings and imbalances in purchases, sales, and inventory to take timely and accurate corrective actions.

Financial statements offer crucial insights into an organization's business and financial health, enabling internal stakeholders to understand its current status This information assists managers in fulfilling their management roles and monitoring the broader economic landscape Additionally, the executive board can analyze these results for informed decision-making.

The comprehensive 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, reserving, and selling goods, enabling informed decisions regarding investments, loans, and 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 during a specific period from its regular business activities, leading to an increase in equity, excluding any contributions from equity participants.

In accounting, amounts received from customers are recorded as "Sales" or "Net Sales" on the Profit and Loss (P/L) account, with sales recognized only upon the delivery of products For financial analysis, "sales" refers specifically to net sales rather than gross sales, encompassing transactions that occur during professional selling or marketing efforts Traditionally, service expenditures are documented separately from merchandise sales, yet 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 Sales revenue represents the total economic benefits generated by a business and should not be offset against expenses This revenue arises from the business's past activities Income from non-core operations is categorized as gains rather than sales revenue For example, a company primarily selling automobiles recognizes income from vehicle sales as sales revenue, while income from selling scarves produced through manufacturing is classified as a gain.

The report highlights that equity increases during the accounting period, excluding those resulting from shareholder contributions Sales revenue must stem from an increase in the company's net assets; however, net assets can also grow through additional capital investments by owners, which should not be classified as sales revenue.

Companies implement various voucher systems and rotation processes tailored to their sales methods Vouchers and associated documents, including sales invoices (VAT invoices), delivery notes, payment notes, and dispatch notes, capture essential data on sales revenue, consumption tax, and sales deductions 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

The double-entry bookkeeping method requires companies to record sales by debiting cash or accounts receivable and crediting the sales account, reflecting the actual transaction value after discounts and taxes, rather than the list price While revenues primarily arise from the sale of goods and services, businesses may also generate income through interest, dividends, or royalties from other organizations According to Circular 200/2014/TT-BTC, the journalization process for sales is outlined as follows:

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

When dealing with products, goods, and investment properties subject to various taxes such as 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, must be clearly separated, particularly when using the subtraction method for accounting purposes.

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 record the relevant accounts accurately For products and goods, as well as 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 It is crucial to separate indirect taxes payable, specifically VAT, using the subtraction method for clarity in financial reporting.

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; it is typically recognized when the seller transfers the risks and rewards of the asset to the buyer, which usually happens upon delivery Importantly, the receipt of payment is not directly tied to the sale's accounting, as income is recorded on an accrual basis.

The Income Statement begins with the Revenues section, followed by the Expenditures segment, to effectively assess Net Income, which is calculated as Revenues minus Expenses This structure highlights the actual monetary value of transactions, allowing accountants to account for discounts from the list price when applicable.

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 for the accounting period This includes trade discounts, discounted sales, and sales returns, providing a comprehensive view of the reductions in revenue.

Accountants are tasked with meticulously tracking trade discounts, sales discounts, and sales returns for each customer and product type, including both goods 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 identify and record monthly selling expenses in the general journal and subsidiary ledger They then transfer these entries from the general journal into the ledger, ensuring accurate tracking of selling expenses.

THE CURRENT SITUATIONS OF ACCOUNTING FOR SALES

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, it rebranded to its current name in July 2011 The company 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 operations involve the flow and distribution of products within the marketplace, encompassing the movement of goods from producers to final consumers These operations typically exhibit several key characteristics.

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

The SM department facilitates the process of sending a car's original documents to the bank as collateral for a mortgage When a customer purchases a vehicle, the dealer uses 70% of the car's Cost of Goods Sold (COGS) from the payment received to allow the bank to redeem the original documents, which are then delivered to the customer This arrangement benefits all three parties involved: the bank assumes the risk of the 70% down payment to GMV while gaining customers through GMV’s dealers, who are motivated to collaborate with the bank by holding the invoice and car certificates As a result, dealers become more active with only a prepayment requirement.

30% Do wn Pay men Send backoriginal document

GMV enhances cash flow management by leveraging a method that accounts for 30% of the car's value In addition to vehicle sales, GMV supplies spare parts to dealers for warranty services offered to customers Each purchase order from dealers is regulated by an S-slip generated by the AS department, which the billing accountant uses to issue invoices for spare parts.

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 activities within a company and is responsible for assignments presented to the Board of Directors As the legal representative of the corporation, the Chief Director plays a crucial role in ensuring compliance and effective management.

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 sales process that aligns with the nature of its products and connects effectively with potential customers Certain products require direct, confrontational communication between sales team members and dealers to secure a sale, while others are efficiently sold through telephone orders.

The primary responsibility of a sales executive extends beyond merely selling; it involves coordinating the sales team's efforts to ensure optimal efficiency in managing customer orders The ultimate goal is to achieve the highest sales volume while minimizing operational costs.

Salespeople are responsible for promoting and selling products and services for their company They need to possess a unique perspective, along with the skills and desire to enhance their creativity, while also receiving guidance and support from their peers and supervisors.

The department assists the Chief Director in managing workforce needs, ensuring that laborers meet professional standards They are responsible for developing strategies to enhance workforce quality, maintaining employee health and safety, and ensuring salaries comply with government regulations Additionally, they create salary lists for various transfer flows, assess pay rates for ship repairs, and calculate annual salaries for employees.

This article emphasizes the importance of documenting and organizing manufacturing activities in alignment with government policies It advocates for the Chief Director to adopt precise recommendations that adhere to current financial accounting standards Additionally, it highlights the necessity of regularly providing insights into the financial position, capital resources, and the efficiency of capital resource expenditures for 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 This includes the preparation and submission of financial reports, tax returns, and final settlements, along with providing necessary information as required by regulations.

Figure 3.3: Diagram of accounting department’s structure

The accounting system of the enterprise is structured according to the Circular 200/2014/TT-BTC, issued on December 22, reflecting the business's characteristics and the degree of delegation in financial-economic management.

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 control over the goods, the turnover is determined with certainty, the enterprise will gain economic benefits from the transaction, and the costs associated with the sale can be identified The sales procedure involves transferring ownership of goods to the customer, who is then obligated to make payment as per the original agreement Once payment is accepted, ownership is officially transferred, 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 This article highlights examples of Vietnamese standard accounts associated with operational activities, along with their corresponding lower-level 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 as communicated by SM staff The billing accountant then generates a VAT invoice that includes essential 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 visit GMV dealers for car warranty services, the dealers must reach out to the AS department to order necessary spare parts The billing process for these spare parts follows the same protocol as sales, with each invoice accompanied by an S-slip that details the items sold to the dealers Additionally, each spare part invoice reflects a discount rate of 18% specifically 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 information like the issue date, customer details, and cash receipt amount, along with specific elements such as 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 submitted 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 payments, 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

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

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 customer contracts Subsequently, the sales team finalizes the agreements, adhering to the established formats for general agent contracts, agency contracts, or contracts designated for internal users.

The Sales department, along with the Finance and Accounting department, presents the agreement to the Director or Delegate, who then oversees the distribution of the contract to the relevant parties for thorough review and completion.

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 in 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, the journal vouchers reflected the consolidated data of authorized vouchers associated with 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

30/04 511-04 28/04 Sales on account (for spare parts)

Accounting for cost of goods sold

Cost of Goods Sold (COGS), also referred to as "cost of sales," represents the total expenses incurred for raw materials and direct production costs associated with creating a product for sale.

The comprehensive internship report may include the expenses associated with items acquired for resale, the costs of raw materials utilized in product manufacturing, or the expenditures related to components employed in product assembly.

The cost of goods sold is determined using the average cost method, which relies on the goods received and dispatched notes 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 Simultaneously, they also maintain a COGS subsidiary ledger to ensure accurate financial tracking.

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 intention of selling them to customers The cost of merchandise that has been purchased but remains unsold is 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 verify 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

Based on the VAT invoice, goods dispatched notes, and related documents, the accountant inputs invoices into accounting software, which automatically transfers detailed data to the subsidiary ledger of Cost of Goods Sold (COGS) and the General Ledger At the end of the accounting period, the accountant finalizes the detailed data in the subsidiary ledger of COGS to accurately calculate the cost of goods sold for that period.

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 critical qualitative measure for assessing the effectiveness of business processes, particularly in the current economic landscape These expenses arise throughout the journey of goods, starting from their initial receipt to the point of consumption.

Consumption expenses encompass costs associated with the utilization 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, with the company utilizing account 641 for selling expenses.

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 are incurred, accountants first classify them into vouchers and books, followed by chronological recording in the general ledger through journal vouchers Journal vouchers can be elaborated periodically—once for each type of service or on a weekly or monthly basis—according to 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 updating the 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:

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

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 Therefore, implementing effective measures to prevent and manage these potential problems is essential.

- 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 outcomes, companies must implement training programs to enhance the skills of their accounting staff Effective human resource management should align with the company's current business situation, ensuring that resources are utilized efficiently Furthermore, specializing tasks within the accounting department can significantly boost overall effectiveness and improve specific business results.

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, with qualified accountants who stay updated on state financial regulations and demonstrate flexibility in their operations The sales accounting process is continually refined to accurately reflect the company's performance and meet the growing demands of management, enabling timely identification and utilization of the company's potential However, the study also identified several advantages and disadvantages in the sales accounting practices that necessitate further improvements.

+ 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 accounting tasks This organization enhances management efficiency by enabling transparent evaluation of each business segment, ultimately aiding senior leaders in making more 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 implemented a modern computer system, supported by SAP software, which facilitates up-to-date bookkeeping and other accounting tasks.

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?

Vouchers are not updated promptly among staff and storekeepers due to the new accountant's lack of professional computer skills in revenue recognition Additionally, the accounting software system has experienced data loss from viruses, leading to further delays in the department's workflow when software errors occur.

GMV is currently encountering challenges with timely invoice postings for car sales, as the sales department retains two copies for record-keeping This often necessitates accountants to repeatedly request the return of invoices from sales representatives.

Recommendations to Improve Accounting for Sales

About making sure of all invoices are posted:

To effectively manage finances, a company must implement an invoice control system that categorizes invoices into distinct groups, including posted, not posted, and cancelled invoices This classification helps prevent the duplication of posted documents, ensuring accurate financial records and streamlined operations.

About on – time update between staffs:

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

To streamline the invoicing process and improve document management, the chief accountant should instruct sales representatives to retain only the red copy of the invoice This practice ensures that the billing and accounts receivable accountants have access to the necessary invoices for cars, facilitating more efficient posting and record-keeping.

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, companies must clearly define it for a specific commercial sector Additionally, it is essential to utilize an allowance policy to support this strategy.

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 positions for effective integration and economic recovery To survive, companies must operate efficiently, balancing revenues and expenditures to ensure profitability while enhancing their overall business efficiency This necessitates a well-defined sales policy and a continuous commitment to improving the quality of goods and services In this context, accountants play a crucial role, serving as vital management tools that provide essential information for informed decision-making Therefore, establishing a sound accounting system, particularly for sales accounting and income summaries, is critical for the survival and growth of enterprises.

Enhancing the accounting process for sales and income summaries within a business not only streamlines financial operations but also reduces unnecessary expenses, ensuring that accounting reports are both accurate and timely.

In an effort to enhance sales activities, extensive research was conducted to understand the company's operations, guided by the dedicated support of the Accounting department, especially from PhD Tran Manh Dung, CPA This collaboration culminated in the thesis titled "Improving Accounting for Sales at General Motors Vietnam Company."

Due to time constraints and limited practical knowledge, the issues addressed in my thesis lack a high level of generality, and the solutions presented are not entirely comprehensive, leading to inevitable mistakes I welcome feedback from both my teachers and the 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
Trường học	National Economics University
Chuyên ngành	Accounting
Thể loại	Bachelor’s thesis
Năm xuất bản	2016
Thành phố	Hà Nội

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