Accounting for revenue, expenses and determinaton of business results at dkd vietnam trading and service joint stock company”

Another way to define costs: Costs are the costs of resources for abusiness to achieve one or more specific goals.Types of expenses are reflected in the income statement: Trang 12 - Cos

MINISTRY OF FINANCE ACEDAMY OF FINANCE

“ACCOUNTING FOR REVENUE, EXPENSES AND

DETERMINATON OF BUSINESS RESULTS AT DKD VIETNAM TRADING AND SERVICE JOINT STOCK COMPANY”

Major: Corporate Accounting Code: 21

Mentor: PhD Thai Ba Cong MAc Nguyen Ba Linh

Hanoi – 2023

I hereby declare that this thesis is my own work and effort and that hasnot been submitted anywhere for any award Where other sources ofinformation have been used, they have been acknowledged

The data and results described in the thesis are derived from the actualsituation of the practice company

Thesis: “Accounting for revenue, expenses and determination ofbusiness results at DKD Vietnam Trading and Service Joint Stock Company”

Student

Nguyen Thanh Huong

LIST OF ABBREVIATIONS

LIST OF TABLE

LIST OF FLOWCHART

LIST OF SCREEN

1 Urgency of the topic

The emergence and development of accounting is associated with thedevelopment of the social economy As society develops, accounting becomesmore and more important and becomes an indispensable tool in state andenterprise economic management Enterprises want to survive, they mustmaximize profits, save costs, and improve business efficiency in the currentcontext Therefore, accounting for revenue, expenses and business resultsplays an important role for managers when deciding on the existence of thecompany in today's economy Based on business results, managers makeshort-term and long-term decisions for the company On the other hand, byaccounting for revenue, expenses and business results, it is also possible todetermine the tax liability to be paid to the state In fact, each enterprise hasits own production and business characteristics, so the accounting andmanagement of revenue, expenses, and business results are different, so thebusiness results are different

Internship at DKD Vietnam Trading and Service Joint Stock Company is anopportunity for me to approach the reality of accounting, especially revenueand cost accounting and determine business results With the guidance anddedicated guidance of lecturers Thai Ba Cong and Nguyen Ba Linh, theaccountants of the Finance - Accounting department of the company havegrasped specific knowledge about the company and accounting work in thecompany company Realizing the importance of accounting for revenue andexpenses and determining business results, after an internship at the company,

I decided to choose a research topic to write my final thesis: "Planning"

Calculating revenue, expenses and determining business results at DKDVietnam Trading and Service Joint Stock Company."

3 Object and scope of research

- Research object: The topic focuses on researching theoretical and practicalissues of revenue accounting and determining business results at DKDVietnam Trading and Service Joint Stock Company

- Research scope: Accounting for revenue, expenses and determination ofbusiness results at DKD Vietnam Trading and Service Joint Stock Company

- Research method: Document study combined with investigative interview:The purpose of the research interview is to collect primary information onrevenue accounting and determine business results at Vietnam DKD Tradesand Services joint stock company The subjects interviewed and surveyedwere chief accountants and in charge of accounting The process is acombination of collecting actual documents with direct observation andinterview methods….

5 Main structure of the thesis

This report is divided into three chapters to further present my understanding

of the company in general and the accounting system in particular:

Chapter I: Basic theoretical issues of accouting for revenue, expenses anddetermination of business results in enterprises

Chapter II: Actual situation of accouting for revenue and expenses accountingand determination of business results at DKD Vietnam Trading and ServiceJoint Stock Company

Chapter III: Some solutions to improve accounting for revenue, expenses anddetermination of business results at DKD Vietnam Trading and Service JointStock Company

As a student approaching the reality of accounting for the first time, my thesisinevitably has shortcomings due to its general nature and limited time I lookforward to receiving the help, evaluation and suggestions from the leaders,staff of the accounting department of DKD Vietnam Trading and ServiceJoint Stock Company, the teachers in the Academy of Finance, especially are

two lecturers Dr Thai Ba Cong and MSc Nguyen Ba Linh so that I can finish

my thesis

Thank you sincerely!

CHAPTER I: BASIC THEORETICAL ISSUES OF ACCOUNTING FOR REVENUE, EXPENSES AND DETERMINATION OF BUSINESS

RESULTS IN ENTERPRISES 1.1 Concepts and tasks of revenue accounting and determining business results of an enterprise.

1.1.1 The concept of revenue, expenses, business results and the role of

accounting sales and results determine business.

Revenue plays a vital role in the existence and development of theenterprise itself and the general development of the entire economy,especially the market economy In order to achieve higher and higher profits,enterprises must develop their business plan, which must fully and accuratelycalculate the costs and results achieved The organization of revenueaccounting and determination of business results is an essential tool ineffectively managing and operating business activities in the business process

Definition of Revenue

According to Vietnamese accounting standard No 14 (VAS14 Revenue and other income) issued under Decision No 149/2001/QD-BTCdated December 31, 2001 of the Ministry of Finance stipulates: “Revenue isthe total the value of the business's ordinary business contributing to anincrease in equity" or provision of services to customers

-Pursuant to Article 56 of Circular 133/2016/TT-BTC on revenueaccounting principles has the following definition:

Revenue is the economic benefit obtained that increases the owner'sequity of the enterprise minus the additional capital contributed byshareholders The time to recognize revenue is at the time when thetransaction occurs, when it is certain that economic benefits will be received,determined at the fair value of the amounts entitled to receive, regardless ofwhether money has been collected or will be received money

Revenue and the cost of generating such revenue must be recognizedsimultaneously on the matching principle However, in some cases, thematching principle may conflict with the prudential principle in accounting,

so the accountant must base on the nature of the transaction to reflect honestlyand reasonably

Definition of Expenses

Expenses are the total value of items that reduce economic benefits inthe accounting period in the form of cash outflows, deductions from assets orliabilities resulting in a decrease in equity, excluding distributions

Another way to define costs: Costs are the costs of resources for abusiness to achieve one or more specific goals

Types of expenses are reflected in the income statement:

- Cost of goods sold: is the actual ex-warehousing value of products orgoods or the actual cost of services completed and determined to be sold andother directly related costs incurred cost of goods sold to determine businessresults in the period

- Cost of sales: is the total of actual costs incurred in the process ofselling products, goods, and providing services, including all processes ofselling products, goods, and providing services , including all costs ofoffering, introducing products, advertising products, sales commissions,warranty costs for products and goods (except for construction andinstallation activities), costs of preservation, packaging, transport,…

- Enterprise administration expenses: are all general managementexpenses of the enterprise, including the costs of salaries of employees of theenterprise management department (salaries, wages, allowances, ), socialinsurance, health insurance, union dues, unemployment insurance formanagement staff, cost of office materials, labor tools, depreciation of fixedassets used for business management, money land rent, license tax, provisionfor doubtful debts, outsourced services (electricity, water, telephone, fire,explosion, ), other monetary expenses (reception, customer conference, )

- Corporate income tax expense: is a direct tax, collected based on thefinal results of production and business activities of organizations andenterprises Consists of:

 Current corporate income tax expense is the amount of corporateincome tax payable based on taxable income for the year and thecurrent corporate tax rate

 Deferred income tax expense: is the amount of CIT payable in thefuture arising from the recognition of the deferred income tax payable

in the year when the deferred tax asset is recognised from previousyears

- In addition, there are financial costs (interest costs), and other expenses

The concept of business results:

According to Circular 133/2016/TT/BTC issued on August 26, 2016 ofthe Ministry of Finance, business results of enterprises include production andbusiness results, financial results and other performance results.

Production and business results: The difference between net revenue andcost of goods sold (including products, goods, investment properties andservices, production costs of construction products and installations) ,expenses related to investment real estate business activities, such as:depreciation expenses, repair and upgrade costs, operating lease expenses,liquidation expenses, transfer of investment properties ), selling andadministrative expenses

Financial performance: The difference between the income of financialactivities and the cost of financial activities

Other income: The difference between other income and other expensesand corporate income tax expense

Formula for determining business results:

-Cost ofgoodssold

-Businessadministrationexpenses

-Sales deductions(Trade discounts, salesreturns, Sales discounts)

-Cost offinancialactivities

Other operating results are results calculated as the difference between other net income and other expenses:

 The role of sales accounting and detamination of business results

In today's market economy, the issue that businesses are alwaysinterested in is how to operate their business most efficiently (maximizingprofits and minimizing risks) And revenue is an important economicindicator, showing the results that the enterprise has achieved in the process

of production and business activities Revenue plays a very important role notonly for the existence and development of enterprises themselves but also forthe general development of the whole economy, especially the marketeconomy

Revenue is an important source of income for businesses to offset costs,cover the capital spent to pay salaries for employees, input costs for goodsand services, and obligations of the enterprise with the State…

- Revenue ensures enterprises can reproduce and do business, expandproduction scale.

- Revenue is also an important source of finance for enterprises tocontribute capital, join joint ventures with other units, invest in subsidiaries

- Besides, revenue is also an economic lever that encourages employeesand economic units to work hard, improving production and businessefficiency

In order to achieve higher and higher revenue, businesses need to buildtheir own business plans, know which products to trade, which products toexpand, which products to limit in order to achieve high results fully andaccurately calculate the costs and results achieved Thus, the accountingsystem in general and accounting for revenue and expenses and determiningbusiness results in particular is an important tool in effective management andoperation of enterprises' activities in the business process

1.1.2 The responsible of accouting for revenue, expenses and determining business results in the enterprise

To really promote the role of accounting as economic management inenterprises, accounting for revenue and expenses and determining businessresults must perform the following tasks:

- Prepare accounting vouchers to record arising economic transactions,open general accounting books, detailed accounting books to reflect thesituation of quantity of goods and services consumed, supplied, recorded.revenue from sales and service provision and other related indicators

- Follow up and timely payment of debts with suppliers and customers

- Strictly manage the fluctuation of goods and services.

- Accurately reflect and calculate the results of each production andbusiness activity, supervise the performance of obligations to the State byenterprises

- Provide accounting information for the preparation of financialstatements and periodic analysis of business activities related to revenue,expenses and determination of business results

1.2 General theory of accounting for revenue, expenses and determination of business results.

1.2.1 Sales revenue and revenue deductions.

1.2.1.1 Conditions and principles of revenue recognition

Conditions for revenue recognition

According to Currency 133 – 2016 - Art 57 Account 511 – Revenue of salesand service provision: when the following conditions are simultaneouslysatisfied, revenue is allowed to be recognized in the period:

 The enterprise has transferred substantially all the risks and rewards ofownership of the product or goods to the buyer

 The enterprise no longer holds the right to manage the goods as theowner of the goods or the right to control the goods

 The revenue can be measured reliably

 Identify costs related to sales transactions

 The business has received or will receive economic benefits from thesale transaction

Time to determine revenue

 For the direct consumption method, the consumption process isconsidered to end when the goods have been handed over to thecustomer and the seller loses ownership of these goods.

 For the form of sale and delivery of goods under a contract, these goodsare still under the ownership of the enterprise When the buyer pays oraccepts payment for the delivered goods (in whole or in part), the newgoods are considered to be consumed, and new revenue is recognized

 In case of delivery of goods to agents or consignments, since theconsigned goods are still under the ownership of the business, onlywhen the agent announces the sale of goods or pays for the goods, thegoods shall be considered sold and recognized as revenue

Principles of revenue determination:

 For enterprises paying VAT by credit method Revenue from sellinggoods and providing services is the selling price excluding VAT

 For enterprises that are not subject to VAT or pay VAT by the directmethod Revenue from selling goods and providing services is the totalpayment price

 For goods and services subject to excise tax or export tax, the revenuefrom selling goods and providing services is the total price paid(including excise tax or export tax)

 Enterprises that process materials and goods will only reflect inrevenue from selling goods and providing services the actualprocessing amount they are entitled to, excluding the value of materialsand goods received for processing

 For goods sold by agents or consigned by the method of selling at theright price and enjoying commissions, the revenue from sales and

service provision shall be recorded as part of the sales commission thatthe enterprise is entitled to.

 In case of sale of goods by method of deferred payment or installmentpayment, the enterprise shall record sales revenue at the immediateselling price and record in the financial income the profit on thepayable but deferred payment as appropriate with the time whenrevenue is confirmed

1.2.1.2 The revenue deductions

Sales deductions are items that are deducted from sales and serviceprovision arising in the period, including:

- Trade discount: When buying goods in large quantities or buying toachieve a certain amount of sales, the buyer is entitled to a discountcompared to the listed price and is clearly specified in the contract

- Sales returns: Sold goods are returned in case the enterprise providesgoods with the wrong specifications, quality, size… compared to theeconomic contract

- Sales allowance: When the business's goods are almost out of date, thebusiness wants to consume all of its inventory The company conducts

a reduction in the selling price

1.2.1.3 Accounting vouchers and accounts used

Accounting vouchers:

- Value-added invoice (form 01 - VAT – 3LL)

- General sales invoice (form 02 – VAT – 3LL)

- Payment documents (receipt slip, credit note, payment order …)

- Other relevant accounting documents (Returned warehouse receipt, )

Accounts used:

- Account 511 – Revenue from sales and service provision

- Account 3331 – Value added tax payable

- Other accounts such as Account 111, 112, 131, 911

1.2.1.4 Economic transactions mainly on revenue accounting and

revenue deduction

The order of accounting for a number of major transactions on sales andservice provision is described in flowchart 1.1

There are 2 cases of calculating sales revenue:

1 Enterprises that immediately separate indirect tax (VAT, excise tax,import and export tax, ) will record revenue but not tax

2 Enterprises that have not separated indirect tax from sales revenue shallrecord taxable revenue

The order of accounting for revenue from sales and service provision incase the enterprise calculates VAT by the deduction method

Flowchart 1.1: Chart of accounting for sales and service provision

and deductions for revenue

1.2.2 Accounting for revenue from financial activities and other income 1.2.2.1 Financial income

According to VAS 01, “Revenue and other income is the total value of economic benefits of an enterprise in the accounting period, arising from normal production and business activities and other activities of the enterprise enterprise, contributing to an increase in equity, excluding the capital of shareholders or owners”.

Thus, revenue from providing services, revenue from financial activities is thevalue of economic benefits that an enterprise receives in an accounting period,and this economic benefit is obtained from financial activities of theenterprise

- Account 515: Financial income

- Account 911: Determine business results

- Receipt of liquidation of fixed assets, sale of fixed assets

- Collect fines from customers for breach of contract

- Collect indemnified insurance

- Receivables receivables are written off from the previous period'sexpenses

- Debts that are now not payable are recorded as income

- Collect reduced, refundable taxes

- Other revenues

b Vouchers use:

- Bill of sale

- Receipts

- Certificate of credit from the bank

- Minutes of liquidation and sale of assets

c User account and accounting order:

- User account: Account 711

Flowchart 1.3 Other income accounting procedures

1.2.3 Accounting for costs of goods sold

1.2.3.1 Cost of goods sold

 Definition

In an enterprise, cost of goods sold is commonly determined as follows:

- For goods out of stock for sale, the original value of exported goods isthe cost of goods sold

- The purchased goods are not brought into the warehouse for immediatesale, the purchase price and the purchase cost are the cost of goodssold

 Method of determining the cost of goods issued:

 First in first out (FIFO) method:

Under this method, goods are charged at their actual ex-warehousingprice on the assumption that the first batch of goods will be shipped first So,the amount of goods left out of the warehouse in any import is calculatedaccording to the actual price of that import

 Weighted average method:

The value of each kind of inventories shall be calculated according to theaverage value of each similar kind of goods at the beginning of the periodandthe value of each kind of inventories purchased or manufactured in the period.The average value may be computed according to the period or each time a lot

of goods are in warehouse, depending on the enterprise's situation

 For trading enterprises:

The cost of goods sold includes the actual purchase and the purchasecost allocated to the quantity of goods sold The actual purchase value ofgoods sold identified as the 3 methods above The purchase cost allocated tothe number of goods sold: Due to the cost of purchased goods related to manytypes of goods, including the volume of goods in the period and goods at thebeginning of the period, so need to allocated purchase costs for goods soldand finished goods at the end of period according to the appropriate criteria(revenue, purchase value, quantity, weight, …)

 Specific identification method:

This method tracks the actual physical flow of the goods Each item ofinventory is marked, tagged or coded with its “specific” unit cost This

method is possible when a business has a limited variety of high- unit-costitems that can be clearly identified.

 The steps to calculate the cost of goods sold

 Calculate the total actual purchase value of goods for sale

- Weighted average method:

 Average method for the whole reserve period:

 The continuous weighted average method:

This method is basically the same as the above method, but the averageunit price is determined on the basis of the actual purchase price in stock

at the beginning of the period and the unit price of each goods import inthe period

Actual value of the

out-of-stock =

Quantity of exported

Unit price ofavarage exported

- First in first out method: This method assumes that merchandise comesfirst will out first

Expenses for purchase and distribution of expenses for out-of-stockgoods

At the end of the period, the accountant shall amortize purchasingexpense to the sold out-of-stock goods by the following formula:

of the period +

Purchase expensesincurred in theperiod

x

Standarddistribution ofgoods sold forsale in the period

Ending inventory and inventory sold during

the period

* According to the periodic inventory method:

According to this method, at the end of the period, the enterprise takesinventory of inventory and calculates the actual cost of goods shipped outaccording to the following formula:

+

Actual cost ofinventory duringthe period

-Actual cost

of endinginventory

- Purchase contract

 Accounting accounts used and accounting procedures

- Acc 632: Cost of goods sold

- Related account

 Acc 156: Goods

 Acc 157: Consignment for sale

 Acc 611: Purchase

 Other accounts such as Account 133, 111, 112,…

Flowchart 1.4 The chart of accounting for cost of goods sold by the regular

declaration method

Flowchart 1.5 COGS accounting chart by periodic inventory method

1.2.3.2 Business administrative expenses

1.2.3.2.1 Concept

a Selling expenses:

- Selling expenses are all expenses related to the consumption of finishedproducts and goods of the enterprise, including: costs of preservation,packaging, transportation, costs of offering, introdution, advertising reports,agency commission costs, product warranty costs, etc

b Administration expenses:

- Administration expenses are all overhead costs of business includingsalary expenses of business‘ administrative staffs (salary, wages,subsidies, ); social insurance, medical insurance, labor union expenses,unemployment insurance of administrative staff, expenses of office materials,labor instruments, depreciation of fixed assets used for administration, leaserent, provision for bad debts, outsourced services (electricity, water,telephone, fax, assets warranty, fire and explosive accidents, ), other cashexpenses (expenses of entertainment, customer conference )

1.2.3.2.2 Accounting vouchers use:

- Salary sheet, time sheet, insurance spreadsheet

- Table of depreciation of fixed assets

- VAT invoice, payment slip, debit note,

1.2.3.2.3 Accounting accounts used and the order of accounting

- Account 642: Business administration expenses have 2 level 2accounts:

 Account 6421: selling expenses

 Account 6422: business administrative expenses

- Related accounts: Account 111, 112, 331, 3331, 156, 214, 334, 338

Flowchart 1.6 Flow chart of selling expenses

Flowchart 1.7 Flow chart of business administrative expenses

133 133 642 Cost of materials and tools

111, 112, 152

1.2.3.3 Financial expenses

a Concept:

- Financial expenses are expenses related to capital activities,financial investment activities and transactions of a financial nature.Financial operating expenses include:

 Expenses related to investment in financial instruments: investment

in joint ventures, investments in associates, investments insubsidiaries, other investments (Expenses of holding, liquidation,transfer of investments, investment losses )

 Expenses related to lending activities

 Expenses related to foreign currency trading

 Non-capitalized business loan interest expense, payment discountwhen selling products, goods, providing labor and services

 Loss difference when buying and selling foreign currencies, losses

on foreign exchange rate differences

 Provision for devaluation of short-term and long-term financialinvestments

b Vouchers use:

- Debt notice, credit note

- Loan contract

- Loan interest calculation list

c User account and accounting order

- Account 635: Expenses for financial activities

- Related accounts: Acc 111, 112, 133, 911,…

Flowchart 1.8 The order of accounting for the cost of financial

activities

1.2.3.4 Other expenses

a Concept:

Other costs reflect costs incurred as a result of events or transactions thatare separate from the normal operations of the business Other businessexpenses may include:

- Cost of liquidation and sale of fixed assets

- Remaining value of fixed assets liquidated or sold normally

- Remaining value or selling price of fixed assets sold for sublease underfinance lease or operating lease

- Fines for breach of economic contracts

- Amounts subject to tax payment, tax arrears

- Expenses due to mistake or omission when recording in accountingbooks

- Other expenses

b Vouchers use:

- VAT invoice

- Payment

- Debit note from the bank

- Minutes of handling excess and missing accounts

- Tax receipt

c User account and accounting order

- Account use: Acc 811- other expenses

Flowchart 1.9 Other cost accounting procedures

1.2.3.5 Expenses of corporate income tax

a Concept:

- CIT expense reflects the enterprise's corporate income tax expense,including current corporate income tax expense and deferred corporateincome tax expense incurred in the year as the basis for determining operatingresults after-tax business of the enterprise in the current fiscal year

- Current corporate income tax expense is the payable corporate incometax amount calculated on the taxable income in the year and the currentcorporate income tax rate.

- Deferred income tax expense is the amount of corporate income taxpayable in the future arising from:

 Recognition of deferred tax payable during the year

 Reversal of deferred tax assets has been recognized from previousyears

- Deferred corporate income tax is a reduction in deferred corporateincome tax expenses arising from:

 Recognition of deferred tax assets during the year

 Reversal of deferred income tax payable has been recognized fromprevious years

b Current corporate income tax expenses accounting principles

- Quarterly, the accountant shall base on the corporate income tax return

to record the temporarily payable corporate income tax amount into thecurrent corporate income tax expense At the end of the fiscal year, based onthe tax finalization declaration, if the temporarily payable corporate incometax amount in the year is smaller than the payable amount for that year, theaccountant shall record the additional payable corporate income tax amount tothe expenses applicable corporate income tax In case the temporarilypayable corporate income tax amount in a year is larger than the payableamount of that year, the accountant must record a reduction in currentcorporate income tax expense as the difference between the temporarilypayable corporate income tax amount and the current corporate income taxamount in the year is greater than the payable amount

- In case of detecting non-material errors related to the payable corporateincome tax of the previous years, the enterprise may account an increase (ordecrease) in the payable enterprise income tax amount of the previous years

as expenses current corporate income tax for the year the error wasdiscovered

- For material errors, accountants make retrospective adjustmentsaccording to the provisions of Accounting Standard – “Changes in accountingpolicies, accounting estimates and errors”

- When preparing the financial statements, the accountant must transferthe incurred current corporate income tax expenses to account 911 -

“Determination of business results” to determine the profit after tax in theaccounting period

c Vouchers use:

- Tax return

- Paper of payment to the state budget

- Authorization

d Accounting accounts used and the order of accounting

Account 821: Corporate income tax expenses

Flowchart 1.10 Accounting procedure for CIT expenses

1.2.4 Determining business results

 Content and formula

Business results are the final result of the production andbusinessactivities of the enterprise in a certain accounting period, or thebusiness results are expressed as the difference between the total revenue andthe total expenditure In case of loss, business result will be compensated asregulated and decided by responsible authorities In case of profit, businessresult willbe allocated as regulated by the financial regime

The results of business operations are usually the result of the company'srevenue-generating activities, which are sales activities and financialactivities

Profit (loss) before tax = Net revenue from sales of goods and service

provision – Cost of goods sold + Financial revenue – Financial expenses –

Selling expenses -– Administration expenses + Other incomes – Otherexpenses.

Profit (loss) after

Profit (loss) before

-Corporate incometax expense

 Accounting accounts used

- Account 911: Determination of business results

- Related accounts: 421,511, 632, 642, 635, 515, 711, 811

Figure 1.10: Accounting sequence to determine business results

1.2.5 Presenting information about revenue, expenses and business results on financial statements

Financial statements are used to provide information on the financialposition, business situation and cash flows of an enterprise, to meet themanagement requirements of business owners, State agencies and the usefulneeds of enterprises users in making economic decisions

 Requirements for information presented on financial statements

Financial statements must provide an enterprise's information about: Assets,liabilities, equity, revenue, other income, business administration expensesand other expenses, profit, loss and division of business results

- The information presented on the financial statements must be complete,objective, and free from errors to reflect honestly and reasonably thefinancial position and business results of the enterprise

- Financial information must be relevant

- Financial information must be presented in all material respects

- Financial information must be verifiable, timely and easily accessibleunderstand

- Financial information must be presented consistently and comparablebetween periods

 System of annual financial statements applied to small and medium enterprises:

- Accounting balance sheet

- Report on business performance

- Notes to the financial statements

- Statements of cash flows

 Accounting balance sheet (B01):

A balance sheet is a consolidated financial statement, used to reflectoverview of assets and capital of a business at a given time

Information indicators related to sales and determination of businessresults on the Balance Sheet:

- Targets of deductible VAT:

 This entry reflects the deductible VAT amount and the tax amountVAT is also refundable at the time of reporting

 The data recorded in this entry is based on the debit balance ofAcc133

- Targets of Taxes and payables to the State:

 This entry reflects the sum of amounts payable by enterprises to theState at the reporting time, including taxes, fees, charges and otherpayables

 Data recorded in this entry is based on the total detailed credit balance

of Account 133

 Report on business performance (B02):

The income statement reflects the situation and results of the businessoperations of an enterprise, including results from its main business activitiesand results from financial and other activities of the enterprise

The sales targets and determination of business results are shown on theincome statement The way to set these targets is as follows:

 Data base: Report on business results of the preceding year; accounting

books of related type 3.5.6.7.8.9 accounts

 Setting method:

Column “This year”:

- “Revenue from sales and provision of services” (Code 01)

 This entry reflects the enterprise's total revenue from selling goodsand providing services in the reporting year

 Based on the accumulated arising number of Account 511 in thereporting period to record

- “The deduction from revenue” (Code 02)

 This entry reflects the aggregate of deductions from total insuranceand service provision during the year, including trade settlements,deposit settlements, and trade settlements in the reporting period

 Based on the accumulated arising number of Account 521 in thereporting period to record

- "Net revenue from selling goods and providing services" (Code 10)

Code 10 = Code 01 – Code 02

- “Cost of goods sold” (Code 11)

 This entry reflects the total cost of goods supplied, other expensesincluded in the cost of goods sold or a decrease in the cost of goodssold in the period

 Based on accumulated credits of Account 632, corresponding debits

of Account 911 of the months in the period

- “Gross profit from sales and service provision” (Code 20) = Code 10 – Code 11

 This entry reflects the difference between the net revenue from sales

of goods and provision of services and the cost of goods sold arising

in the reporting period