Account Used: Account 632: Cost of Goods Sold Debit:

When calculating cost of goods sold using the weighted average method, we can apply one of the following two methods:

+ Weighted average method for the entire reserve period:

Unit price Value of products and goods in stock at the beginning of the period + Value of products and goods imported during the period

Quantity of products and goods in stock at the beginning of the period + Quantity of products and goods imported during the period

This method is quite simple and easy to do, only need to calculate once at the end of the period. However, this method has a major disadvantage that the accounting work is concentrated at the end of the period, affecting the progress of other parts. Moreover, this method does not meet the timely requirements of accounting information at the time of the transaction.

+ Weighted average method after each entry:

Unit price Actual value of products and goods in stock after each import

Actual quantity of products and goods in stock after each import

The value of goods exported by this method has the advantage of overcoming the limitations of the above method, but the calculation is complicated, repeated many times, and takes a lot of effort. Due to the above characteristics, this method is applied in businesses with few types of inventory and low import and export volume.

- First in, first out (FIFO) method

This method is applied based on the assumption that the goods purchased or produced first are sold first, and the remaining goods at the end of the period are the goods purchased or produced at the end of the period. According to this method, the value of goods issued is calculated based on the price of the goods received at the beginning of the period or near the beginning of the period.

At the beginning of the period, the value of inventory is calculated based on the price of goods purchased at the end of the period or near the end of the period that are still in stock.

- Last in, first out (LIFO) method:

This method assumes that the goods purchased or produced later are sold first and that the remaining inventory at the end of the period is the goods purchased or produced earlier. According to this method, the value of the goods sold is calculated based on the price of the goods imported last or almost last, and the value of the inventory is calculated based on the price of the goods imported at the beginning of the period or almost the beginning of the period.

Thus, with this method, the cost of the most recent purchase will be relatively close to the cost of the replacement goods. The implementation of this method will ensure the requirements of the matching principle in accounting. However, the cost of the ending inventory may not be close to the market price of the replacement goods.

- Specific practical method:

According to this method, the product or goods exported from the warehouse belong to which batch, the unit price of the imported goods is used to calculate. This is the best solution, it complies with the matching principle of accounting, the actual cost is consistent with the actual revenue. The value of the goods exported from the warehouse for sale is consistent with the revenue it generates. Moreover, the value of the inventory is reflected correctly according to its actual price.

This method is suitable for high-value goods associated with their own characteristics.

1.3.3.2 Account used: Account 632: Cost of goods sold Debit:

+ Reflects the cost of products, goods and services consumed during the period

+ Reflecting the cost of raw materials, labor costs exceeding the normal level and fixed general production costs that are not allocated are not included in the value of inventory but must be included in the cost of goods sold of the accounting period.

+ Reflecting the cost of construction and self-made fixed assets exceeding the normal level is not included in the original price of completed self-built and self-made fixed assets.

+ Reflects the difference between the inventory price reduction provision to be established this year being greater than the provision established last year.

Side has:

+ Reflects the reversal of inventory price reduction provisions at the end of the fiscal year.

+ Cost of returned goods sold

+ Transfer the cost of products, goods, and services consumed during the period and all investment real estate business expenses incurred during the period to account 911 - Determining business results.

Account 632 has no ending balance.

1.3.3.3: Usage books

- General Journal

- Detailed books 154,155,157…

- Ledger 154,155,157,156…

- Ledger 632

- Ledger 911

1.3.3.4 Method of accounting for cost of goods sold:

Diagram 1.3: Accounting for cost of goods sold

TK154 TK155 TK632 TK911

(1)

(2)

(7)

(3)

TK157

(5)

(6)

1. Import finished products from DNSX into warehouse, outsource processing.

2. Deliver finished products to customers.

3. Value of finished products sent for sale or exported to agents.

4. Finished products are not stored in the warehouse but are delivered or sent for sale immediately.

5. For finished products, goods and services that have been sent for sale, now determined as consumed.

6. Carry over cost of goods sold to determine business results.

1.3.4. Accounting for sales costs and business management costs in the enterprise.

 Documents used:

- Value added tax invoice

- Payment voucher, Debit note

- Spreadsheet and KH allocation

- Other relevant documents

 User account

 Account 641: Selling expenses

 Level 2 accounts:

+ TK6411- Employee costs

+ Account 6412 - Material and packaging costs

+ Account 6413 - Cost of tools and supplies

+ Account 6414 - Fixed asset management costs

+ Account 6415 - Warranty costs

+ Account 6417 - Cost of outsourced services

+ Account 6418 - Other cash expenses

 Account structure

Debit account 641 Credit

Costs incurred in connection with the process of selling products, goods, and providing services.	Transfer selling expenses to account 911.
Total PS Debt	Total PS Yes

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Account 641 has no ending balance.

 Account 642: Business management costs

 Level 2 accounts:

+ TK6421 - Management staff costs

+ Account 6422 - Management material costs

+ Account 6423 - Office supplies costs

+ Account 6424 - Fixed Assets Expenses

+ Account 6425 - Taxes, fees and charges

+ Account 6426 - Provision expenses

+ Account 6427 - Cost of outsourced services

+ Account 6428 - Other cash expenses

 Account structure:

Debit account 642 Credit

- Actual business management costs incurred during the period;

- Provision for doubtful debts, provisions for payables;

- Unemployment benefit provision.

- Reversal of provisions for doubtful debts and provisions for payables;

- Transfer business management costs to account 911.

Total PS Debit Total PS Credit

Account 642 has no ending balance .

Method of accounting for sales costs and business management costs Diagram 1.4: Accounting for sales costs

Account 133 Account 641

Account 111,112,152.. Account 111,112

Material and tool costs Revenue reduction expenses

Account 334,338

Account 911

Salary costs and payroll deductions

Cost of sales

Account 214

Fixed asset depreciation expense account 352

Provision reversal

Account 142,242,335 payable for insurance costs

product and goods

Allocated costs, prepaid expenses account 512

Finished goods for internal consumption

Account 333 (33311)

(if any)

Account 111,112,141,331 …

Outsourced service costs, other cash costs

TK 133

Input VAT is not deductible.

if included in cost of sales.

Diagram 1.5: Business management cost accounting

Account 133 Account 642

Account 111,112,152.. Account 111,112…

Material and tool costs Revenue reduction expenses

Account 334,338 Account 911

Salary, wages and allowances costs

Meal allowance and salary deductions K/c Management expenses account 214

Fixed asset depreciation expense account 139

Refund the difference

Account 142,242,335 between receivable reserve

bad debt provisioned for the year, large unused prepaid expenses, gradually allocated expenses

Account 133 is more than the provision amount this year

Non-deductible input VAT account 352

If included in business management costs account 336

Lower level management costs must be paid to higher level

Reversal of provision for payables

as per rules

TK 139

Provision for doubtful debts

Account 111,112,141…

Outsourced service costs Other cash costs

Account 333

Business license tax and land rent must be paid to the state budget.

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