Accounting for Deductions When Calculating Net Revenue:

Interpretation:

(1): VAT payable calculated by direct method (2): Revenue from sale and liquidation of fixed assets

(3): Collecting fines from customers, collecting compensation from insurance agencies, collecting bad debts

(4): Collect debts of unknown owners.

(5): Sponsored, donated materials, goods, fixed assets (6): Collected fines from customers by deducting from deposit (7): At the end of the period, transferred all other income

1.3 Accounting for deductions when calculating net revenue:

1.3.1 Accounting for trade discounts:

1.3.1.1 Concept:

Trade discount is the amount of money that the enterprise has deducted or paid to the buyer because the buyer has purchased products, goods, and services in large quantities according to the agreement on trade discount stated in the economic contract of purchase and sale or commitment to purchase and sale.

1.3.1.2 User account:

-Accounting uses account 521: "trade discount". This account has the following structure:

Content and structure of account 521:

Account 521

Trade discount accepted for payment to customer.

Transfer all trade discounts to account 511 - sales revenue and service provision

Transfer all trade discounts to account 512 - internal sales revenue to determine net revenue of the planning period.

Account 521 has no ending balance.

1.3.2 Accounting for sales discounts:

1.3.2.1 Concept:

Sales discount is the amount deducted for customers due to special reasons such as poor quality goods, goods not meeting specifications, stated in the contract.

1.3.2.2 User account:

Accountants use account 532: “Sales discount”. This account has the following structure:

Account 532

Sales discounts accepted for customers due to poor quality or incorrect specifications compared to the contract.

Transfer all sales discounts to account 511 and account 512 to determine net revenue of the planning period.

Account 532 has no ending balance.

1.3.3 Accounting for returned goods:

1.3.3.1 Concept:

Returned goods are goods that have been considered to have been sold (ownership has been transferred, payment has been collected or accepted by the buyer) but are returned by the buyer to the seller because the seller does not respect the signed economic contract such as not meeting requirements, standards, technical specifications, poor quality goods...

1.3.3.2 User account:

Accountants use account 531: “Discount on sales”. This account has the following structure: account 531

Sales revenue is returned, refunded to the buyer or deducted from customer receivables for returned products, goods and services.

Transfer all sales discounts to account 511 and account 512 to determine net revenue of the planning period.

Account 531 has no ending balance.

Diagram 1.4: General accounting accounts 521,531,532:

Account 131, 111,112 Account 521, 531, 532 Account 511

Discount for buyers

Account 3331

Revenue reduction

Output VAT account 632

Account 155,156

Receive goods back into warehouse

1.4 Accounting for expenses incurred during the sales process :

1.4.1 Accounting for cost of goods sold:

1.4.1.1 Concept:

Cost of goods sold is the actual price of goods sold (including purchase costs allocated to goods sold during the period - for commercial enterprises, or the actual cost of completed labor and services that have been determined as consumed and other amounts included in cost of goods sold to determine business results during the period .

*Methods of calculating cost of goods sold:

The cost of goods sold is calculated using one of the following four methods:

+First in first out (FIFO)

+Last in, first out (LIFO)

+Weighted average

+Specific reality

1.4.1.2 Documents used:

-Warehouse delivery note

-Sales invoice

1.4.1.3 User account:

Accountants use account 632: “Cost of goods sold”. This account has the following structure:

Account 632

- Cost of finished products, goods and services consumed during the period.

- Difference in inventory price reduction provision (this year is larger than last year)

- Transfer cost of products and goods to account 911 to determine business results

- Reversal of inventory price reduction provision (this year is smaller than last year)

Account 632 has no ending balance.

1.4.1.4 Accounting method:

Diagram 1.7: General accounting account 632 – Cost of goods sold:

Account 156 Account 632 Account 155, 156

(1)

(2)

TK 159

(3) (4)

TK 155

Account 911

TK 157

(5)

(6)

(7)

Interpretation:

(1): Export products to customers (2): Re-enter returned goods into inventory

(3): Provision for inventory price decrease (4): Reversal of provision for inventory price decrease (5): Export of goods for sale

1.5 Accounting determines business results:

1.5.1 Concept:

Business results are the final results of a company's production, business and other activities after a certain period, expressed in terms of profit or loss.

Profit (loss) from production and business activities

In there:

Net revenue

= from activity -

Production and business

Cost of goods sold -

Expense

sell -

Business management costs

Net revenue from operations

production and business activities

1.5.2 Documents used:

-Transfer slip

= Sales revenue

finished product

- Deductions

revenue

-Business performance report

1.5.3 User account:

Accountants use account 911: “Determining business results”. This account has the following structure:

Account 911

- Cost of goods, products and services consumed during the period.

- Sales and business management costs

- Financial costs and other operating expenses.

- Interest transfer.

- Net revenue from products, goods and services consumed during the period.

- Financial revenue and other income.

- Carry forward actual loss during the period

Account 911 has no ending balance.

1.5.4 Accounting method:

Diagram 1.13: General accounting account 911 – Determining business results:

Account 632 Account 911 Account 511,512

(1)

(6)

Account 635, 811

Account 511, 711

(2)

(7)

Account 641, 642 Account 421

(3)

(8)

Account 821

(4)

TK421

(5)

Interpretation:

(1): Carry forward cost of goods sold incurred during the period

(2): Carry forward financial expenses and other expenses incurred during the period

(3): Carry forward selling expenses and business management expenses incurred during the period (4): Carry forward current corporate income tax expenses incurred during the period

(5): End of period, interest transfer

(6): Carry forward net sales revenue arising during the period

(7): Carryover of financial revenue and other income arising during the period (8): At the end of the period, carryover of losses

1.6 General accounting method:

Summary and balance sheet method:

This is a method of summarizing the assets, capital sources and business performance of an accounting unit over a certain period by preparing comprehensive and balanced reports such as: balance sheet; business performance report; cash flow report...

CHAPTER 2: CONSUMPTION ACCOUNTING AND DETERMINING BUSINESS RESULTS AT DANG GIA PHAT ELECTRICAL ENGINEERING COMPANY LIMITED.

2.1. General introduction about the company:

2.1.1. Company overview : Business registration certificate (see Appendix A) Company name in Vietnamese: DANG GIA PHAT ELECTRICAL ENGINEERING COMPANY LIMITED

Company name written in foreign language: DANG GIA PHAT CO.,LTD

Head office address: No. 8B, Group 8, Street 2, Quarter 6, Truong Tho Ward, Thu Duc District, Ho Chi Minh City

Charter capital: 3,000,000,000 VND (Three billion VND) Form of capital ownership:

Member Name	Place of permanent residence registration for individuals or head office address for organizations	Capital contribution value (thousand VND)	Capital contribution (%)
1	Dang Hong Thai Nguyen Hau Nghia	No. 36/2 Group 51, Road 5, Area	2,000,000,000	66.6
		Street 5, Linh Chieu Ward,
		Thu Duc District, HCMC
2		No. 36/2 Group 51, Street 5, Ward 5, Linh Chieu Ward,	1,000,000,000	33.4
		Thu Duc District, HCMC

Maybe you are interested!

2.1.2. Main business lines:

- Wholesale of other machinery, equipment and spare parts.

- Electrical system installation

- Wholesale other household items

- Retail sale of household electrical appliances, beds, wardrobes, tables, chairs and similar furniture, lamps and electric lighting sets, other household appliances not elsewhere classified in specialized stores.

2.1.3 Organizational structure of the unit:

2.1.3.1 Management structure:

Diagram 1.14: Company management structure diagram

Manager

Vice president

Accounting Department

Technical Department

Business Planning Department

Director: Is the direct leader of departments, organizes, implements and manages all activities of the company and in accordance with current laws. Takes general responsibility for all aspects of the company and all employees in the company.

Deputy Director: Assists the director in handling tasks assigned by the director, is responsible to the director for assigned tasks, including authorization when the director is absent. Regularly handles assigned tasks, maintains meetings according to the prescribed schedule, and is responsible for implementation according to the law on enterprises.

Accounting Department: Organizes economic accounting of the Company's production and business activities, analyzes economic activities in the Company on a regular basis, in order to properly assess the situation, results and effectiveness of the Company's business plan, detects waste and damage that has occurred, and takes remedial measures to ensure increasing operating results and profits.

Business Planning Department: Develop the Company's production and business development strategy in each period. Advise on the development of investment plans and implementation of investment projects. Take charge of the Company's production and business planning in each period.

Comment