Account structure:
- Account 511 “Sales and service revenue”
In debt
Account 511 | Have | |
- Tax payable is calculated on sales revenue during the period. - Trade discounts, sales discounts, sales returns. - Transfer net revenue to account Section 911 | - Revenue from sales of products, goods and provision of services and labor performed by the enterprise during the accounting period | |
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Sales Revenue Accounting Process
(Account 511 has no ending balance).
Accounting methods for some main transactions:
Account 333
Account 511 | Account 111, 122, 113 | |||
End of period transfer of special consumption tax Export tax determines net revenue | DTBH and CCDV in the period (VAT applied according to) deduction method) | |||
Account 3331 | ||||
Account 521 | Output VAT corresponding | |||
Account 334 | ||||
End of period carryover DT deduction | Output VAT corresponding | |||
Pay employees by product discount | ||||
Account 911 | Account 111, 112, 131 | |||
End of period net revenue transfer Determine business results Figure 1.1 Accounting | revenue | Total payment price (VAT applied by direct method) sales and service | service | |
- VAT calculated by the direct method is calculated on the additional VAT of goods and services arising in the process from production to consumption. VAT payable corresponds to the revenue determined in the reporting period.
- Special consumption tax is considered one of the revenue deductions arising when a business provides self-produced products subject to special consumption tax to customers.
- Export tax is considered one of the revenue deductions arising when a business has goods that are allowed to be exported through a border gate or border. The business must pay export tax. The revenue from exported goods includes export tax that must be paid to the state budget.
1.2.2 Accounting for revenue deductions
Revenue deductions include:
- Trade discount: Is the amount the buyer receives for purchasing goods in large quantities according to the agreement.
- Sales discount: Is the amount deducted for the buyer in special cases due to poor quality goods.
- Returned goods: The number of products returned by customers due to the seller violating the terms of the contract.
Documents used:
- Value added tax invoice, regular sales invoice, sales contract.
- Payment documents such as: Receipts, payment vouchers, transfer checks, payment checks, payment orders, bank credit notes.
- Related documents such as: Returned goods receipt, etc.
User account:
With the enterprise accounting regime according to Circular 200/2014/TT-BTC, when accounting for revenue deductions, accountants will use account 521 "revenue deductions" including 3 level 2 accounts:
- Account 5211 "Trade discount": This account is used to reflect the trade discount for buyers due to customers purchasing goods in large quantities but not yet reflected on the invoice when selling goods or providing services during the period.
In debt
Account 5211 | Have | |
The amount of trade discounts accepted for payment to customers. | At the end of the period, transfer all trade discounts to account 511 "sales revenue and service provision" to determine reporting period revenue. | |
(Account 5211 has no ending balance)
- Account 5212 "Returned goods": This account is used to reflect the value of products and goods returned by customers due to economic contract violations, poor quality goods, incorrect types and specifications.
In debt
Account 5212 | Have | |
Revenue from returned goods has been refunded to the buyer or deducted from customer receivables. product number | Transfer revenue from returned goods to debit account 511 to determine net revenue in the reporting period. | |
(Account 5212 has no ending balance)
- Account 5213 "sales discount": This account is used to reflect the sales discount given to buyers due to poor quality of goods and services provided but not yet reflected on the invoice when selling goods and providing services during the period.
In debt
Account 5213 | Have | |
Sales discounts accepted by buyers due to poor quality or non-conformance of goods sold economic contract | Transfer all sales discount amount to account 511 | |
(Account 5213 has no ending balance)
Accounting method for revenue deductions:
Account 111, 112, 131
Account 521 | Account 511 | ||
Trade discount amount for customer, sales discount, sales return | End of period carryover trade discount, sales allowance, sales return | ||
Account 333 | |||
Corresponding VAT | |||
Diagram 1.2 Accounting for deductions from sales and service revenue
1.2.3 Accounting for cost of goods sold
Cost of goods sold is used to reflect the capital value of products, goods, services; investment real estate, production costs of construction and installation enterprises sold during the period. Cost of goods sold is only used when goods are sold out of warehouse; services are provided and consumed. When goods or services have been consumed and revenue is allowed to be determined, the cost of goods sold is also determined accordingly. Therefore, determining
Correct cost of capital is important for businesses to determine correct business results.
Documents used:
- Warehouse delivery note
- Warehouse delivery and internal transport note
- Direct sales invoice
- List of retail goods and services
- Other relevant documents
- Particularly for construction or transportation businesses, cost of goods sold is often determined through cost norms or cost lists and summary tables starting from the time of signing the contract until issuing invoices to partners.
Accounting principles:
- Only account for cost of goods sold and services when completed products, goods and services are determined to have been sold during the period.
- Expenses incurred such as inventory loss and damage after deducting compensation due to personal liability; costs of self-construction and self-manufacturing fixed assets exceeding normal norms that are not included in the original price of completed tangible fixed assets are directly accounted for in the cost of goods sold.
Method of determining cost of goods sold:
- Weighted average method:
Cost of goods sold is the value of each type of inventory calculated based on the average value of each type of similar inventory at the beginning of the period and the value of each type of inventory purchased or produced during the period. The average value can be calculated by period or each time a shipment is received, depending on the business situation.
+ Weighted average unit price for the whole period:
Average unit price of goods A in the period
= | Value of goods A in stock at the beginning of the period + Value Goods A imported during the period |
Quantity of goods A in stock at the beginning of the period + Quantity Goods A imported during the period |
Advantages: Simple, easy to do, only need to calculate once at the end of the period.
Disadvantages: Low accuracy, accounting work is concentrated at the end of the month, affecting other operations. In addition, this method does not provide timely information to accountants when transactions arise.
+ Average unit price after each import (weighted average):
Average unit price after import i of goods A
= | Actual inventory price after import i of row A |
Actual inventory after import i of row A |
Advantages: Overcomes the limitations of the above method.
Disadvantages: Calculation is multiple, complicated, and laborious. This method is applied to businesses with few product types 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 value of the goods issued is calculated according to the price of the first imported or produced batch and carried out sequentially until they are all sold.
Advantages: This method helps us to immediately calculate the cost of goods sold each time, ensuring timely data provision for accounting to record the next steps as well as for management. The cost of inventory will be relatively close to the market price of that item. Therefore, the inventory index on the accounting report has great practical significance.
Disadvantages: However, this method has the disadvantage of making current revenue inconsistent with current costs. According to this method, current revenue is generated by the value of products, goods, and materials that have existed for a long time. At the same time, if the number of types of goods is large, continuous imports and exports will lead to a significant increase in accounting costs and workload.
- Specific practical method:
According to this method, the product, material, goods exported from a batch are calculated based on the unit price of the batch. This is the best method because it complies with accounting principles: actual costs are consistent with actual revenue, and inventory value is accurately reflected at its value.
However, this method requires strict conditions, only businesses with few types of items, high-value inventories, and stable items can apply this method. Businesses with many types of items cannot apply it.
- Retail price method:
This method is used in the retail industry to value inventories of large quantities of rapidly changing items with similar profit margins that cannot be measured using other costing methods, such as supermarket businesses.
The cost of inventory is determined by taking the selling price of the inventory and subtracting a reasonable percentage profit margin. The percentage used takes into account items marked down below their original selling price. Typically each retail department will use its own average percentage.
The cost of goods purchased during the period is calculated for goods consumed during the period and goods in inventory at the end of the period. The selection of criteria for allocating the cost of goods purchased depends on the specific situation of each enterprise but must be implemented according to the principle of consistency.
The retail price method is applied to some specific units (for example, supermarket or similar business units).
Account used: – Account 632 “Cost of goods sold”
Account 632 "Cost of goods sold" is the account used to track the cost of goods, finished products, labor, and services sold during the period.
In debt
Account 632 | Have | |
- Collection of capital values of finished products, goods and services provided during the period. - Other items are included in cost of goods sold during the period. - The amount of provision for inventory price reduction (the difference between the amount of provision to be set up this year is greater than the amount established last year but not used up yet). | - Cost of returned goods sold. - Transfer cost of goods to debit account 911. - Carry over cost of goods sent for sale but not yet determined as consumed. - Reversal of inventory price reduction provision at the end of the fiscal year (the difference between the provision to be set up this year is less than number established last year not used up yet). | |
(Account 632 has no ending balance)
- According to the regular declaration method:
+ Regular, continuous and systematic monitoring.
+ Reflects the import, export and inventory status.
+ Export value can be calculated at any time during the period.
+ Documents such as warehouse receipts, warehouse delivery notes; inventory records of materials and goods made during the period depending on the time of inventory.
Advantages: Can specifically determine the value and quantity of inventory at each time according to demand; contributes to quickly and promptly adjusting the business performance of the enterprise; reduces errors in management and recording.
This method is often applied to manufacturing units and business units trading in high-value items such as machinery and equipment with high technology and quality.
Account 154 Account 632 Account 155, 156
Finished products are sold immediately without being stored in warehouses.
TK 157
Finished products, goods have been
sold returned to warehouse
Finished products Shipment
produce and sell without warehousing
Account 155, 156
sell
Okay
determined to be
consumed
Account 911
At the end of the period, transfer the cost of goods sold of finished products and consumed goods
Finished products, goods sent for sale
Export finished products and goods to
sold determined to be consumed
Diagram 1.3 Accounting for cost of goods sold using the perpetual inventory method
period
- According to the periodic inventory method
+ Not following up regularly and continuously.
+ Only reflects beginning and ending inventory, does not reflect imports and exports during the period
+ The value of goods exported during the period can only be calculated at the end of the period.
+ The documents used are the same as the regular declaration method, however
However, it was not received from the warehouse keeper until the end of the period.
Advantages: Reduced amount of writing.
This method applies to businesses that trade in low-value goods, large quantities of different types, etc., and units that produce a certain type of goods.
Accounting methods for some main transactions:
TK 155, 157
Account 632 | TK 155, 157 | ||
Carry forward beginning inventory value Consignment not accepted receive | Carry over ending inventory value Goods not yet sold accept | ||
Account 611 “Purchase” | Account 911 | ||
Carry over the cost of goods sold determined to have been consumed | Carry forward cost of goods sold during the period | ||
Account 631 “Production cost” | |||
Transfer of finished lemongrass product value production during the period (production enterprise) | nn | ||
Diagram 1.4 Accounting for cost of goods sold using the periodic inventory method.