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General overview of production and business activities at Dinh Le Steel Joint Stock Company - 8

Form 19: Sample of Accounting Voucher

BOOK RECORDING DOCUMENTS

From date….to….

CTGH number:…….

Unit: VND



Abstract

Account number


Amount


Note

Debit account

(In debt)

Account has (has)

A

B

C

1

D






Add table

x

x


x

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General overview of production and business activities at Dinh Le Steel Joint Stock Company - 8

Attached….original documents Date….month….year….

Chief Accountant

(Signature, full name) (Signature, full name)


Form 20: Sample of the Register of Accounting Documents

REGISTER OF ENTRANCE DOCUMENTS

Year…..


Accounting vouchers

Accounting vouchers

Number

Day

Number

money

Number

Day

Number

money

A

B

1

A

B

1







- Add month

- Accumulated from the beginning of the quarter



- Add month

- Accumulated from the beginning of the quarter



Date….month….year 2007


Bookkeeper

Chief Accountant

Manager

(Signature, full name)

(Signature, full name)

(Signature, full name)

Third: About accounting books.

Besides the advantages of accounting books mentioned above, there are some errors in the book form. The detailed book of materials lacks the column "Corresponding account", which will cause difficulties in the process of accounting and checking accounting work.

Recommendation : It is necessary to add the column "Corresponding account" in the material detail book.

For example, according to the example of the material detail book given in the article, it is necessary to add a column "Corresponding account" as shown in table 21 as follows:


Form 21: Sample of the Company's detailed material book that needs to be revised.

MATERIAL DETAIL BOOK

From 01/08/2008 to 31/08/2008

Vlsphh: Hot rolled steel

Code: VLCGON0001 Beginning balance: 41,500,000 Unit: Ton Beginning balance: 2.5

Document

Interpretation

TK opposite

application

Enter

Export

Existing

Day

C.from

SL

T.money

SL

T.money

Sl

T.money

05/01

NM01

Import materials

331

2

32,000,000



4.5

73,500,000

17/01

XSX05

Export of production materials

6215



3

49,500,000

1.5

24,000,000

20/01

XSX09

Export of production materials

6215



1

16,000,000

0.5

8,000,000

Add table


2

32,000,000

4

65,500,000

0.5

8,000,000

Date….month….year….

Chief Accountant

Fourth: About making a material allocation table

The Company does not have a material allocation table, so it will not know the material cost for each product. Not having a material allocation table for each product will cause many difficulties in the problem of dividing the production plan and calculating product cost.

Recommendation: The company needs to create a material allocation table to be able to monitor the material allocation situation during the period to analyze and make a better production plan for the next period. Based on the criteria of the recommendation on how to reclassify materials, the material allocation table template can be created as follows:


Table 22: Material allocation table template that the Company should apply.


TABLE OF ALLOCATION OF RAW MATERIALS AND INGREDIENTS

May…..


STT

Credit the accounts

Debit accounts

Account 152

Account 1521

Account 1522

1

Account 154 - Production and business expenses



2

Account 621 - Direct material costs




- Account 6212 - Direct material costs - Other products




- Account 6215 - Direct material costs - Factory products

silk




- Account 6212 - Direct material costs - products

Circuit breaker




- Account 6212 - Direct material costs - Demand products

fight



Add table



Thursday: About provision for inventory price reduction.

Inventories in general and raw materials in particular are current assets whose value changes over time, but the Company does not make provisions for this change. Therefore, the Company cannot avoid risks from inventory depreciation and cannot accurately reflect the actual value of assets on the balance sheet.

Recommendation : The company needs to make provisions for material price reduction.

The company needs to set up a provision for material price reduction because the price of materials on the market is always fluctuating, especially for a company that regularly has to buy materials from outside like Dinh Le Steel Joint Stock Company, the purchase price is not stable.

Provision for devaluation of raw materials is made at the end of the year (with the accounting reporting period). The Company only makes provisions for devaluation of inventories for types of inventories owned by the Company, with reasonable and legal accounting documents proving the cost price of the inventories. Based on actual fluctuations in inventory prices, the Company determines the level of provisions for devaluation of inventories as follows:

Inventory reserve level

need to set up for the year

(N)

Quantity

= x

HTK each type

The difference is reduced.

price of each type

- At the end of the accounting year, based on the provision for inventory price reduction, the accountant records:

Debit account 632: Cost of goods sold.

Credit account 159: Provision for inventory price reduction.

- At the end of the following fiscal year (N + 1), calculate the required provision level, if:

+ If the provision for inventory price reduction at the end of the following fiscal year is greater than the provision for inventory price reduction set up in the previous year, the difference will be set up additionally and recorded as follows:

Debit account 632: Increase in difference

Credit account 159: Increase in difference

+ If the provision for inventory price reduction at the end of the following fiscal year is less than the provision for inventory price reduction set up in the previous year, the difference will be reversed and recorded as:

Debit account 159: Decreased difference

Credit account 632: Decrease difference

The above provisioning both complies with the principle of prudence and contributes to

further stabilize production and business activities.

When calculating the provision level for 2007, the accountant determines

Item:

Debit account 632

Have account 159

Friday: Go home and follow up on purchases on the way.

At the Company, when purchasing materials, only when receiving both goods and related invoices and documents, the warehouse keeper will allow them to be stored and the accountant will reflect them in the books. In the Company's account system, there is account 151 - Goods purchased in transit, but in reality, the Company does not use this account but only monitors the actual materials that have been stored. However, in the case that the Company purchases materials during the month and has received invoices and payment documents from the seller, the Company has paid or has not accepted payment to the supplier, at this time the purchased materials are owned by the Company. But by the end of the month, for some reason, the goods have not arrived at the warehouse, so these materials are not reflected or monitored in any account. This shows that the accounting work for materials is not yet complete and accurate.

Recommendation: The company needs to account for goods purchased in transit, specifically:

During the month, if the invoice has been received but the goods have not arrived, the accountant will save the invoice in the "Goods in transit" file folder. During the month, if the goods arrive, the accounting will be recorded normally. However, if the goods have not arrived by the end of the month, based on the invoice and related documents, the accountant will record as follows:

Debit account 151 - part included in material price

Debit account 133 (1331) - deductible VAT.

Credit account 331 - unpaid invoices to suppliers

Next month, when the goods arrive, based on the warehouse receipt, the accountant records:

Debit account 152: Value of purchased goods in transit.


3.3. Evaluation of the efficiency of using materials at Dinh Le Steel House Joint Stock Company.

The table of analysis and evaluation of the efficiency of raw material use at the Company over the two years 2007 and 2008 is as follows:

T

T

Spending

2005

2006

Comparison 2008/2007

Absolute

Relative (%)

1

Material cost

27,835,999.14

31,202,216,692

3,366,316,978

12,093

2

Total revenue

revenue/cost of materials

1,4103

1,4388

0.0285

2,0208

3

Real profit

present/ cost

NVL

0.020952

0.02308

0.002128

10,1558

4

Average value

Inventory of raw materials

3,623,487,516

4,071,420,934

44,793,3418

12,362

5

Turnover ratio

of NVL

2.8

3.15

0.3

12.5

Table 2: Analysis table to evaluate the efficiency of using raw materials at the Company


With the formulas:


Average value of raw materials inventory


Value of raw materials in stock at the beginning of the period + Value of raw materials in stock at the end of the period

=

2

Turnover ratio

=

of NVL

Value of raw materials used during the period


Average value of raw materials in inventory during the period


Looking at January 2007 we see:


Average value of raw materials

=

inventory (01/2009)

1,003,570,046 + 946,267,086


2


= 974,918,566


Turnover ratio of

=

NVL January 2009

3,404,243,874


974,918,566


= 3.49


Comment:

In 2007, each dong of material cost generated 1.4103 dong of revenue and 0.020952 dong of profit from production and business activities. By 2008, each dong of material cost generated 1.4388 dong of revenue and 0.02308 dong of profit. Thus, in 2008, the revenue generated from each dong of material cost increased by 0.0285 dong compared to 2007, corresponding to a growth rate of 2.0208%. The profit generated from each dong of material cost in 2008 increased by 0.002128% compared to 2007, corresponding to a growth rate of about 10%. Thus, we can see that the efficiency of the Company's use of materials in 2008 increased compared to 2007.

Realizing that the Company's raw materials are small and of low value, the turnover ratio is

NVL's round in January 2009 is reasonable.

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