Inventory Accounting at Dong Duong Equipment and Spare Parts Joint Stock Company - 1

MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF COMMERCE

TRAN THI HANG

INVENTORY ACCOUNTING AT THE COMPANY

INDOCHINA EQUIPMENT AND SPARE PARTS JOINT STOCK COMPANY

MASTER'S THESIS IN ECONOMICS

HANOI, 2020

MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF COMMERCE

TRAN THI HANG

INVENTORY ACCOUNTING AT THE COMPANY

INDOCHINA EQUIPMENT AND SPARE PARTS JOINT STOCK COMPANY

Major: Accounting Code: 8340301

MASTER'S THESIS IN ECONOMICS

Scientific supervisor Dr. Pham Thanh Huong

HANOI, 2020

i

COMMITMENT

I hereby certify that the thesis “Inventory accounting at Dong Duong Equipment and Spare Parts Joint Stock Company” is my independent scientific research work. The thesis was conducted based on the theoretical research and the current situation of inventory accounting at Dong Duong Equipment and Spare Parts Joint Stock Company under the guidance of lecturer Dr. Pham Thanh Huong. The data and results presented in the thesis are honest, objective and have reliable sources.

Author

Tran Thi Hang

ACKNOWLEDGEMENTS

To be able to complete the master's thesis in economics completely, besides my own efforts, there is also the enthusiastic guidance of teachers as well as the encouragement and wholehearted support of family and friends throughout the time of studying and writing the master's thesis.

First of all, I would like to express my deep gratitude to my teacher and scientific advisor, Dr. Pham Thanh Huong, for her enthusiastic guidance and instruction throughout my master's thesis in economics.

I would like to thank the Board of Directors and all the teachers of the Graduate School - University of Commerce for creating favorable conditions for me during my time studying and researching at the school.

I would also like to thank the Board of Directors and employees of Dong Duong Equipment and Spare Parts Joint Stock Company for creating favorable conditions and enthusiastically helping me during my time studying at the company.

Finally, I would like to thank my family and friends who have always encouraged, supported and created conditions to help me complete this master's thesis in economics.

Thank you very much!

Author

Tran Thi Hang

INDEX

COMMITMENT i

ACKNOWLEDGEMENTS ii

TABLE OF CONTENTS iii

LIST OF ABBREVIATIONS vi

LIST OF FORMS, DRAWINGS, DIAGRAMS vii

INTRODUCTION 1

CHAPTER 1: THEORETICAL BASIS OF INVENTORY ACCOUNTING IN COMMERCIAL ENTERPRISES 9

1.1 Basic issues of inventory in business 9

1.1.1 Concept and characteristics of inventory 9

1.1.2 Inventory classification 11

1.1.3 Characteristics of commercial enterprises affecting inventory accounting 14

1.1.4 Management requirements and tasks of inventory accounting 15

1.2 Inventory accounting from the perspective of financial accounting 17

1.2.1 Regulations on inventory accounting according to Vietnamese Accounting Standards 17

1.2.2 Inventory accounting according to Vietnamese Enterprise Accounting Regime 21

1.3 Inventory accounting from the perspective of management accounting 39

1.3.1 Inventory standards and estimates 39

1.3.2 Collecting inventory information 42

1.3.3 Inventory information analysis 46

1.3.4 Presentation and provision of inventory information 47

CHAPTER 1 CONCLUSION 49

CHAPTER 2. CURRENT STATUS OF INVENTORY ACCOUNTING AT DONG DUONG EQUIPMENT AND SPARE PARTS JOINT STOCK COMPANY 50

2.1 Overview of Dong Duong 50 Equipment and Spare Parts Joint Stock Company

2.1.1 Characteristics of business organization at company 50

2.1.2 Characteristics of management organization at company 54

2.1.3 Characteristics of accounting organization at company 56

2.2 Factors affecting inventory accounting at Dong Duong 60 Equipment and Spare Parts Joint Stock Company

2.2.1 External factors 60

2.2.2 Internal factors 62

2.3 Current status of inventory accounting at Dong Duong Equipment and Spare Parts Joint Stock Company from the perspective of financial accounting 63

2.3.1 Regulations on inventory accounting at company 63

2.3.2 Detailed inventory accounting 72

2.3.3 General inventory accounting 73

2.3.4 Presentation of inventory information on Financial Statements 81

2.4 Current status of inventory accounting at Dong Duong Equipment and Spare Parts Joint Stock Company from the perspective of management accounting 83

2.4.1 Inventory standards and estimates 83

2.4.2 Collecting inventory information 84

2.4.3 Inventory information analysis 85

2.4.4 Presentation and provision of inventory information 85

2.5 Evaluation of the current status of inventory accounting at Dong Duong 86 Equipment and Spare Parts Joint Stock Company

2.5.1 Advantages 86

2.5.2 Existence and causes 89

CHAPTER 2 CONCLUSION 93

CHAPTER 3. SOME SOLUTIONS TO IMPROVE INVENTORY ACCOUNTING AT DONG DUONG EQUIPMENT AND SPARE PARTS JOINT STOCK COMPANY 94

3.1 Development orientation and requirements for perfecting inventory accounting at Dong Duong 94 Equipment and Spare Parts Joint Stock Company

3.2 Complete solution for inventory accounting at Dong Duong 95 Equipment and Spare Parts Joint Stock Company

3.2.1 Perfecting inventory accounting from a financial accounting perspective 95

3.2.2 Perfecting inventory accounting from the perspective of management accounting 100

3.3 Conditions for implementing solution 103

3.4 Limitations of the thesis 105

CHAPTER 3 CONCLUSION 106

CONCLUSION 107

REFERENCES APPENDIX

LIST OF ABBREVIATIONS

Abbreviations

Full text
Financial Statements	Financial report
BTC	Ministry of Finance
BVMT	Environmental protection
CĐKT	Balance sheet
CMKT	Accounting standards
CKTM	Trade discount
DNSX	Manufacturing enterprise
DNTM	Commercial enterprise
VAT	Value added
HTK	Inventory
KKDK	Periodic inventory
KKTX	Regular declaration
International Economics	Management accounting
KTTC	Financial Accounting
TK	Account
TT	Circular
TTDB	Special consumption
Fixed assets	Fixed assets
SPS	Number of occurrences
Production and business	Production and business
IAS	International Accounting Standards
VAS	Vietnam Accounting Standards

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Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. 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