1.2.4 Accounting for revenue and financial operating expenses
1.2.4.1 Accounting for financial activity revenue
Financial revenue is revenue from interest, royalties, dividends, distributed profits and other financial revenue in the enterprise. Financial revenue includes:
- Interest: Loan interest, bank deposit interest, deferred payment interest, installment payment interest, etc.
- Dividends and profits are shared.
- Income from securities trading investment activities.
- Income from recovery and liquidation of joint venture capital contributions, investments in associated companies, investments in subsidiaries, and other capital investments.
- Income from other investment activities.
- Exchange rate interest.
- Interest difference from selling foreign currency.
- Capital transfer.
- Other financial revenue.
Documents used:
- Receipt, payment voucher.
- Debit note, credit note.
- Other relevant documents.
User account:
Account 515 “Financial activity revenue”
In debt
Account 515 | Have | |
- VAT payable calculated by direct method (if any). - Carry forward financial operating revenue Purely transferred to account 911. | - Financial revenue arising during the period. | |
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(Account 515 has no ending balance)
Accounting methods for some main transactions:
Account 515 | Account 111, 112, 113 | |
End of period financial operating revenue transfer main | Interest on deposits, interest on loans, interest on bonds, dividends | |
Account 1112, 1122 | Account 1111, 1121 | |
Sell foreign currency | ||
(Book rate) | (Actual exchange rate) | |
Foreign exchange profit | ||
Account 1112, 1122 | TK 152, 153, 156, 211, 241, 642 | |
Purchase of materials, goods, fixed assets, services service | ||
in foreign currency | Actual exchange rate | |
Exchange rate interest | ||
Account 211 | ||
Use dividends, profits are distributed capital contribution | ||
Account 331 | ||
Cash discount earned due to purchase | ||
Account 413 | ||
Carry forward of exchange rate gains due to rating revaluation of ending balance of business operations | ||
Account 3387 | ||
Amortization of interest on sales on credit, interest received in advance | ||
Diagram 1.5 Accounting for financial activity revenue
1.2.4.2 Financial cost accounting
Financial expenses are financial operating expenses including expenses or losses related to financial investment activities, costs of lending and borrowing capital, costs of contributing capital to joint ventures and associations, losses on transferring short-term securities, costs of selling securities; provisions for devaluation of trading securities, provisions for losses on investments in other entities, losses arising from selling foreign currencies, exchange rate losses, etc.
Includes the following contents:
- Interest expense payable, interest on purchases made in installments.
- Payment discount enjoyed.
- Loss from sale of securities.
- Provision for short-term and long-term investment depreciation.
- Exchange rate loss difference…
Documents used:
- Payment voucher
- IOU
- Other relevant documents
User account:
Account 635 “Financial expenses”
In debt
Account 635 | Have | |
Expenses of financial investment activities incurred during the period. | - Reversal of provision for devaluation of securities investment. - Transfer financial expenses to account 911. | |
(Account 635 has no ending balance)
Accounting method:
Account 413 Account 635 Account 2291, 2292
Handling exchange rate losses due to revaluation of foreign currency items at the end of the period and financial expenses
Reversal of the difference in provision for devaluation of securities investment and loss on investment in other entities
Account 221, 222, 228 Account 911
Losses on investments End of period financial expense transfer
Account 111, 112
Proceeds from sale of investments
Account 2291, 2292
Joint venture operating costs
Provision for stock price decrease and provision for investment loss in other entities
Account 111, 112, 331
Payment discount for buyers account 111, 112,
335, 242,…
Interest payable on loans, interest allocation on purchases on deferred payment and installment payments
Account 1112, 1122 Account 1111, 1121
Sell foreign currency
Loss on foreign currency sales accounts 152, 156, 211,
642, 641
Purchase of materials, goods and services in foreign currency
Exchange rate loss
Payment of liabilities in foreign currency
Account 331, 336, 341
Account 131, 136, 138
Collection of receivables in foreign currency accounts 1112, 1122
Figure 1.6 Financial cost accounting
1.2.5 Accounting for sales costs
Selling expenses are used to reflect actual expenses incurred in the process of selling products, goods, and providing services, including costs of offering, introducing products, advertising products, sales commissions, product and goods warranty costs (except construction activities), preservation, packaging, transportation costs, etc.
Documents used:
- VAT invoice
- Fixed asset depreciation calculation and allocation table.
- Salary and social insurance allocation table.
- Allocation table of raw materials, tools and equipment.
- Payment vouchers, debt notices, etc.
User account:
Account 641 “Cost of sales”: Includes level 2 accounts:
- Account 6411 “Employee costs”
- Account 6412 “Cost of materials and packaging”
- Account 6413 "Tools and supplies costs"
- Account 6414 “Fixed asset depreciation expense”
- Account 6415 “Warranty costs”
- Account 6417 “Outsourced service costs”
- Account 6418 “Other cash expenses”
Debit account 641 Credit
- Costs incurred in connection with the sale, consumption of goods, products, and provision of services
- Transfer selling expenses to account 911
(Account 642 has no ending balance)
Accounting method:
Account 111, 112
152, 153, 242 Account 641 Account 111, 112
Cost of materials and tools Revenue and expenditure reduction account 133
Account 334, 338 Account 911
Salary costs and salary deductions
Account 214
Carry forward cost of sales
Fixed asset depreciation costs
Account 352 Account 352
Provision for payable warranty costs for goods and products
Account 242, 335
- Allocated costs
- Prepaid expenses account 152, 153,
155, 156
Finished products, goods, promotional services, advertising, internal consumption; gifts for customers outside the enterprise
Account 331, 131
Outsourced services; Other cash expenses; Commission expenses
TK 133
Reversal of provisions payable for product and goods warranty costs
VAT
Account 338
Input VAT is deductible if included in cost of sales.
Amount payable to the export consignee for payments related to consignment goods
TK 133
VAT
Figure 1.7 Cost of sales accounting
1.2.6 Business management cost accounting.
Business management costs are all costs related to business management, administrative management and general operations of the entire enterprise.
Accounting documents used:
- Salary allocation table and salary deductions.
- Allocation table of raw materials, tools and equipment.
- Fixed asset depreciation calculation and allocation table.
- Payment voucher, VAT invoice, debt notice
Accounting books used:
- Ledger, account detail book 642
- General journal
User account:
Account 642 "Business management expenses", including detailed accounts:
- Account 6421: Management staff costs
- Account 6422: Management material costs
- Account 6423: Office supplies costs
- Account 6424: Fixed asset depreciation expense
- Account 6425: Taxes, fees and charges
- Account 6426: Provision expenses
- Account 6427: Cost of outsourced services
- Account 6428: Other cash expenses
In debt
Account 642 | Have | |
- Actual business management costs incurred during the period; - Provision for doubtful debts, provision for payables (The difference between the provision to be established this period is greater than the provision established in the previous period but not fully used); - Unemployment benefit provision. | - Reversal of bad debt provision, payable provision (The difference between the provision to be established this period is less than the unused provision established in the previous period); - Transfer business management costs to Account 911 "Determination" business results”. | |
(Account 642 has no ending balance)
Accounting method:
152, 153, 242,
331
Account 111, 112Account 642 | Account 111, 112 | ||
Cost of materials and tools | Revenue reduction expenses | ||
TK 133 | |||
Account 334, 338 | Account 911 | ||
Salary costs and deductions wage | Carry over management costs business | ||
Account 214 | |||
Fixed asset depreciation costs | |||
Account 352 | Account 352 | ||
Provision for Restructuring Payables business, other payables | Reversal of provision for return of receivables corporate structure, other payable provisions | ||
Account 242, 335 | |||
Amortized costs, payable costs before | |||
Account 2293 | Account 2293 | ||
Provision for doubtful debts | Reversal of the difference between the unused provision for bad debts of the previous year being greater than the provision for bad debts of this year | ||
Account 111, 112, 153, 141, 331, 335 | |||
Outsourced services, other cash expenses other | |||
TK 133 | |||
VAT | Input VAT is not deductible. | ||
Account 333 | |||
Business license tax, land rent payable State budget | |||
Account 155, 156 | |||
Consumer products, goods, services internal for business management | |||
Figure 1.8 Business management cost accounting