285. TOPIC “ACCOUNTING FOR SALES AND BUSINESS RESULT IN PHU THO EDUCATIONAL BOOK AND EQUIPMENT JOINT STOCK COMPANY”

MINISTRY OF FINANCE
ACADEMY OF FINANCE

STUDENT: LE KIM THOA
CLASS: CQ 54/21CL02

GRADUATION THESIS
TOPIC: “ACCOUNTING FOR SALES AND BUSINESS RESULT IN
PHU THO EDUCATIONAL BOOK AND EQUIPMENT JOINT
STOCK COMPANY”

Major: Business Accounting
Code: 21
Supervisor : Tran Thi Ngoc Diep, MAc

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DECLARATION
I hereby declare that this thesis is my own work and effort and that has
not been submitted anywhere for any award. Where other sources of
information have been used, they have been acknowledged.
The data and results described in the thesis are derived from the actual
situation of the practice company.
Hanoi,

May, 2020

Student

Le Kim Thoa

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PREFACE
In order to survive and develop in a market economy, there is the
management of the socialist-oriented state. Any business, whether it is
business or commercial, must go through consumption and be effective as a
top target. To do that, managers must be aware of the role of accounting.
Accounting is the source of information needed to effectively manage the
company's economic performance.
Commercial business objects are goods that are labor products purchased
by commercial enterprises to sell in order to meet the needs of consumer
production and export. Enterprises that want to have revenue must have
goods. But the value and value of use can only be done through the
consumption process. Sales are the final stage of the reproduction process.
Good implementation of sales will facilitate the recovery of capital and offset
the cost of production. On the other hand, create conditions for businesses to
well fulfill their obligations to the state budget for investment and
development, improve workers' lives ... More than ever, perfect revenue
accounting, expenses and determine operational results. Business dynamics
are often a problem for businesses. Completion of revenue accounting, cost
and determination of business results will contribute to increasing
competitiveness, improving the quality of business decisions, increasing
financial information transparency.
Currently accounting is an important tool for managing the economy both
micro and macro. Through the internship at Phu Tho educational book and
equipment, JSC, I am particularly interested in the process of consuming
goods, identifying and distributing the business results of the company, so I
choose the part “Accounting for sales and business result in

educational book and equipment, JSC. ”for my graduation thesis.
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Phu Tho


Although I tried to understand and receive the enthusiastic help of the
Board of Directors, the staffs the accounting department along with the
teacher's instructions - Dr. Tran Thi Ngoc Diep, I have grasped gain a part of
the actual situation of accounting for sales and determine the business results
at Phu Tho educational book and equipment joint stock company.
In addition to the introduction and conclusion, my topic has 3 chapters:
CHAPTER 1: GENERAL THEORETY OF SALES ACCOUNTING AND
EVALUATION

BUSINESS

RESULTS

IN

COMMERCIAL

ENTERPRISES
CHAPTER 2: THE ACTUAL ACCOUNTING FOR SALES AND
BUSINESS RESULT IN PHU THO EDUCATIONAL BOOK AND
EQUIPMENT JOINT STOCK COMPANY.
CHAPTER 3: SOLUTIONS TO COMPLETE SALES ACCOUNTING
AND DETERMINING BUSINESS RESULT AT PHU THO
EDUCTIONAL BOOK AND EQUIPMENT JOINT STOCK COMPANY

However, due to the limited level of reasoning and practical access, my
topic is inevitable. I look forward to receiving comments from the teachers, so
that my topic will be improved.

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TABLE OF CONTENT
CHAPTER 1: GENERAL THEORETY OF SALES ACCOUNTING
AND EVALUATION BUSINESS RESULTS IN COMMERCIAL
ENTERPRISES
1.1 Overview of sales process:
1.1.1 Definition
1.1.2 Characteristics of sales process:
1.1.3 Methods of sales
1.1.4 Payment methods
1.1.5 The task of accounting for sales and determining business results
1.1.6 Accounting for sales revenue:
1.1.7 Accounting for sales deduction
1.1.8 Accounting for Cost of goods sold
1.2 Evaluating business result
1.2.1 Accounting for selling expenses and administrative expenses
1.2.2 Accounting for financial expenses and financial incomes
1.2.3 Accounting for others expenses and other incomes
1.2.4 Accounting for corporate income tax expenses
1.2.5 Accounting for determining business results
1.2.6 Accounting for revenue and business results in terms of accounting
software application
CHAPTER 2: THE ACTUAL ACCOUNTING FOR SALES AND
BUSINESS RESULT in PHU THO EDUCATIONAL BOOK AND

EQUIPMENT JOINT STOCK COMPANY.
2.1 The foundation and development process of company
2.1.1 Overview of the company
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2.1.2 Foundation and development
2.1.3 Characteristics of business operation
2.1.4 The corporate management organization
2.1.5 The organization of accounting works in the company
2.2. The actual accounting for sales and business results in Phu Tho
educational book and equipment joint stock company.
2.2.1. Actual situation of methods of sales and payment at the company
2.2.2. Accounting for sales revenue and revenue deductions
2.2.3 Accounting for costs of goods sold
2.2.4 Accounting for selling and administrative expenses
2.2.5 Accounting for financial expenses and financial incomes
2.2.6 Accounting for other incomes and other expenses
2.2.7. Accounting for determining business results
2.3.General comments on sales finance accounting and determining
business results at Phu Tho educational book and equipment, JSC.
2.3.1 Advantages
2.3.2 Limitations
CHAPTER 3: SOLUTIONS TO COMPLETE SALES ACCOUNTING
AND DETERMINING BUSINESS RESULT AT PHU THO
EDUCTIONAL BOOK AND EQUIPMENT JOINT STOCK COMPANY
3.1 Requirements, principles of completing accounting for sales and
determining business results at Phu Tho educational book and
equipment, JSC.
3.1.1 Requirements

3.1.2 Perfecting principles
3.2. Some suggestions to improve sales accounting and determining
business results at Phu Tho educational book and equipment, JSC.
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LIST OF DIAGRAM
Flowchart 1.1: Accounting entry for direct sales (applying deductible VAT
method).
Flowchart 1.2 : Accounting entry for direct sales for company applying direct
VAT method
Flowchart 1.3 : Accounting entry for sales through agents
Flowchart 1.4 : Accounting entry for sales in case of deferred or instalment
payment
Flowchart 1.5 Accounting entry for revenue deductions
Flowchart 1.6 : Accounting for COGS applying perpetual inventory method
Flowchart 1.7 : Accounting for COGS applying periodical inventory method.
Flowchart 1.8 : Accounting entry for selling expenses
Flowchart 1.9 : Accounting entry for selling and administrative expenses
Flowchart 1.10 : Accounting entry for financial expenses
Flowchart 1.11 – Accounting entry for other incomes
Flowchart 1.12: Accounting entry for other expenses
Flowchart 1.13 – Accounting entry for other incomes
Flowchart 1.14 – Accounting entry for other incomes from the liquidation or
sale of fixed assets
Flowchart 1.15 : Accounting entry for income tax expense
Flowchart 1.16 : Accounting entry for business result
Flowchart 2.1:Management apparatus
Flowchart 2.2: Accounting apparatus

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IMAGE CATALOG
Figure 2.1: Display screen of “Quản lý kế hoạch- phát hành”
Figure 2.2: Display screen of “ Kế toán 2019”
Figure 2.3: Examples of list of textbook
Figure 2.4: VAT invoice
Figure 2.5: Inventory list
Figure 2.6: Delivery invoice on “ Quản lí kế hoạch- phát hành”
Figure 2.7: The interface of entering sales invoice on “ Kế toán 2019”
Figure 2.8: General ledger of Account 511
Figure 2.9: Table trade discount rate
Figure 2.10: VAT invoice No 002611
Figure 2.11: Inventory list
Figure 2.12:General ledger of account 521
Figure 2.13:General ledger of account 632
Figure 2. 14 Payment order
Figure 2.15: General ledger of account 641
Figure 2.16: Water bill
Figure 2.17: The interface of entering payment voucher
Figure 2.18: Electricity bill
Figure 2.19: The interface of entering electricity invoice on “ Kế toán 2019”
Figure 2.20: Payment order
Figure 2.21:Table of salary distribution and social insurance
Figure 2.22: Depreciation table of fixed assets
Figure 2.23. General ledger of Account 635 – Financial expenses
Figure 2.24: General ledger of Account 515 – Financial incomes
Figure 2.25: The interface to transfer revenue and determine business results
on “ Kế toán 2019”

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Figure 2.26: General ledger of Account 911
Figure 2.27: General ledger of Account 4212

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CHAPTER 1: GENERAL THEORETY OF SALES ACCOUNTING
AND EVALUATION BUSINESS RESULTS IN COMMERCIAL
ENTERPRISES
1.1 Overview of sales process:
1.1.1 Definition
Sales is the transfer of ownership of a product or goods associated with most
of the benefits, or risks to customers, and the customers make payment or
accept payment.
1.1.2 Characteristics of sales process:
Sales process is the process of exchanging ownership, between buyers and
sellers in the operating market. Goods sold to individuals and organizations
outside the enterprise are called external sales, while goods supplied to units
within the same company or corporation are referred to as internal sales. Sale
is the final stage in the business operation of a commercial enterprise.
1.1.3 Methods of sales
Trading activities of commercial enterprises can be done through two
methods:
wholesale and retail.
1.1.3.1 Wholesale
Wholesale : is a form of selling goods in batches or in large quantities. In
fact, buyers are intermediate suppliers, wholesale goods have not reached

consumers directly. Wholesale is conducted by two main ways: wholesale
goods through warehouses and wholesale direct shipping goods.
 Wholesale in stock:
Under this method, purchased goods are put into warehouse, then sold at
warehouse. The method of selling goods in stock has two forms:

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- Direct form: enterprises deliver goods directly to customers at warehouses
or goods preservation places of enterprises. The goods are recorded as sold
when the buyer has received them and sign the confirmation on the sales
invoice.
- Delivery form: the seller will transfer the goods to the buyer’s warehouse or
to a location specified by the purchaser. Goods is considered to be sold when
the buyer has received the goods and paid or accepted to pay for the goods
received.
 Wholesale by shipping directly:
Commercial enterprises after purchasing and receiving goods do not bring
them
back to their warehouse, but sell them directly to the buyer. With this form,
businesses also have two forms: direct delivery or indirect delivery.
- Direct delivery: The enterprise received goods from the seller and deliver
directly to its customer. Goods is considered to be sold when the buyer
received all the goods and signed on sale invoice.
- Indirect delivery: The enterprise received goods from the seller and transfer
these goods to its customer. Goods is considered to be sold when the customer
check and paid or accepted to pay for the goods received.
1.1.3.2 Retail:
It is a method of selling goods and services in small quantities and often

stable
prices. This method usually applies directly to consumers of such goods and
services. Retail has various forms of implementation than wholesale.
 Retail direct money collection: customers pay money, sellers deliver
goods to customers.
 Centralized collection of sales: the customer pays money to the cashier
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and receives the invoice to receive the goods at the delivery counter.
 Sales in the form of customers’ choice: customers choose items
purchased in supermarkets and pay at the cashier counters.
 Sending agents, consignment agents: selling businesses sign contracts
with agents, deliver them goods to sell and pay them commissions.
1.1.4 Payment methods
Payment method is a method of performing property obligations. Payment
may be made by cash, check, bank payment, letter of credit, commodity
Exchange or agreement of the parties.
The method may be paid in one time, more times or periodically ... or
depending on agreement by the parties.
Normally, it is done in two forms: direct payment and deferred or installment
payment.
 Direct payment method: customers pay immediately for enterprises
after
receiving goods, without sending it through a third party.
 Deferred payment method: enterprises only collect part of
money that customers have to pay, customers will gradually pay the rest and a
certain amount of interest. Deferred payment arrangements are often used in
retail sales.
1.1.5 The task of accounting for sales and determining business results

1.1.5.1 The necessity of accounting for sales, determining business results
Sales and determining business results play an important role not only for
businesses but also for the entire national economy. For the enterprise itself, it
is possible to earn income to compensate for the costs and conditions to
expand the business, to improve the lives of workers, to create a source of
accumulation for the national economy. Accurate determination of business
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results is the basis for determining the operational efficiency of enterprises
through the payment of taxes, fees and charges into the state budget;
determining the reasonable costing structure and highly effective using of the
profits earned to harmonize economic benefits.
Accounting for sales and determining business result is an important task
of the enterprise in order to determine the quantity and value of sold goods as
well as the turnover and business results of the enterprise. However, in order
to bring into full play the role of well performing the tasks, it is necessary to
organize accounting work in a scientific way, and at the same time,
accountants must firmly grasp the contents of sales accounting and
determination of business results in enterprises
1.1.5.2 The missions of accounting for sales, determining business results
With an aim to managing sales and evaluating business result, accounting
for sales and determining business results has some missions as below:
- Fully, timely, accurately reflecting and recording occurred transactions and
movements of each type of goods and products under quantity, quality, model
and value.
- Fully, timely, accurately reflecting and recording sales, sales deductions and
expenses of each business activity, as well as following and supervising
customer receivables.
- Accurately calculating and reporting results of each transaction.

- Monitoring the implementation of state obligations and division process of
business result.
- Interpreting accounting reports to information users. Accounting information
must be reliable, easy-to-read and useful.
Accounting for sales and determining business result must follow the
accounting
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standards and able to adapt to the status of the company’s accounting system.
1.1.6 Accounting for sales revenue:
 Definition:
The concept of revenue according to VAS standard 14 “Turnover and other
income are the total value of economic benefits of the enterprise earned in the
accounting period, arising from normal production and business activities and
other activities of the enterprise, contributing to increasing equity, excluding
capital of shareholders or owners ”.
 Revenue recognition principles:
- Sales of goods are recognized when all of the following five conditions are
simultaneously met:
(a) The enterprise has transferred substantially all risks and benefits of
ownership of the product or goods to the buyer;
(b) The Company retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods
sold;
(c) The revenue is determined reliably;
(d) The enterprise has gained or will gain economic benefits from the sale;
(e) Determine the costs associated with the sale.
- The service revenue of a transaction is recognized when the outcome of that
transaction can be reliably determined. Where a transaction involving the

rendering of services is attributable to several periods, revenue is recognized
in each period by reference to the percentage of completion of the transaction
on the date of making balance sheet. The outcome of a transaction can be
measured reliably when all four (4) following conditions are satisfied:
(a) The revenue is determined reliably;
(b) Be able to derive economic benefits from the provision of that service;
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(c) Determine the amount of work completed on the balance sheet date;
(d) Determine the costs incurred for the transaction and the cost to complete
the transaction to provide that service.
In cases where a service provision transaction is conducted in many
accounting periods, the determination of the turnover of a service in each
period is usually made according to the completion rate method. By this
method, the revenue recognized in the accounting period is determined by the
proportion of the completed work.
The completed work is determined by one of the following three methods,
depending on the nature of the service:
(a) Assess completed work;
(b) Comparing the percentage (%) between the completed workload and the
total workload to be completed;
(c) The ratio (%) of expenses incurred to the total estimated cost of
completing the entire service delivery transaction.
The completed work does not depend on recurring payments or advances by
customers.
- Revenue from interests, royalties, dividends and shared profits of an
enterprise is recognized when both (2) of the following conditions are
satisfied:
(a) Be able to obtain economic benefits from the transaction;

(b) The revenue is determined reliably.
 Accounting vouchers:
- VAT invoice
- Payment voucher of goods on consignment.
- Bill
- Contract
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- Other invoices
 Accounts used:
- Account 511 “ Sales”
Content: This account is used to record sales of goods and services of
enterprise in an accounting period, including sales of goods, products and
services provided to parent companies and subsidiaries in the same group
in the accounting period.
This account reflects the turnover of production and business activities
from the following transactions and operations:
+ Sales: Selling products manufactured by enterprises, selling goods
purchased and investment real estate;
+ Service provision: Performing the agreed work under a contract, or
multiple accounting periods, such as provision of transportation, tourism,
fixed asset.
+ Other revenues.
- Structure:
-

Acc 511
Payable indirect taxes (VAT,
- Revenues from sales of products,

excise, export, environmental
goods, real estates invested and
protection);
service provision of enterprises
Turnover from returned goods
performed in accounting period
transferred at the end of period;
Discounts transferred at the end
of period;
Transfer of net turnover to acc
911.
Account 511 does not have closing balance and it comprises 4 sub –
accounts:
+ Account 5111: Turnover from sales.
+ Account 5112: Turnovers from finished goods.
+ Account 5113: Turnovers from service provision.
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+ Account 5118: Other turnovers.
- Account 3331: Payable VAT
 Accounting entries
Flowchart 1.1: Accounting entry for direct sales (applying
deductible VAT method).

Flowchart 1.2 : Accounting entry for direct sales for company applying
direct VAT method
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Acc 3331

Acc 511
VAT payable

Acc 111,112,131

Total price with VAT

Flowchart 1.3 : Accounting entry for sales through agents

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Flowchart 1.4 : Accounting entry for sales in case of deferred or
instalment payment

1.1.7 Accounting for sales deduction
 Definition
Sales deductions include: Trade discount, Cash (or Settlement) discount
and Sale return.
- Trade discount is the amount of money that enterprise credited or paid
to customers who bought goods and services in large volume in accordance
with the agreement that the seller will give trade discount to the buyer.
- Sales return is the amount of goods sold which have subsequently
been returned due to the following reasons: breaching the commitment or the
economic contract, or in a wrong quantity, quality or specifications.
- Sales allowance is a reduction made when the goods are not the same
specification as those mentioned in the economic contract.
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Accountants must monitor in detail trade discounts, cash discounts, and
sales returns for each customer and each type of goods sold, such as: sales
(products, goods), service provisions. At the end of period, transferring all to
account 511 - "Revenue from sales of goods and services" to determine the
net revenue of products, goods and services earned in the reporting period.
 Accounting vouchers
Sales discounts:
- VAT invoice or sales invoice
- Economic contracts
Sales allowances:
- Minutes of sales allowances
- Sales allowances invoice
- Accounting voucher of sales allowances
Sales returns:
- Minutes of goods return
- VAT invoice or sales invoice
- Goods receipt
- Accounting voucher of sales returns
 Accounting used
Account 521: Revenue deduction
- Number of commercial discounts accepted to pay customers;
- Number of sales discounts approved for the buyer;
- Sales of returned goods, money returned to the buyer or deducted from
customer receivables for sold products and goods
- At the end of the accounting period, carry over all trade discounts, sales
rebates, sales of returned goods to account 511 "Sales of goods and rendering
of services" to determine net revenue of reporting period.
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Account 521 does not have closing balances
Revenue deduction are those amounts that are adjusted to reduce the turnover
of the sale of goods, products and services provided by the enterprise in the
accounting period. Includes: Sales discounts, Sales returns and Sales
allowances.
- Trade discounts: are the amount discounts for the buyer who buy
merchandises with large volume
- Sales returns: are the revenue of products, goods, and services returned by
the buyers because of poor quality.
- Sales allowances: are the sales allowances for the purchaser because
products, goods, services provided have poor quality which does not meet the
quality conditions specified in the contract signed between two parties.
 Accounting entry:
Flowchart 1.5 Accounting entry for revenue deductions

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1.1.8 Accounting for Cost of goods sold
1.1.8.1 Definition
The cost of goods sold at the manufacturing enterprise is the actual
production cost of goods sold or the actual production cost of the finished
product. For commercial enterprise, the cost of goods sold is the actual value
of goods sold and the purchase costs allocated to the number of goods sold.
According to VAS 02, cost of goods sold shall be calculated by the following
methods:
-

Specific identification method: this method tracks the actual physical

flow of the goods. Each item of inventory is marked, tagged or coded with its

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“specific” unit cost. This method is possible when a business has a limited
variety of high-unit-cost items that can be clearly identified.
- Average cost method ( AVCO) : The average price of all the goods in stock,
regardless of purchase date, is used to value the goods sold. Taking the
average product cost over a time period has a smoothing effect that prevents
COGS from being highly impacted by extreme costs of one or more
acquisitions or purchases.
Average cost method ( AVCO) includes AVCO Periodic and AVCO
Perpetual
+ AVCO Periodic: By the end of the period, the value of goods sold in the
period will be calculated.
(Value of goods at the
Value of goods purchased
+
beginning of the period
during the period)
Weighted
average unit = (Number of inventory at
Number of goods
cost
the beginning of the
+ purchased during the
period

period)
+ AVCO Perpetual: After each purchase, redefining the real value of inventory
and the average unit cost.
Weighted
average
unit cost
of the ith
sale
-

(Value of goods at the
beginning of the period
=

+

(Number of inventory at
+
the beginning of the period

Value of goods purchased
before the ith sale)
Number of goods purchased
before the ith sale)

First-in, First-out method ( FIFO): The earliest goods to be purchased or

manufactured are sold first. Since prices tend to go up over time, a company
that uses the FIFO method will sell its least expensive products first, which
translates to a lower COGS than the COGS recorded under LIFO. Hence, the

net income using the FIFO method increases over time.
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COGS during
=
the period

Cost of goods
left at the
+
opening of the
period

Cost of goods
increased
during the
period

-

Cost of goods
left at the
closing of the
period

1.1.8.2 Accounting for Cost of goods sold ( COGS)
 Accounting vouchers
- Goods record
- Goods receipt, goods issue

- VAT invoice
 Accounts used
Account 632 “Cost of goods sold”
- Content: This account is used to record cost of goods, products,
services, investment property, costs of production of construction
products, etc.
Structure:
In case business applies perpetual inventory method.
Acc 632
- Costs price of products,
goods, services sold during
period.
- Costs of raw materials, part
of labor costs in excess of
normal level, and fixed
overhead cost unallocated
and added to costs of
goods during the period.
- Waste, loss of inventory
after excluding
compensation received
from responsible
individuals.
Account 632 does not have closing balances.

- Transferring cost of
products, goods, services
sold to acc 911
- Sales returns to be stored
- Trade discounts, sales

allowance received after
purchasing consumed
goods.

In case business applying periodical inventory method.
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Acc 632
- Transferring actual cost of
- Transferring actual cost
finished products in the
of finished products at
first period.
the end of the period.
- Transferring forward the
- Transferring the actual
actual cost value of sold
capital value of the goods
goods sent beginning.
sold at the end of the
- Transferring the actual
period.
value of sold goods.
- Transferring the actual
value of sold goods to
determine business
results.
Account 632 does not have closing balances
 Accounting entries:

Flowchart 1.6 : Accounting for COGS applying perpetual
inventory method

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