[Luận văn bằng tiếng anh - GRADUATION THESIS] ACCOUNTING FOR SERVICE PROVISION AND DETERMINING BUSINESS RESULTS AT VINASINCO JOINT STOCK COMPANY – HANOI

BỘ TÀI CHÍNH
HỌC VIỆN TÀI CHÍNH
--------------------

GRADUATION THESIS
ACCOUNTING FOR SERVICE PROVISION AND DETERMINING
BUSINESS RESULTS AT VINASINCO JOINT STOCK COMPANY – HANOI

Major

: Business Accounting

Supervisor: PhD. Thai Ba Cong
MSc. Nguyen Ba Linh

HÀ NỘI – 2022


Graduation Thesis

Academy of Finance

ACKNOWLEDGEMENTS
Without assistance, it would be impossible to complete a study. As a result, I'd
want to convey my appreciation for the encouragement and motivation I
received while doing this study as part of the requirements for my accounting
degree.
To begin, I want to express my gratitude to my supervisors, PhD. Thai Ba
Cong and MSc. Nguyen Ba Linh, for their assistance and support. They have
been a consistent source of support and wisdom throughout the duration of my
thesis. Without their motivation and guidance, the thesis would have been

impossible to complete satisfactorily.
With the assistance of all of the company's accountants and divisions, I
completed my thesis as part of the project: Accounting for service provision
and determining business results at Vietnam Urban Services and Investment
Joint Stock Company. I'd want to convey my gratitude to Mrs. Truong Thi
Thanh Thuy, Chief Accountant of the Vietnam Urban Services and Investment
Joint Stock Company, for her invaluable advice and assistance throughout my
internship.
My heartfelt appreciation goes out to my parents for their unwavering
encouragement and support during my studies.

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Graduation Thesis

Academy of Finance

STATUTORY DECLARATION
I now formally certify that this submitted Bachelor Thesis was authored
entirely by me and also with the help of PhD. Thái Bá Công and MSc.
Nguyễn Bá Linh. I also certify that I did not rely on any other external
sources, except for the literature cited and sources listed at the conclusion of
this work.
All of the literature and additional sources that was used to produce this
academic paper, both verbatim and in substance, were noted and separately
listed.
Hanoi, Dec 7th, 2021
Student

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Graduation Thesis

Academy of Finance

LIST OF ABBREVIATIONS
Abbreviation

Full phrase

Acc

Account

VINASINCO

Vietnam Urban Services and
Investment

CIT

Corporate income tax

COGS

Cost of goods sold

JSC

Joint Stock Company

No.

Number

VAT

Value added tax

VND

Vietnam Dong

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Graduation Thesis

Academy of Finance

TABLE OF CONTENTS
ACKNOWLEDGEMENTS....................................................................................1
STATUTORY DECLARATION...........................................................................2
LIST OF ABBREVIATIONS.................................................................................3
TABLE OF CONTENTS........................................................................................4
INTRODUCTION...................................................................................................9
1.

The urgency of the topic...............................................................................9

2.

Objective of the study.................................................................................10

3.

Object and Scope of the study....................................................................10

4.

Methods of the study...................................................................................10

5.

Organization of the study............................................................................11

CHAPTER 1: BASIC THEORY OF SERVICE PROVISION ACCOUNTING
AND DETERMINATION OF BUSINESS RESULTS IN ENTERPRISES....12
1.1.

THE NECESSITY OF ACCOUNTING FOR SERVICE PROVISION

AND THE DETERMINATION OF BUSINESS RESULTS IN ENTERPRISES
12
1.1.1.

General overview of service provision and determination of business

results 12
1.1.2.

Characteristics of service provision accounting and determining

business results................................................................................................13
1.1.3.

The role of service provision accounting and determining business

results 14
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Graduation Thesis
1.2.

Academy of Finance

ACCOUNTING FOR BUSINESS EXPENSES IN SERVICE

PROVISION BUSINESS....................................................................................16
1.2.1.

Accounting for revenue from services provision and revenue

deductions........................................................................................................16
1.2.2.

Accounting for Cost of Goods Sold..................................................23

1.2.3.

Accounting for selling expenses and administration expenses.........24

1.2.4.

Accounting for financial incomes and financial expenses................28

1.2.5.

Accounting for other incomes and other expenses............................31

1.2.6.

Accounting for corporate income tax expense..................................32

1.2.7.

Accounting for financial activities income........................................34

1.2.8.

Accounting for other income.............................................................37

1.2.9.

Accounting for determining business results....................................39

1.3.

ORGANIZATION OF ACCOUNTING BOOKS SYSTEM..................42

1.3.1.

General Journal method.....................................................................42

1.3.2.

Journal – Ledger method...................................................................45

1.3.3.

Journal – Vouchers method...............................................................46

1.3.4.

Book-keeping Documents method....................................................49

1.3.5.

Computerized Accounting Method...................................................49

CHAPTER 1 CONCLUSION..............................................................................52
CHAPTER 2: CURRENT SITUATION OF ACCOUNTING FOR SERVICE
PROVISION AND DETERMINATION OF BUSINESS RESULTS AT

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Graduation Thesis

Academy of Finance

VIETNAM URBAN SERVICES AND INVESTMENT JOINT STOCK
COMPANY............................................................................................................53
2.1.

GENERAL OVERVIEW OF VIETNAM URBAN SERVICES AND

INVESTMENT JOINT STOCK COMPANY (VINASINCO)...........................53
2.1.1.

Company information and development...........................................53

2.1.2.

Characteristics of production and business organization..................55

2.1.3.

Organizational management characteristics at the company.............55

2.1.4.

Organizational characteristics of accounting work in the company..58

2.2.

SERVICE PROVISION EXPENSES ACCOUNTING REALITY AND

DETERMINING BUSINESS RESULTS AT VINASINCO JSC......................65
2.2.1.

Accounting for cost of goods sold.....................................................65

2.2.2.

Accounting for selling expenses and administration expenses.........66

2.2.3.

Accounting for financial expenses....................................................76

2.2.4.

Accounting for other expenses..........................................................76

2.2.5.

Accounting for corporate income tax expenses.................................78

2.3.

SERVICE PROVISION REVENUE ACCOUNTING REALITY AT

VINASINCO JSC................................................................................................78
2.3.1.

Accounting for service provision revenue.........................................78

2.3.2.

Accounting for revenue deductions...................................................83

2.3.3.

Accounting for other incomes...........................................................83

2.3.4.

Accounting for determining business results....................................87

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Graduation Thesis
2.4.

Academy of Finance

Evaluate the current status of Service Provision Accounting and

determine business results at VINASINCO JSC.................................................91
2.4.1.

Strength..............................................................................................91

2.4.2.

Weakness...........................................................................................93

CHAPTER 2 CONCLUSION..............................................................................95
CHAPTER 3: SUGGESTIONS TO IMPROVE ACCOUNTING FOR
SERVICE PROVISION AND DETERMINE BUSINESS RESULTS AT
VIETNAM URBAN SERVICES AND INVESTMENT JOINT STOCK
COMPANY............................................................................................................96
3.1.

REQUIREMENTS, PRINCIPLES OF COMPLETING ACCOUNTING

FOR SERVICE PROVISION AND DETERMINING BUSINESS RESULTS
AT VINASINCO JSC.........................................................................................96
3.1.1.

Requirements.....................................................................................96

3.1.2.

Perfecting principles..........................................................................98

3.2.

SUGGESTIONS FOR IMPROVEMENTS OF ACCOUNTING FOR

SERVICE PROVISION AND DETERMINING BUSINESS RESULTS AT
VINASINCO JSC................................................................................................99
3.2.1.

Suggestions........................................................................................99

3.2.2.

Accounting procedure for some key transactions:..........................100

CHAPTER 3 CONCLUSION............................................................................103
CONCLUSION....................................................................................................104
REFERENCES....................................................................................................106
APPENDIX..........................................................................................................107
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Graduation Thesis

Academy of Finance

INTERSHIP SUPERVISORS’ COMMENTS..................................................111

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Graduation Thesis

Academy of Finance

INTRODUCTION
1. The urgency of the topic
The production of material wealth is considered to be one of the most important
conditions for the existence and development of the human society. Along with
the society, the production and business activities of enterprises have been

expanding and developing persistently. Nowadays, with the condition that the
economy has macro-management from the State, businesses are having a
favorable production environment: businesses are allowed to freely develop and
compete against each other with complete equality before the law; the domestic
market is also allowed to open, but it also faces a lot of difficulties from the
impact of the competition rules from the new mechanism. This is also a great
opportunity for Vietnamese businesses to recognize their real capabilities,
crafting new business strategies, and solving problems relating business and
production activities, in order to adapt and overcome the rigorous selection and
elimination process of the market.
In the process of producing activities for business, especially with a commercial
enterprise, sales are one of the most basic operations that governs other
operations. The business cycle can take place in a smooth and continuous way
when the enterprise surpasses the consumption stage with great results, which
may be the basis of creating profits for the business, where it being the core
goal of the business in the market economy. To accomplish this, businesses
need s to choose out among products, selecting the most profitable products to
trade, with the guarantee of being profitable and covers costs spent, hence
correctly determine the right business results, which helps in orienting the
business, as well as creating momentum for the enterprise’s development.
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Graduation Thesis

Academy of Finance

Recognizing the importance of sales accounting and determine business results,
applying the theory that has been studied at school, and combining it with the
reality from the accounting organization Vietnam Urban Services and

Investment Joint Stock Company, with the will to learn more about sales
accounting and determine business results, I chose the topic “Accounting for
service provision and determining business results at Vietnam Urban Services
and Investment Joint Stock Company.”
2. Objective of the study
The research purpose, is to discover the current status of sales accounting and
determine business results of Vietnam Urban Services and Investment Joint
Stock Company, therefore giving general observations on the achievements and
shortcomings in sales accounting and determining business results, from which
3. Object and Scope of the study
Object: Accounting for service provision and determination of business results
at Vietnam Urban Services and Investment Joint Stock Company.
The scope of research content will focus on accounting for service provision
and evaluating results of the revenue, selling expenses, revenue deductions, and
administration expenses, some other related expenses and incomes, accounts
used to do accounting and accounting entries in Vietnam Urban Services and
Investment Joint Stock Company within 2021
4. Methods of the study
This thesis uses the method of analyzing as the most appropriate method for the
practices of accounting for sales and defining business result at the company, as
well as analyzing the impact it has on the company’s development. Other
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Graduation Thesis

Academy of Finance

methods, such as comparison between theory and reality, is also being used to
give a proposed solution to refine sales accounting and determine business

results at Vietnam Urban Services and Investment Joint Stock Company from
2020 to 2021.
5. Organization of the study
The main content, apart from the introduction, conclusion and references, is
divided into three chapters as follows:
Chapter 1: The basic theory of accounting for service provision and
determination of business results in enterprises.
Chapter 2: Current situation of accounting for service provision and
determination of business results at Vietnam Urban Services and
Investment Joint Stock Company.
Chapter 3: Solutions to improve accounting for service provision and
determination of business results at Vietnam Urban Services and
Investment Joint Stock Company.

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Graduation Thesis

Academy of Finance

CHAPTER 1: BASIC THEORY OF SERVICE
PROVISION ACCOUNTING AND DETERMINATION OF
BUSINESS RESULTS IN ENTERPRISES
1.1.

THE

NECESSITY

OF

ACCOUNTING

FOR

SERVICE

PROVISION AND THE DETERMINATION OF BUSINESS
RESULTS IN ENTERPRISES
1.1.1. General overview of service provision and determination of business
results
 Service provision definition:
Service, unlike products, are those that provide an activity or the performance
of a task with a commercial purpose.
In a broad sense, service is the concept that refers to all activities, in which their
results do not exist in a physical form. Service activities cover all fields with a
high experience level, greatly influencing the development process of socioeconomic and environment of each country, region in particular and the whole
wide world in general. Not only service includes traditional industries such as
transportation, banking, commerce, insurance, post and telecommunications,
but it also spreads to new fields such as office services, administrative, and
consulting services.
In a narrower sense, service is to do a job for another individual or community,
is something that effectively meets a certain human need, such as
transportation, repair and maintenance of equipment, machinery, or
construction.
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Graduation Thesis

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Business results are the results of an enterprise’s production and business
activities in a certain accounting period; in other words, business results are
expressed in cash in the difference between total revenue and total expenses of
all economic activities performed. If the income is greater than the expenses,
the business result is a profit; if the income is less than the expenses, the
business result is a loss. Depending on the business characteristics and
management requirements of the business, the determination of business results
is conducted at the end of the business period such as at the end of the month,
quarter or year.
The business results from an enterprise contains the results of its ordinary
business operations, plus other activities. Moreover, their business activity
results are normally the outcome of an enterprise’s revenue-gathering activities,
specifically from selling, providing services and financing activities.
1.1.2. Characteristics of service provision accounting and determining
business results
The specific characteristics of the service business have a strong influence on
the cost, revenue and service business results, specifically:
- The results from pure service provisioning activities usually have no
specific physical form, which is instead being represented by benefits for
customers, therefore satisfying customer’s needs, such as the need of
information, mobility, and knowledge, etc.
This characteristic, however, leads to a fact that the production,
consumption and management process of business services are often
difficult to separate.

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Graduation Thesis

Academy of Finance

- Service business activities have a variety of methods to implement. For
instance, the tourism industry offers multiple ways to travel such as
domestic or international tours, or package or partial tours, etc.; for another
instance, the transportation industry also have different ways to travel such
as: road transport, air transport, or railway, …
With the diversity of methods of service implementation being mentioned,
this leads us to the diversity of management objects as well as the
complexity in organizing the accounting work in general, specifically the
organization of cost, revenue and result accounting, such as: Determining
objects for cost accumulation, revenue recognition and calculate possible
results according to each type, method, and form of service provision
business.
- In terms of business organization and management, service provision
enterprises often tend to manage business activities according to service
implementation processes or to each order. This leads to the manifold in
processing cost, revenue and business results accounting.
- Service enterprises have multiple forms of co-operating in order to support
each other in the business process, namely joint venture or association.
These types of form usually lead to the complications in general
management in general, and accounting process in particular: Accounting
for revenue and expenses, in the form of joint ventures “Business
cooperation contract in the form of jointly controlled business activities.”

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Graduation Thesis

Academy of Finance

1.1.3. The role of service provision accounting and determining business
results
Accounting in general and service provision accounting in particular have
given assistance to enterprises and State agencies to evaluate the completion
level of the scheme in terms of service costs, expense and revenue, therefore
overcoming the shortcomings and limitations in the management process. With
a reasonable organization and arrangement between phases in the process of
service provisioning, it will create a favorable condition in the service
provision accounting process and determining business results, as well as
creating an unification and consistency in the general accounting system of the
company.
In order to elevate the role of accounting in business activities management,
service provision and determining business results, it is vital to perform the
following tasks:


Reflect and record all situations of providing every type of service to

customers, as well as internal supply. It is also important to do the same for
the revenue, revenue deductions, and expenses of each activity in the
business.


Regularly follow and monitor customer’s receivables, ensuring a full

and timely collection, avoiding unreasonable appropriation of capital.


Providing professional accounting information for the preparation of

financial statements, periodically analyzing activities related to the service
provision process, determining, and delivering the results.

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Graduation Thesis


Academy of Finance

Accurately calculate and reflect the outcome of each activity, as well

as supervising the performance of obligations to the State, and the
distribution of operating results.
1.2.

ACCOUNTING FOR BUSINESS EXPENSES IN SERVICE
PROVISION BUSINESS

1.2.1. Accounting for revenue from services provision and revenue
deductions
1.2.1.1. Content of services provision
According to Vietnamese Accounting Standard No. 14 – Revenue and other
income: “Revenue is the total value of economic benefits obtained by the

enterprise in the accounting period, arising from the normal production and
business activities of the enterprise, contributing to the increase of owner’s
equity”
Service provision revenue is the total amount received or will be collected
through transactions and transactions generating revenue for customers,
including additional surcharges and fees in addition to the selling price, is
referred to as service provision revenue (if any).
Revenue from service provisioning is only recognized when the outcome of the
transaction can be measured reliably. In case the transaction of the service
provision involves many periods, revenue is recognized in the period according
to the result of the work completed on the balance sheet date of that period. The
outcome of a service transaction can be measured reliably when all four of the
following conditions are satisfied:
- The amount of revenue can be measured reliably
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Graduation Thesis

Academy of Finance

- It is feasible that the transaction will result in economic gains
- The portion of the work completed at the balance sheet date can be
measured
- The costs incurred for the transaction and the costs to complete the
transaction can be measured reliably.
Notes when determining service provision revenue:
- In case the outcome of a service provision transaction cannot be predicted
with certainty, revenue is recorded proportionally to the recognized
recoverable expenses.

- Revenue and costs associated with the transaction should be reported in the
same fiscal year.
- In case where the exchange for services for another that’s similar in nature
and value, the trade is not regarded a revenue-gathering transaction. And no
revenue is recognized.
Revenue is recognized at the fair value of amounts already collected or to be
collected in the future, specifically:
- For service enterprises that calculate and pay VAT by credit method,
service revenue is recognized according to prices of services provided that
do not include VAT
- For service enterprises that calculate and pay VAT by direct method,
service revenue is recognized according to the total payment price.
- If the service is determined to be exported and subject to export tax, the
revenue is recorded based on the total freight charge, including the export
tax.
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Graduation Thesis

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- In case a service contract is performed over several accounting periods,
service revenue is recognized using the percentage of completion method. A
service business can use the following approaches to determine the
completed work as the basis for calculating the revenue recognized in the
period:


Evaluate completed work



Comparing the percentage between the amount of work completed and the

total amount of work to be completed.


Percentage of costs incurred compared to the total estimated cost of

completing the entire service provision transaction.
- Service revenue is tracked in detail by each type of revenue in service of
revenue management to determine business results at the request of
business operations management of the unit.
- In case of receiving payment in advance for many periods: If the money
was received from customers who pay in advance for many services
provision periods, based on invoices to record unearned revenue to account
3387 – Unrealized turnover, with each period allocated to revenue
according to the matching principle.
1.2.1.2. Accounting for revenue deductions
1.2.1.2.1. Definition and contents of revenue deductions
Sales deductions such as trade discounts, sales discounts, sales refunds, direct
VAT payable, and excise and export taxes. Net sales and business outcomes
are calculated using sales deductions during the accounting period. Revenue
deductions must be reported, tracked in detail, and separately on relevant

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Graduation Thesis

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accounts to provide information to accountants for financial statement
preparation.
Trade discount: Is the amount that the selling business decreases the buyer's list
price by as a result of the customer's volume purchases.
- The value of returned items is the volume of goods sold or services given
that are returned, denied, or not paid by the consumer.
- Sales discount: A reduction given to purchasers for poor quality, incorrect
specifications, or out-of-date tastes.
- Certain taxes, such as direct VAT, excise tax, and export tax, among others.
Documents in use:
- Warehouse receipts for returned goods, discount agreement minutes,
and invoices of returns of sold goods
- Vouchers, Bank Debit notes, Tax payment documents...
Accounts in use:
- Acc 521 - Trade discounts
- Acc 3332 - Special consumption tax
- Acc 3333 - Import-export tax
- Other related accounts such as: Acc 111, Acc 112, Acc 131…
1.2.1.2.2. Accounting entries for major transactions

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