Accounting for consumption and evaluation of business results at dai duong xanh limited company

INTRODUCTION OF DAI DUONG XANH LIMITED COMPANY

Overview of the Company

Dai Duong Xanh Limited Company has been fully compliant with business registration requirements as per current laws, receiving its business registration license from the Department of Planning and Investment on May 16, 2013 The company commenced operations shortly thereafter on May 22, 2013, and has been successfully operating for over seven years under the tax management of the Tax Department of Hoi An City.

Address: 29 Huynh Ngoc Hue, Block 4, Tan An Ward, Hoi An City, Quang Nam Province

Founded in 2013, Dai Duong Xanh Limited Company has quickly established itself in the market by prioritizing quality, trust, and brand integrity Despite being a relatively young enterprise, it has made significant strides in enhancing passenger and goods transportation, all while aligning with regional and international economic integration to ensure customer satisfaction and benefits.

Dai Duong Xanh is dedicated to delivering exceptional quality, reliability, and flexible services, with a strong emphasis on safety for both people and the environment Our mission is to become the preferred choice for customers in passenger transportation and related services by continuously enhancing our operations, driven by our commitment to integrity and teamwork.

Vision: Dai Duong Xanh can become a leading brand in Vietnam in providing customers with the best inland waterway passenger transportation service at the most competitive price.

- Professionalism: The company always maintains professionalism in all jobs The company has the ability, expertise and good cooperation in providing services that meet the requirements of customers.

- Credibility: Working on the principle of mutual respect associated with each

- Responsibility: Staff work dedicated and responsible for what they have committed to customers.

- Assertiveness and creativity: We always believe and be creative in the performance of our tasks and duties.

At Dai Duong Xanh Limited Company, we take pride in our loyal employees who consistently uphold integrity and adhere to ethical standards Their dedication and commitment to excellence reflect our core values and enhance our workplace culture.

- Transparency and ethical standards: Transparent financial policy, solid resource foundation, and fairness and consistency in the application of policies and prices.

- Passenger transportation by inland waterways

- Restaurants and mobile catering services

- Supportive services related to tourism promotion and organization

- Other types of inland passenger transportation

- Leasing machinery, equipment and other tangible assets

Dai Duong Xanh Company operates in the transportation service industry, offering a diverse range of business activities focused primarily on the transportation of passengers and goods.

Dai Duong Xanh collaborates with various public service and tourism entities, ensuring a consistent and reliable customer base This strategic partnership has significantly boosted the company's service revenue, allowing it to effectively meet customer needs and establish a strong market presence.

1.1.3.1 Organizational Chart of the management apparatus

Chart 1.1 Organizational Chart of the management apparatus

(Source: Dai Duong Xanh Limited Company)

1.1.3.2 Functions and duties of departments

The Director serves as the highest authority within a company, overseeing and managing all activities either directly or through various departments Responsible for aligning with the company's financial development guidelines, the Director has the authority to amend the charter and address any breaches Additionally, the Director organizes the internal management structure and regulations, making crucial decisions regarding daily operations and ensuring the execution of the company's strategic plans Ultimately, the Director is accountable for all business activities and outcomes within the organization.

Dai Duong Xanh Limited Company utilizes a centralized accounting system, with all accounting tasks managed by the accounting department under the supervision of the chief accountant, without the establishment of separate accounting units.

The accounting structure of Dai Duong Xanh Limited Company is led by the chief accountant, with a team of accountants operating under their direct supervision To align with the company's production and business scale while optimizing efficiency and minimizing indirect labor costs, the accounting department is tasked with various responsibilities.

The organization and management of all accounting and financial activities are crucial for the company, ensuring accurate recording of all accounting transactions Additionally, effective management of company funds must align with both internal regulations and state laws.

+ Develop the company's annual financial plan.

+ Performing accounting activities at the company: recording and following arising operations, revenue, expenses, etc.

+ Ticket inspector: Checking travel tickets of passengers.

+ Guide: Business representatives who guide passengers on the tour and have a good language background to meet the needs of passengers.

+ Drivers: Captains and drivers who are responsible for transporting passengers safely to their destination.

Chart 1.2 Accounting organizational chart (Source: Dai Duong Xanh Limited Company)

+ Check and supervise the financial revenues and expenditures of the company in accordance with the financial regime of the state and the regulations of the company.

To effectively manage the company's accounting and finance operations, it is essential to decentralize responsibilities within the department while ensuring strict adherence to both state regulations and internal company policies.

+ Proposal financial planning and timely adjustment to suit the actual situation of the company and the market.

+ Guide the accountants to perform their accounting skills in accordance with state regulations.

+ Guide the accounting staff to perform for the staff in the department Check the completion of assigned work, take responsibility to the director for the truthfulness of reported data.

+ Coordinate with technical departments, sales and other functional

Accountant Debt accountant Cash accountantChief Accountant

A general accountant plays a crucial role in the accounting department by synthesizing recorded documents into the ledger, preparing detailed accounting reports, and gathering production costs from various teams to accurately calculate product costs and assess overall business performance.

- Debt accountant: monitors daily revenues and expenditures, checking the reasonableness and validity of receipts and payments, following debts of customers and member units, loans and deposits for debt comparison.

- Cash accountant: is in charge of the company’s cash management based on eligible receipts and payment slips for cash payment or receipt.

1.1.5 Accounting method of the Company

The company applies the form of “General Journal” with the support of SIVIP accounting software.

Bookkeeping procedures under general journal method:

Original document SIVIP accounting software

Chart 1.4 Book keeping procedures (Source: Dai Duong Xanh Limited Company)

The company utilizes machine accounting as its primary accounting method, employing various types of accounting books, including numbers, subsidiary ledgers, detailed summary tables, general journals, general ledgers, and other essential records.

Accounting procedures following the Charts:

Daily accounting vouchers serve as the foundation for bookkeeping, with transactions first recorded in the general journal Subsequently, these entries are transferred to the General Ledger according to the relevant accounts Additionally, if detailed accounting books and cards are maintained, the transactions are simultaneously recorded in these specific records alongside the general journal entries.

At the end of each month, the recorded figures from the general ledger are compiled to create a balance sheet After thorough verification for accuracy, these figures, along with a detailed summary sheet, are utilized to prepare financial statements.

Currently the company applies a unified account system according to the circular No 133/2016/TT-BTC dated August 26, 2016 of the Ministry of Finance.

- Fixed asset depreciation method: applied by the Company is the straight-line depreciation method.

- Inventory accounting method: applicable to the Company is the regular declaration method.

- Inventory evaluation method applied by the Company is Specific Identification Method.

- Accounting reports are prepared quarterly and annually.

- The form of accounting books and vouchers used is “General Journal”

THEORETICAL BASIS FOR ACCOUNTING FOR CONSUMPTION AND

Overview of accounting for consumption and evaluation of business results

Product consumption refers to the circulation of goods, acting as a vital link between manufacturing and distribution This process involves the buying and selling of products, which plays a crucial role in the overall business trade cycle Understanding this relationship is essential for grasping the dynamics of outbound trade.

Consumption is a multifaceted economic process that begins with market research to identify consumer needs This process involves determining the necessary goods for a business, organizing manufacturing, supplying those goods, and ultimately executing sales operations to maximize objectives.

In a literal meaning: Consumption of goods is a selling activity, which is the

Posting of enterprise's goods to a customer and collect money.

Goods consumption occurs through business sales activities, converting products into money and facilitating the circular flow of the economy This process supports cash flow within society, ensuring that the needs of the community are met.

Consumption of goods is the last stage of the production and business cycle, it’s the decisive factor for the existence and development of an enterprise.

 The role of product consumption for businesses:

For businesses, the consumption of goods is crucial for their survival and growth, as it enables continuous operations By driving product consumption, companies can effectively offset costs and generate profits, ensuring their sustainability in the market.

2.1.2 Concept of Evaluation of business results

Article 68 of Circular 133/2016/TT-BTC states that the evaluation of business results marks the final stage of the production and business process Business performance is reflected in profit targets, which are determined by sales values, financial activity profits, and profits from other activities, all calculated after deducting corporate income tax expenses.

Evaluation of business results following every production process helps enterprises evaluate their business efficiency and performance, from which, reasonable business solutions can be appropriately defined.

2.1.3 Tasks of Accounting for consumption and Evaluation of business results

The consumption of goods is crucial for businesses, directly impacting their existence and growth Consequently, it is essential to focus on accounting for consumption and evaluating business results to ensure effective management and strategic development.

Accurate and timely recording and reporting of an enterprise's goods consumption is essential This includes documenting the quantity and value of goods sold throughout the entire period, categorized by total volume, various items, sales locations, and sales methods.

Accurate calculation and reporting of the actual purchase costs for consumed products are essential for determining the sales results Proper allocation of these costs to the consumed goods ensures a clear understanding of profitability.

- Checking and urging the collection and management of goods sales, debt, due date and actual situation of debt repayment.

- Collecting fully, accurately and promptly all arising selling costs and expenses and Posting these selling expenses to consumer goods as a basis to determine consumption results.

- Providing necessary information about the actual sales situation, serving the managing direction of business operations.

- Determining the results of consumption of goods and finished products

2.1.4 Roles of Accounting for consumption and Evaluation of business results

Effective accounting for consumption and evaluation of business results significantly enhances sales activities and lowers operational costs for enterprises This practice provides users of accounting information with a comprehensive understanding of business operations, enabling managers to make timely decisions that align with market fluctuations and future business planning.

Methods of consumption and payment

Direct consumption refers to the delivery of goods directly to buyers at warehouses or production facilities, bypassing traditional storage methods Once the products are delivered to customers, they are officially considered consumed, and the selling enterprises relinquish ownership of these goods.

 Consumption method with goods delivery

The consumption method with goods delivery allows enterprises to retain ownership of products until customers confirm receipt and fulfill payment obligations Once the buyer acknowledges delivery and completes the payment, the goods are deemed consumed, prompting the enterprise to record the revenue.

Selling goods through agents, consignment is a form of consigning goods and products to agents while they remain to be owned by the enterprises until being officially consumed.

When goods are delivered to an agent, the issuance of an invoice signifies that the goods are considered consumed Alternatively, if a delivery note is prepared for the agent's sale, the accounting records indicate that the goods are sent for sale and will be deemed consumed upon receipt of periodic sales reports from the agent, as stipulated in the signed contract.

With this consignment sales method, the enterprise will pay the agent a commission amount calculated based on the consignment price for the sold goods.

 Sales with installment/deferred payment

When customers purchase goods, they initially pay a portion of the total value, with the remaining balance due later at a specified interest rate The periodic installments consist of both principal and interest on the deferred payments Sales revenue is calculated based on the total selling price, excluding any deferred interest.

The time of recording revenue in this method is the time the customer pays for the first time, excluding deferred interest.

The sale of products or goods may be subject to VAT under the deduction method when exchanged for materials, goods, or similar fixed assets utilized in production and business activities This approach ensures that businesses can reclaim VAT on inputs used in their operations, thereby optimizing their tax obligations and enhancing cash flow Understanding the implications of VAT on these transactions is crucial for effective financial management in production and business processes.

Internal consumption is a method in which sale and purchase activities only take places in different affiliates of the same commercial enterprise.

This payment method is commonly utilized for low-value transactions, particularly when both parties are in close proximity or for employee salary payments However, for larger economic transactions, this approach can pose challenges due to its complexity and potential security risks.

Bank posting is an electronic payment method that enables direct deposits into your bank account through buyer's checks, payment orders, or seller's collection orders.

Accounting for consumption

This account reflects revenue of production and business activities from the following transactions and operations:

- Sales: Selling manufactured products, purchased goods and investment b Account in use

- Indirect taxes payable (VAT, special consumption tax, export tax, and environmental protection tax)

- Sales of returned goods at closing entry at the end of the period

- Trade discounts at closing entry at the end of the period

- Sales discounts at closing entry at the end of the period

- Net revenue carry forwarded to account 911 to determine business results

- Sales of products, goods, investment properties and services provided by the enterprise in the accounting period

There is no ending balance in account 511

Account 511 is an account with no ending balance, including 6 tier 2 accounts:

- Account 5117: Investment real estate sale

- Account 5118: Other sales c Accounting vouchers

- VAT invoice (for enterprises paying tax according to the deduction method)

- Ordinary sales invoices (for enterprises paying tax according to the direct method or selling goods not subject to VAT payment)

- Delivery note cum internal transportation note

- Bank debit notes, credit notes

- Detailed payment book with buyers d Accounting procedures

According to direct consumption method

When arising revenue deductions, the accountant deducted money directly from account 511.

Accounting for agent-based consumption sales of sales

Chart 2.1 Accounting for direct consumption sales (Source: General accounting T-chart according to Circular 133)

Sales of sales VAT ACC333(1)

Chart 2.2 Accounting for agent-based consumption sales(Source: General accounting T-chart according to Circular 133)

Accounting for sales with installment/deferred payment

Accounting for sales by goods exchange

Chart 2.4 Accounting for sales by goods exchange (Source: General accounting T-chart according to Circular 133) revenue

Chart 2.3 Accounting for sales with installment/deferred payment (Source: General accounting T-chart according to Circular 133) paid by customers

Notes of Chart 2.4 Accounting for sales by goods exchange

(1) : The value of exchanged goods, materials is less than that of returned goods, materials

(2) : The value of exchanged goods, materials is more than that of returned goods, materials

2.3.2 Accounting for returned goods and products a Content

Returned goods refer to items sent back by customers for various reasons, including breaches of commitments, violations of economic contracts, loss of product quality, or incorrect types and regulations When a buyer returns goods, it is essential to also return the original invoice According to Circular 133, sales accounts must be processed, and accountants should record these transactions in Account 511.

Accounting for returned goods and products

Accounting for expenses incurred related to sales returns

(Regular inventory count) Receiving returned goods,

Values of consumed goods products

Chart 2.5 Accounting for product and goods returns(Source: General accounting T-chart according to Circular 133)

2.3.3 Accounting for cost of goods sold a Content

Valuation methods of cost of goods sold

This method determines the actual value of goods, materials, or products by considering the quantity and unit price of items shipped from a specific batch It is particularly suited for high-value materials and products that are limited in variety, requiring distinct management and protection for each production batch in inventory Additionally, this approach is ideal for goods that are stable and easily identifiable.

This method calculates the actual price of materials, goods, or products by averaging the inventory prices at the beginning of the period and their values throughout the period In other words, the unit price of sold goods is determined by the quantity sold during the period and the average actual unit price.

The average actual unit price may be calculated by period or at any specific time.

- The unit price of sold goods by the weighted average method for the whole reserve period.

- The unit price of sold goods by the weighted average method at each time of stock receipt.

Unit price of sold goods =

Unit price at each time of stock receipt Inventory volume at each time of stock

Unit price of sold goods

Value of inventory at the beginning of the period

Quantity of inventory at the beginning of the period Quantity of received goods in the period

Value of received goods in the period

Actual unit price of Quantity of materials actual goods, products = goods, products x Average unit price

 First-in-first-out (FIFO)

The First-In, First-Out (FIFO) method dictates that materials and products imported first are utilized first, based on their inventory prices This approach ensures that the unit price of the earliest batch is applied to sales first, with all inventory from prior batches being depleted before moving on to subsequent inventories, until the desired quantity is met Consequently, the actual value of sold goods is established by the quantity and unit price of the oldest inventory.

ACC 632 – Cost of goods sold

- Cost of products, goods and services sold in the period.

- Loss or depreciation of inventory with compensation for personal liability;

- Costs of construction and processing of fixed assets in excess of normal levels which are not included in the cost of self-constructed or self-completed tangible fixed assets;

- The amount of provision for devaluation of inventory.

- Posting cost of products, goods and services sold in the period to account 911.

- The reversal of provision for devaluation of inventories at the end of the fiscal year.

- Value of returned goods to the warehouse;

- Trade discount, sale discount accounted after the purchased goods are sold.

- Import duties, excise taxes, and environmental protection taxes which are included in the value of purchased goods, if such taxes are refunded for sold goods.

There is no ending balance in account 632 c Accounting vouchers

Provision for devaluation of inventory

Chart 2.7 Cost accounting according to periodic inventory method (Source: General accounting T-chart according to Circular 133)

Reversal of provision for devaluation of inventory

Posting finished products, goods for sales at the end

Posting balance at the end of the period

Posting balance in the beginning of the period

Posting cost of sold goods Procurement (1)

ACC 111,112,331 ACC 611 ACC 632 ACC 911 consumed in the beginning ACC 156

Notes for Chart 2.7 Accounting for cost of goods sold under periodic inventory method:

(1) : Cost of goods sold in the period of trade units

(2) : Actual unit price of inventory finished production and completed services of service providers

- For inventory accounting under perpetual inventory count method:

Posting cost of goods sold and the evaluation of business results

Depreciation of investment property ACC 2147

Actual cost of the product converted to fixed assets used for production and business

Cost of goods and service sold

Note for Chart 2.8 Cost accounting under perpetual inventory count method: (1): Inventory loss included in cost of goods sold

(2): Unallocated factory overheads charged to cost of goods sold in the period (3): Costs in excess of the normal level of self-made companies and unreasonable costs included in COGS

(4): Excessive cost of self-construction of a fixed asset excluded in the amount of fixed assets

(5): Expenses incurred related to self-constructed fixed asset which are not recognized as an increase in the value of investment properties if unallocated.

2.4 Accounting for general & administration expenses

2.4.1 Accounting for general & administration expenses a Content

The account is designated for tracking the general management expenses of the enterprise, encompassing employee salary costs, including wages and allowances, as well as social insurance, health insurance, trade union contributions, and unemployment insurance for management personnel It also covers expenses related to office supplies, labor tools, depreciation of fixed assets used in management, land rental, license taxes, provisions for bad debts, and outsourced services such as utilities and property insurance Additional costs may include expenses for receptions and customer conferences.

- The amount recorded to reduce the cost of business management;

The reversal of the provision for doubtful debts occurs when the current period's provision exceeds the unused provision from the previous period This adjustment reflects a more accurate financial position, ensuring that liabilities are properly accounted for and that the financial statements present a true and fair view of the company's obligations.

The operational expenses of the administrative division encompass various costs, including materials and office supplies, employee salaries and deductions, depreciation and repair expenses for management-related fixed assets, as well as outsourced service fees and other financial expenditures.

Provisions for bad debts and payables reflect the difference between the current period's required provision and the unused provision from the previous period This adjustment ensures accurate financial reporting and effective management of potential losses.

ACC 642- General & administration expenses, including the following tier 2 accounts:

- ACC 6422 – General & administration expenses c Accounting vouchers

- General ledger of ACC 642 d Accounting procedures payables ACC 155,156

License tax, land tax ACC 333

ACC 133 ACC 214 goods, finished products

Chart 2.9 Accounting for general & administration expenses

(Source: General accounting T-chart according to Circular 133)

ACC 133 Costs for materials, tools

ACC 911 Posting selling expenses assets used for management

TK 2293 provisions for doubtful debts

TK 352 Reversal of provisions for warranty cost

Notes for Chart 2.9 Accounting for general & administration expenses

(1) : Cost for salary and salary deductions for management employees

2.4.2 Accounting for Financial activities income a Content

This account is used to record interest income, royalties, distributed dividends, profits and other revenues from financial activities of the enterprise, including:

Interest plays a crucial role in various financial transactions, including loans, bank deposits, and deferred payment sales It influences installment payments and impacts returns on investments in bonds and bills Additionally, discounts on payments for goods and services are also affected by interest rates, making it essential for consumers and investors to understand how interest functions in these contexts.

- Dividends and profits divided for the period after the investment date

Income generated from investments in short and long-term securities includes profits from buying and selling these assets Additionally, interest accrued on capital during the liquidation of contributions to joint ventures, as well as returns from investments in associates, subsidiaries, and other capital investments, contribute to overall financial gains.

- Income from other investment activities

- Exchange rate interests, including interests from the sale of foreign currencies

- Income from other financial activities. b Account in use

- The payable VAT amount calculated by the direct method (if any);

- Posting income from net financial activities to the account 911 –

Income from financial activities arising in the period.

There is no ending balance in the account 515 c Accounting vouchers

Posting exchange rate interest due to reassessment of foreign currency balance at the end of the period

Gradual allocation of interest from deferred payment of sales, interest received in advance

Purchase of supplies, goods, services, and debts payable in foreign currency

Assignment of sale and withdrawal of financial investments Interests from selling investments

Interest from foreign exchange ACC 121, 228

Posting income from financial activities at the end of the period

Dividends and profits divided after the investment date

Enjoyed sales discounts for procurement

Interest from exchange rate ACC 3387

Chart 2.10 Accounting for financial activities income (Source: General accounting T-chart according to Circular 133)

2.4.3 Accounting for expenses of financial activities a Content

Expenses include: Expenses, losses related to financial investment activities, costs of capital contribution to joint ventures, loss of short-term securities Posting, expenses for securities sale, including:

- Rental expense, original value of real estate upon sale

- Securities trading expenses including investment losses (if any)

- Losses from sales of foreign currencies, foreign currency exchange rate

- Discount cost paid to buyers of goods and services upon deferred payment.

- Provision for decrease in securities investment prices b Account in use

Account 635- “Expenses of financial activities”

- Loan interests, interests of deferred payment, finance lease interests

- Losses from selling foreign currencies

- Losses from liquidation or sale of investments

- Exchange rate losses incurred in the period

- Exchange rate losses from the year-end reassessment of monetary items denominated in foreign currencies

- Provisions for impairment of trading securities, and for loss of investment in another entities

The reversal of impairment provisions for trading securities reflects a decrease in the loss provisions for investments in other entities, indicating that the current period's provisions are lower than those set aside in the previous year that remain unused.

- Items recorded as a decrease in financial expenses

- At the end of the accounting period, carryin over all financial expenses arising in the period to determine business results.

- Subsidiary ledger, General ledger of ACC 635 d Accounting procedures

ACC 911 Losses from selling foreign currencies

Provisions for impairment of trading securities

Provisions for for loss of investment in another entities

Post in the end of the period

Buying materials, goods foreign currencies services in foreign currencies

Losses from the reassessment of

Reversal of the difference of provisions for impairment of trading securities, loss of provision for investments in other entities

Receivables from investment sales monetary items denominated in

Expenses for joint venture activities of interests for deferred, installment payment

2.4.4 Accounting for other income a Content

This account is used to record income from other than production and business activities of an enterprise, including:

- Income from sales or liquidation of fixed assets

- Income from sales and lease operations

- Collection of a fine from customer’s breach of contracts

- Collection of bad debts which have been written off

- Collection of payable debts from unidentified owners

- Incomes from gifts and gifts in cash or in kind given to enterprises by organizations and individuals

- Value of unreturned promotional goods

- Other incomes other than the above. b Account in use

- Payable VAT amount (if any) calculated by the direct method

- In the end of the period, Posting to ACC 911 to determine business results

The payable VAT amount (if any) is calculated by the direct method for other incomes for VAT payers under the direct method.

- At the end of the accounting period, Posting other income arising in the period to the account

- Other income in the period

- Subsidiary ledger, General ledger of ACC 711

Periodically allocating unrealized revenue included in other income

Import and export taxes, special consumption, one-field protection which are reduced, refundable

Collection of other income, liabilities of unidentifiable owner

Receiving sponsorships, donations, supplies, goods, fixed assets

The penalty deducted from the deposit

Taxes of other income (if any)

Posting other income posted to

ACC 711 Collection of a fine from customer’s breach of contracts, of insurance coverage ACC 911

Chart 2.12 Accounting for other income

2.4.5 Accounting for other expenses a Content

This account expresses expenses incurred due to events or transactions that are separate from the normal operations of the business, including:

- Expenses for liquidation, sale of fixed assets

- Difference between the fair value of the assets divided from the BCC less than the cost of construction of the jointly controlled asset;

- Residual value of the fixed asset broken down;

- Residual value of fixed assets liquidated or sold (if any);

- Loss difference due to reassessment of materials, goods, fixed assets sent to contribute capital to subsidiaries, joint ventures, investments in associates, other long-term investments;

- Fines payable for breaching economic contracts, administrative fines;

- Other expenses. b Account in use

There is no ending balance in the account 811. c Accounting vouchers

- Other expenses in the period - In the end of the period, Posting to

ACC 911 to determine business results

- At the end of the accounting period, Posting other expenses arising in the period to the account 911 “Evaluation of business results”. d Accounting procedures

Withdrawal of bidding documents for sale of fixed assets

ACC 331, 333, 338Fines for contract violation, administrative fines

Posting other expenses to calculate business results

Evaluating a decrease in asset value when converting business type

The difference between the revaluation due to the residual value of the fixed asset

Value of capital contribution to joint ventures

Chart 2.13 Accounting for other expenses (Source: General accounting T-chart according to Circular 133)

Notes for 2.13 Accounting for other expenses:

(1): Expenses incurred (expenses for the disposal of fixed assets, sale of fixed assets )

(2): Historical cost of fixed assets contributed as capital to joint ventures

(3): Depreciation of fixed assets stopped being used for production and business

2.4.6 Accounting for Corporate Income tax charge a Content

Corporate income tax encompasses both current and deferred tax expenses incurred during the fiscal year, serving as a key factor in assessing the business performance of the enterprise for that period.

- Current corporate income tax expense is the payable CIT calculated on taxable income for the year and current corporate income tax rate.

Deferred corporate income tax expense refers to the future corporate income tax (CIT) obligations resulting from the recognition of deferred income tax liabilities within the current year, alongside the reversal of deferred income tax assets recognized in prior years This account is essential for accurately reflecting a company's tax position and financial health.

ACC 821 – “Business Income tax charge”

- Current corporate income tax expense incurred in the year;

The corporate income tax for the current year reflects an increase due to the identification of non-material errors from previous years, which necessitates additional payments.

- Deferred corporate income tax expense incurred during the year from recognition of deferred income tax liabilities.

- Recognition of deferred corporate income expenses.

In the current fiscal year, any corporate income tax actually payable that is lower than the provisionally payable corporate income tax will be subtracted from the recognized current corporate income tax expenses.

ACTUAL SITUATION OF ACCOUNTING FOR CONSUMPTION AND

The current state of accounting for consumption and the evaluation of business results at Dai Duong Xanh Limited Company reveals significant insights into operational efficiency and financial performance This analysis highlights the company's methodologies in tracking resource utilization and assessing profitability, which are crucial for informed decision-making and strategic planning By examining these aspects, Dai Duong Xanh Limited Company can identify areas for improvement and enhance its overall business outcomes.

3.1.1 Consumption characteristics in Dai Duong Xanh Limited Company

- Business items: The company specializes in organizing tours to Cu Lao Cham

- Consumption market: Currently the company’s consumption market is mainly in the central provinces and neighboring provinces.

The company utilizes a direct consumption method by signing sales contracts directly with customers When a buyer places an order for services via mail or phone, the company delivers services tailored to the buyer's specific requirements Once the services are rendered, they are deemed consumed.

3.1.1.2 Account the company use for consumption activities

Account 511, as outlined in Circular 133, is designated for recording the actual revenue generated from sales and service provisions by an enterprise within a specific accounting period This account captures the income derived from various transactions related to the sale of goods and the delivery of services, including any sales concessions.

The company offers a direct consumption method with payment options including bank transfers for amounts exceeding 20 million dong or cash payments, as outlined in the signed contract terms.

3.1.2 Accounting for revenues of sales and service provision a Applicable accounting vouchers and accounts

ACC 5111 - Revenue from tourism services

Daily entry of sales and VAT invoices into accounting software is essential for updating the general journal, general ledger, and subsidiary ledger of ACC 511 This process ensures that at the end of the month and synthesis period, the detailed customer payment summary and sales summary books are accurately updated Additionally, it facilitates the timely preparation of the balance sheet and financial statements at the end of the period.

Operation: On October 25, 2019, the Company sold tourism services to Vitours Vietnam Tourism Joint Stock Company with a unit price of VND 436,364 (excluding VAT 10%), VAT invoice No 0000485.(Appendix No.2)

On October 28, 2019, the Company permitted the Education and Training Department of Hoi An City to rent a canoe for transportation at a unit price of 3,000,000 VND, excluding a 10% VAT, as documented in VAT invoice No 0000488.

Then the accountants prepare notes based on accounting invoices.

( Revenues of sales and service- ACC 511) From: 01/10/19 To: 31/12/19 Accounting record Customer Interpret ACC Amount incurred

Vitours JSC Vitours JSC Entertainm ent program production board IC

- Money from tourist Tour service

Transportation Posting revenue of sales and service

Subsidiary ledger of ACC 511 is the basis for the accountants to update the economic operations in the general journal.

According to data in the general journal, the accountants update the General ledger following the related accounts.

Accounting record Customer Interpret ACC Amount incurred

Cu Lao Cham Commerci al JSC Hoi An Education and

In the fourth quarter of 2019, Dai Duong Xanh One Member Limited Company did not record any deductions of revenue

3.1.4 Cost of goods sold accounting a Accounting vouchers and accounts in use

- Account in use: ACC 632 - Cost of goods sold b Bookkeeping procedures

Accountants updated the General Journal and General Ledger of ACC 632, as well as the Subsidiary Ledger of ACC 632, based on the documents pertaining to the cost of goods sold, following the established accounting process.

Operation: On December 16, 2019, the Company purchased 02 Bridgestone 215/75R 16 tires from Bao Nam Thanh One Member Company Limited with the unit price of 2,545,455 VND (excluding 10% VAT), VAT invoice number 0000585.

The cost of inventory is determined using the specific identification method, which calculates the value of products, supplies, and goods in the warehouse based on the unit price of their exact batch This approach aligns with the appropriateness principle of accounting, ensuring that actual costs correspond with actual sales, thereby accurately reflecting the value of stock for sale in relation to the revenue it generates To effectively implement this method, it is essential to closely monitor and manage the quantity and unit price of each inventory shipment.

All company operations are documented in Sivip software, enabling cost determination through the specific identification method At the end of each period, accountants execute commands within the software to calculate the business's costs and results.

Based on accounting invoices (Appendix No.4), the accountants prepare the payment notes.

HTK module In the end of the period Average cost

Then all data input to the software will be automatically updated to the subsidiary ledger, general journal, and general ledger.

From: 01/10/19 To: 31/12/19 Accounting record Interpret ACC Amount incurred

- Pay for gas according to invoice no 0010462

- Pay for tires 29cn according to invoice no.685

Then according to the Subsidiary ledger of ACC 632, the accountants recorded the economic operations in the general journal.

01/10 1 Pay for gas (Invoice no.

- Cost for work in progress 154 3,328,364 -

04/10 2 Pay for gas (Invoice no.0010472) 11,596,364 11,596,364

26/10 11 Pay for gas (Invoice no.0010774) 7,632,727 7,632,727

13/12 12 Pay for gas (Invoice no.

16/12 15 Pay for tires 29cn (Invoice no.685) 5,090,910 5,090,910

- Cost for work in progress

According to the general journal, the accountants updated the General ledger in the related accounts.

- Pay for tires 29cn according to invoice no.685

3.1.5 Accounting for Business management cost a Accounting vouchers and accounts in use

Dai Duong Xanh One Member Limited Company, in accordance with Circular No 133, consolidates its accounts by recording all selling and administrative expenses under account 642, without separating them into accounts 641 and 642 This is organized into two detailed accounts for better tracking.

- Accounting vouchers in use: VAT Invoices, Payment slips, Subsidiary ledger, General journal, General ledger of ACC 642 b Bookkeeping procedures

The expenses associated with a company's business management encompass various costs, including management staff salaries, office supplies, depreciation of fixed assets, taxes, fees, outsourced service costs, and other financial expenditures Accountants utilize documents pertaining to selling and business management expenses to update the General Journal and General Ledger of ACC.

642, General ledger of the relevant accounts according to the following accounting process:

Original documents, VAT invoices, salary distribution sheet

Operation: On November 30, 2019, the company paid salaries of November in cash to employees according to the payroll in November 2019.(Appendix No.5)

Based on the payroll(Appendix No.5), the accountants prepared the payment slips.

On November 30, 2019, accountants entered data from payment slips into the software, ensuring that these figures were automatically reflected in the Subsidiary Ledger, General Journal, and General Ledger.

Subsidiary ledger ( Administration Expenses-ACC 642)

Accounting record Cust omer Interpret ACC Amount incurred

- Bank charges acc management fees Oct

Bank collects fee for maintaining SMS service

(signature, name) (signature, name) (signature, name)

According to the Subsidiary ledger of ACC 642, the accountants recorded economic operations in the General journal

Accounting record Interpret ACC Amount incurred

10/10 1 Bank charges acc management fees Oct 16,500 16,500

- Bank deposits - The State Bank of Vietnam

18/10 2 Bank collects fee for maintaining SMS service 55,000 55,000

- Bank deposits - The State Bank of Vietname

Then based on the general journal, the accountant updated the General ledger in related accounts

Dai Duong Xanh Limited Company

(Administration expenses- ACC 642) From: 01/10/19 To: 31/12/19 Accounting record Cust omer Interpret ACC Amount incurred

- Bank charges acc management fees Oct

Bank collects fee for maintaining SMS service

Accounting income from financial activities (Account 515) of the company reflects interest income, royalties, dividends, distributed profits and other revenues from financial activities of the enterprise, including:

Interest plays a crucial role in various financial transactions, including loans, bank deposits, and installment payments It affects the cost of borrowing and the returns on investments in bonds and bills Additionally, interest is a key factor in deferred payment sales, influencing both consumer purchases and business cash flow Understanding the implications of interest can help individuals and businesses make informed financial decisions.

- Income from investment in buying and selling securities in short and long term; Interest on capital Posting upon liquidation of equity investments in other entities.

- Income from other investment activities.

- Exchange rate interest arising in the period and revaluation of monetary items denominated in foreign currencies at the end of the period; profits from selling foreign currencies.

- Other revenues from financial activities.

However, in the fourth quarter of 2019, Dai Duong Xanh Limited Company had no revenue from financial activities, so no data was recorded.

In the fourth quarter of 2019, Dai Duong Xanh Limited Company had no financial expenses, so no data was recorded.

In the fourth quarter of 2019, Dai Duong Xanh Limited Company had no other income, so no data was recorded.

In the fourth quarter of 2019, Dai Duong Xanh Limited Company had no other expenses, so no data was recorded.

3.1.10 Corporate income tax expense accounting a Accounting vouchers and accounts in use:

- Account in use: ACC 821- Corporate income tax expense

- Accounting vouchers in use: CIT declaration, Subsidiary ledger of ACC 821, General Journal, General ledger of ACC 821 b Bookkeeping procedures:

After completing the above actions, the accountants checked the business result report to determine the corporate income tax The applicable corporate income tax rate of the company is 20%.

BUSINESS RESULT REPORT For taxpayers in the manufacturing, trade and service industries

Business results recorded according to financial statements:

1 Sales of goods and service provision [01] 361,363,636

Of which: Sales of goods and services for export [02] 0

([03]=[04]+[05]+[06]+[07]) [03] 0 a Sale discount [04] 0 b Devaluation of sale [05] 0 c Sale returns [06] 0 d Payable [07] 0

4 Expenses for goods and service production and trading([09]=[10]+[11]+[12]) [09] 240,688,136 a Cost of goods sold [10] 154,331,909 b Selling expenses [11] 0 c General and administration expenses [12] 86,356,727

In which: Interest expense for production and business

6 Net profit from operating activities

10 Total accounting profit before CIT

Based on accounting vouchers entered into the software, relevant figures will be automatically posted to the subsidiary ledger, general journal and general ledger:

Subsidiary ledger ACC 821 - Business Income Tax Charge

Accounting record Interpret ACC The amount incurred

- Business income tax charge in Fourth Quater/2019

- Posting business income tax charge

According to the Subsidiary ledger of ACC 821, the accountants recorded

Record Interpret ACC The amount incurred

Short-term receivables from customers

31/12/2019 PKT 9 Posting profit or loss incured 120,675,000 120,675,000

Based on the general journal, the accountant updated the General ledger in relevant accounts

General ledger ACC 821 - Business Income Tax Charge

3.1.11 Accounting for evaluation of business results a Accounting vouchers and accounts in use:

- Account in use: ACC 911- evaluation of business results

- Accounting vouchers in use: Income statement, General Journal, Subsidiary ledger of ACC 911, General ledger of ACC 911 b Bookkeeping procedures

On December 31, 2019, the accountants posted all revenue related to the carryover, the accountant posted these data to account 911 – “evaluation of business results” to prepare a report on income statement.

Subsidiary ledger ACC 911 - Evaluation of business result

Based on the Subsidiary ledger of ACC 911, the accountants recorded economic operations in the General Journal.

Accounting record Interpret ACC Amount incurred

According to the General journal, the accountants updated relevant accounts in the General ledger

- Cost of goods sold: goods, end - product

31/12 9 Posting profit or loss incured 120,675,000

General ledger ACC 911 - Evaluation of business result

Then we have a income statement (Appendix No.6)

SOME RECOMMENDATIONS TO COMPLETE THE ACCOUNTING FOR

SOME RECOMMENDATIONS TO COMPLETE THE ACCOUNTING FOR CONSUMPTION AND EVALUATION OF BUSINESS RESULTS IN THE

COMPANY 4.1 The need and the principle of perfecting consumption accounting, determining business results at Dai Duong Xanh Limited Company

Over eight years of steady growth, Dai Duong Xanh Limited Company has established a strong market presence, thanks to the effective leadership that swiftly and accurately processes information The company's success is further enhanced by the professional expertise and innovative spirit of its staff Notably, the accounting team plays a crucial role by delivering timely and effective information, which aids in the efficient management and utilization of the company's capital and assets.

Accounting plays a crucial role in corporate finance, governed by established accounting regulations and laws that guide its practices Companies must ensure their accounting procedures, systems, and reporting align with these regulations, and annual financial records are subject to evaluation by auditors to confirm their accuracy and reliability.

Improving consumption accounting is a really necessary issue in all businesses, especially businesses in the service sector, because:

Once the consumption and accounting processes are finalized, the accounting system significantly enhances the inspection and supervision of the company's financial activities Accurate consumption accounting captures the essence of the company's business operations, ensuring that the accounting framework delivers precise information and data This reliability is crucial for managers in decision-making and for state agencies monitoring the business processes of enterprises.

Completing this process enhances the accuracy of business records In addition to the required bookkeeping system, businesses should include essential detailed records to provide precise and tangible information, aiding managers in developing effective business strategies and offering valuable insights to stakeholders Regular monthly and quarterly entries streamline data verification and reconciliation, allowing for accurate assessments of debt repayment and service timelines A compact and efficient notebook structure reduces the recording workload while ensuring comprehensive economic and financial information is readily available for all interested parties.

To enhance the organization of accounting in line with the actual conditions of the Company and ensure adherence to the Vietnamese accounting regime, it is essential to improve the accounting structure The aim of refining consumption accounting and accurately determining consumption results is a practical and cost-effective strategy This process should leverage existing human and material resources, as well as the current management framework that aligns with the Company's scale To achieve these objectives at Dai Duong Xanh Company, specific requirements must be met.

Consumption accounting and the assessment of consumption outcomes must align with the financial mechanisms and adhere to established accounting practices, while also conforming to the State's economic and financial management policies regarding revenue and cost accounting.

To enhance accounting efficiency, it is essential to align accounting practices with the unique characteristics of the business and its organizational structure Compliance with generally accepted accounting principles, relevant accounting ordinances, the latest accounting laws, and international accounting standards recognized in Vietnam is crucial for effective financial management.

Effective consumption accounting and analysis of consumption results should focus on the relationship between costs and benefits, emphasizing cost savings while maintaining business operations The goal is to ensure the company operates steadily and efficiently, ultimately enhancing productivity and profitability.

4.2 General assessment of current situation of accounting for consumption and Evaluation of business results in the company

The company's accounting voucher system is well-organized and effectively structured, utilizing various accounting vouchers such as VAT invoices, payment slips, and receipts that comply with the Ministry of Finance's requirements These vouchers are generated through accounting software, ensuring they contain complete and legal information, serving as valid proof of economic transactions Additionally, the document circulation process is efficiently arranged, aligning with the "General journal" format adopted by the company, which facilitates error tracking and detection.

Vouchers are created in accordance with the existing accounting standards, and utilized vouchers are documented and stored as per regulatory requirements Furthermore, the internal documentation is comprehensive and aligns well with both content and legal standards.

The company is currently utilizing Sivip accounting software, developed by a software joint stock company, to enhance its financial processes This advanced software replaces the previous manual recording and reporting methods, ensuring that accounting data is highly accurate and accessible to users at any time and from any location.

The company's management system strikes a balance between simplicity and effectiveness, ensuring efficient job completion while minimizing costs By offering competitive salaries and insurance benefits, the company fosters an environment that enhances employee productivity and satisfaction.

The Company's accounting staff is highly motivated and committed to enhancing their professional skills, with most members possessing strong expertise and quickly adapting to their roles They actively propose innovative ideas and share their perspectives to improve accounting operations Additionally, the department benefits from a top-down management approach that fosters close collaboration, enabling each individual to advance their professional development effectively.

- In order to facilitate employees with a comfortable working spirit, every year,the company organizes travel trips, etc to help employees of the company relieve

Accountants meticulously record all profits and losses in financial books, generating detailed monthly, quarterly, and annual statements This thorough management of accounting data enhances the clarity of financial information, enabling senior managers to make informed decisions on business strategies, ultimately improving the effectiveness of the company's operations.

While the company has made significant strides in refining its accounting for consumption and evaluating business results, there remain limitations that must be addressed to fully meet management requirements.

Although basically, the company has a good organization in accounting of revenue, expenses and evaluation of business results, there are still some limitations as follows:

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