INTRODUCTION

In recent years, there are more chances for Vietnam to develop its economy, by
cooperating with other nations. Having a multi-sectoral, market-driven, open and
integrated economy is the goal of Vietnam. Moving along with the economy’s
development, Vietnam's accounting and auditing system has been thoroughly
approached and integrated with national principles and international standards. The
growth of the economy leads many industries to develop, which includes accounting
and auditing industry - an area arising from accounting, serving the requirements of the
accounting sector.
It can be seen that, accounting for sales plays a crucial role in most kinds of businesses.
Making use of the accounting department, the Management can control the company’s
business situation and offer direction both in short and long-term for the business.
There is always a gap between theory and practice, so the National Economics
University and the School of Accounting and Auditing have created conditions for
final-year students to gain practical experience, which is a valuable lesson for every
students. After three months of internship at Nhat Minh Company, I have partly
understood the management procedures in general and accounting work in particular at
Nhat Minh Company. With the dedicated guidance of seniors from the Company,
especially the accounting department during my three-month internship, I have been
introduced to some departments of the company to know more about the activities of
each departments, which helped me to understand the basic process of business
operation and current status of financial accounting of the Company.
Along with that, the dedicated guidance of Ph.D Nguyen Thanh Hieu helped me to
complete this bachelor thesis.

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This thesis focuses on operating and controlling accounting for sales. Generally,
completely understanding Nhat Minh Engineering Company Limited’s accounting for
sales can be reached by analyzing three chapters:
- Chapter 1: Characteristics and organization of sales operation management and
determination of business results of Nhat Minh Engineering Company Limited.
- Chapter 2: Current situation of accounting for sales and determining business results
at the Nhat Minh Engineering Company Limited.
- Chapter 3: Improving the accounting for sales and determining business results at
Nhat Minh Engineering Company Limited.

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 CHAPTER 1
CHARACTERISTICS AND ORGANIZATION OF
SALES OPERATION MANAGEMENT AND
DETERMINATION OF BUSINESS RESULTS OF NHAT
MINH ENGINEERING COMPANY LIMITED

1.1. CHARACTERISTICS OF SALES ACTIVITES

1.1.1. Introduction
 General information of the Company
NHAT MINH ENGINEERING COMPANY LIMITED
- Head office: A4 block 6 Dinh Cong, Hoang Mai district, Hanoi, Vietnam
- Representative office: Room 511, Toyota My Dinh Building, 15 Pham Hung,
Nam Tu Liem district, Hanoi, Vietnam
- Type of business entity: limited liability company
- Legal representative: CEO - Mrs. Phan Ngoc Minh
- Tel: 024 3640 4476 | Fax: 024 3640 4475
- Chartered capital: 10.000.000.000 VND
26/6/2004: Nhat Minh Company was founded. Beginning stage by producing plastic
items for industry market, the organization has gradually broadened its area to create
different kinds of spare parts.
10/2007 – Nhat Minh extended to another business by assembling and trading in
mechanical tools.,Nhat Minh became an official supplier for various popular producers
such as Okazaki, Magafor, Mitsubishi, Fujiseiko, Okazaki, FSK, etc.
11/2007 – Nhat Minh began to manufacture its production line at Ha Binh Phuong
Industrial Zone. The plant was launched in 5/2008. Aside from old products such as
danpla plastic boxes and trays, the Company had continued to participate in

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manufacturing production chain of designing moulding models and manufacturing
plastic parts with high accurate estimates for the car and electronic industries.
10/2009 – Nhat Minh had the representative office in HCMC.
10/2009 – the company signed contracts to become an official representative for many
global famous hardware partnerships in measurement, mechanical processing, plastic
injection machines such as Hexagon, Takamaz, DMG – Moriseiki, Tokyo, etc.
Moreover, the Company persistently made investments in technical equipment,
technology; improving quality of Nhat Minh’s staffs, enhancing its workplace to
stimulate creativity, and applying the strategy for quality management with the aim of
building a remarkable, solid trademark and becoming the first selection for customers
and partners in Vietnam and around the world.
 List of goods sold of the Company
- Cutting tools
- Grinding stones
- Plastic mold
- Aluminium die-cast
- Plastic injection parts
- Industrial packaging: containers, pallet, anti-rust paper
- Other products: cage, trolley, recycle bin
1.1.2. Market of the Company
- The main market: the company concentrated on being suppliers for many
manufacturers both domestically and internationally
- Some regular customers of the organization:
+ Partners: Mitsubishi, Okazaki, Norton, Tokyo Technical Instruments, Hexagon,
Takamaz, Sodick, Kashifuji, Accretech
+ Customers: Canon, Musashi, Honda, Yamaha, Veam, Nidec
1.1.2. Sales and Payment method of the Company
 Sales method

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In the competitive market, the Corporation must have proper selling methods in order
to remain top supplier in the market, satisfy the need of the clients and earn profit. Nhat
Minh is currently utilizing only one sale method, which is retail method:
- Retail through warehouse: Nhat Minh hands over the goods directly to the customer’s
warehouse, the representative of the client company buys and receives the goods at the
Nhat Minh's warehouse, signs the sale invoice and receives the goods along with the
invoice.
- Retail through delivery: Nhat Minh distributes goods from its warehouse to the client
company at the location specified by the client and agreed on the contract.
 Payment method
- Cash/Bank
Because the Company trades many goods with different cost, the payment should be
flexible to create conditions for customers to pay in a convenient and easy way. The
company makes some payment methods depending on the understanding between the
two parties under signed sale contracts such as cash, bank transfer.
Pay by cash: the accountant makes up a receipt voucher and the cashier based on the
receipt voucher to collect accurate amount of cash
Pay by bank transfer: the accountant makes up credit note.
- Sale on credit
The late payment method is mainly applied with the company's regular customers,
introduced from reliable sources.

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1.2. MANAGEMENT PROCEDURES OF SALE ACTIVITIES OF THE
COMPANY

Market After-sale
Procurement Warehousing Marketing Distribution
research service

Figure 1.1. Procedures of sales activities

 Market research:
Marketing department conducts market research by means of interviews, surveys,
questionnaires; analyzes SWOT, PEST, Porter’s Five Forces. Market research
helps to gather information about target markets, identify and analyze the market
need, market trend, market size and competitors.
 Procurement:
Purchasing & Administration department is responsible for importing goods from
suppliers. Firstly, the department receives portfolio and quotation from different
suppliers, and then evaluate which supplier has the best ability to meet the
company’s criteria. Lastly, when selecting the suitable supplier, Nhat Minh and the
contractor will execute the contract.
 Warehousing:
After goods procurement accomplished, goods are stored in Nhat Minh’s factory at
Ha Binh Phuong Industrial Zone. The main purpose of warehouse is the picking,
checking, labeling and packing of goods ready for sale.
 Marketing:
Marketing department implements strategic marketing plans to reach a wider
potential market; advertise products and services to customers through advertising
campaign, e-mail marketing programs, customer newsletter, company brochure.

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 Marketing department also coordinate with sales department to improve sales
performance and enhance business growth.
 Distribution:
Sell goods through warehouse:
+ Direct delivery: the customer sends a representative to Nhat Minh Company’s
warehouse to receive products. Nhat Minh company directly issue goods to the
client’s representative and receive the payment or approve trade payable from the
client, the goods are determined as consumption.
+ Goods transportation: based on the signed economic contract or the order, Nhat
Minh Company release the goods from warehouse and use its own transportation or
outsourcing, ship to the customer’s warehouse or specific place according to the
contract. When the client accepts the payment, the goods are determined as
consumption.
 After-sale service:
Sales department is responsible for actively contact, follow up clients regularly to
understand customer needs, get feedback from customers to ensure whether goods
or services Nhat Minh provided have any issues. In the event that the client has any
inquiries concerning about the product or service, the sales staff can thus rapidly
resolve and provide the customer with instant support. Besides, Nhat Minh also
introduces preferential policies, promotional products for long-term customers.

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 CHAPTER 2
CURRENT SITUATION OF ACCOUNTING FOR
SALES AND DETERMINING BUSINESS RESULTS AT
NHAT MINH ENGINEERING COMPANY LIMITED

2.1. ACCOUNTING FOR REVENUE

2.1.1. Vouchers and accounting procedures

 Used vouchers and documentations
- Quotation
- Economic contract
- Goods delivery note
- Sales invoice
- Minutes of goods delivery and reception
- Minutes of economic contract liquidation
- Receipt voucher/credit note

 Order of circulation and control of accounting documents

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Figure 2.1. Flowchart of Sales cycle
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  Illustration
Illustration below is transaction between Nhat Minh Engineering Company Limited
and Post and Telecommunication Equipment Joint Stock Company (POSTEF). On
October 2nd 2018, both parties signed a contract in which Nhat Minh agreed to sell
6 products for POSTEF, which were:
- Stamping machine 200 tons, code IH2-200
- Stamping machine 200 tons, code IH2-300
- Cutting tool VP10MF
- Cutting tool VP15TF
- Milling cutter MS2100
- Grindstone VN/S.D001
The total amount of contract after tax is 7,883,824,179 dong. The process of
payment is that:
First installment: POSTEF pays in advance 15% of contract value within 15 days
from the date of commencement.
Second installment: POSTEF pays 85% of the contract value within 30 days after
the equipment has been installed and tested, put into use with all valid documents.

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 Ha Noi, 2 October 2018
Contract No. 06/HĐKT/POSTEF-NHATMINH
Today, dated 2 October 2018, at the head office of Nhat Minh Engineering Limited
Company, we are:
1. PARTY A (Buyer) : Post and Telecommunication Equipment Joint Stock
Company (POSTEF)
- Address: 61 Tran Phu, Ba Dinh District, Ha Noi
- Tel: 024 38455946
- Account No.: 113000023150 at Vietcombank, Hoan Kiem Branch
- Tax code: 0100686865
- Represented by: Mr. Le Van Hung Position: Deputy Director
2. PARTY B (Seller) : Nhat Minh Engineering Limited Company
- Address: Room 511, Toyota My Dinh Building, 15 Pham Hung, Tu Liem
District, Hanoi
- Tel: (024) 3640 4474 Fax: (024) 3640 4475
- Account No.: 21510001464455 at BIDV, Cau Giay Branch
- Tax code: 0102306678
- Represented by: Mrs.Phan Thi Minh Position: Director
After discussion, we have mutually agreed to enter into this contract with the terms as
follows:
ARTICLE 1: CONTENTS OF CONTRACT
Party A agrees to buy from Party B products with quantity and price as follows:

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 -
Total contract value: 7,883,824,179 VND.
- Total contract value includes: VAT, cost of transportation to the place of
delivery.
- Any costs incurred (if any) shall be mutually agreed upon by the two parties.
ARTICLE 2: RESPONSIBILITY OF PARTY A
- Receiving goods, inspecting and receiving the handover of goods, materials and
equipment.
- Paying in full and on time the contract value and arising costs (if any).
ARTICLE 3: RESPONSIBILITY OF PARTY B
- Delivering correct types of goods which are 100% brand new according to the
detailed list under Article 1.
- Taking responsibility for delivering goods at the place of delivery.
ARTICLE 4: METHOD AND TERM OF PAYMENT
1. Method of payment: Payment shall be made by bank transfer in 02 installments,
currency: Viet Nam Dong
2. Term of payment
- First installment: Party A shall pay 15% of the total contract value to Party B
within 15 days after the contract is signed.
- Second installment: Party A shall pay the remaining 85% of the toal contract

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 value to Party B within 30 days after the equipments are installed, tested; minute of
delivery and reception, minute of economic contract liquidation are signed, attached
with documents:
+ VAT invoice: 01 original, 01 copy
+ Certificate of Quality (CQ): 01 original, 01 copy
+ Certificate of Origin (CO): 01 copy
+ Bill of lading: 01 copy
+ Minute of delivery and reception: 01 original.
+ Minute of economic contract liquidation: 01 original.
ARTICLE 5: TIME AND PLACE OF DELIVERY
- Time of delivery : within 20 days from the date of signing, Party B shall deliver all
goods to Party A.

- Place of delivery :
ARTICLE 6: GENERAL UNDERTAKINGS
1. The two parties undertake to comply with the terms set forth in the contract.
2. This contract takes effect from the date of signing and is made in 04 copies which
are sent to the relevant parties and have equal legality.

REPRESENTATIVE OF PARTY A REPRESENTATIVE OF PARTY B

(sign, name) (sign, name)

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16
 Cutting tool VP10MF 20 VP10MF

3 Maker: Norton

4 Cutting tool VP15TF 40 VP15TF

Maker: Norton

5 Milling cutter MS2100 01 MS2100

Maker: Okazaki

6 Grindstone VN/S.D001 02 VN/S.D001

Maker: Fujiseiko

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2.1.2. Detailed accounting of revenue
There are two kinds of sales that occur at Nhat Minh.
Cash sales are sales that are made through payment using cash, and the money is
received immediately.
Credit sales (sales on account) are sales that are made on specific terms with payment
being expected at a later date, instead of paying and receiving goods or services at the
time they are provided, the Company creates an account receivable which is money
owed to a business for these goods and services purchased by a client.
When selling products of the company, Nhat Minh uses account 511 to record turnover
from sales.
The process of recording detailed accounting for sales is shown below:
accountant software Detail summary of
Sale vouchers Detail book of revenue account
revenue 511
(1) (2)
Figure 2.2. Process of recording detailed accounting for Sale
 Examples of detailed book for Revenue

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Table 2.1. Subsidiary ledger of account 511 (1)

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Table 2.2. Subsidiary ledger of account 511 (2)

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 Table 1.3. Summary of revenue

SUMMARY OF REVENUE
October 2018
Currency: VND
No. Code Description Unit Quantity Unit price Revenue

1 CAT0165 Cutting tools Pcs 40 89,000 3,560,000

2 VP10MF Cutting tools Pcs 20 281,000 5,620,000

3 VP15TF Cutting tools Pcs 40 140,000 5,600,000

4 KH0207 Countersink 5.5mm Pcs 15 75,000 1,125,000

5 VIT0032 Screw Pcs 05 76,000 380,000

6 CH2446 Haft SSPKR Pcs 03 1,999,000 5,997,000

7 MA1258 Magafor Pcs 01 2,489,000 2,489,000

8 LC0086 Gangsaw Pcs 50 432,000 21,600,000

9 DP1812 Milling cutter Pcs 05 1,794,000 8,970,000

10 DD2141 Reamer Pcs 02 438,000 876,000

11 IH2-200 Stamping machine Pcs 01 3,182,000,000 3,182,000,000

200 tons

12 IH2-300 Stamping machine Pcs 01 3,897,000,000 3,897,000,000

300 tons

13 VN/S.D001 Grindstone Pcs 02 37,721,000 75,442,000

… … … … … … …

Total 14,264 11,392,604,550

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2.1.3 General accounting of revenue
 Used accounts: 511 – Revenue from sale of goods
 The accounting cycle of revenue

Figure 2.3. The process of recording Sales

Note:
Record daily

Record periodically

Reconciliation
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Table 2.4. General journal of account 511

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Table 2.5. General ledger of account 511

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2.2. ACCOUNTING FOR COST OF GOODS SOLD
2.2.1. Vouchers and accounting procedures
 Used vouchers and documentation
- Sale contract
- Goods received note
- Goods delivery note
- Minutes of delivery and reception
- Minutes of economic contract liquidation
 Order of circulation and control of accounting documents

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Figure 2.4. Flowchart of Procurement cycle

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- Sales department makes Purchase request and sends to Procurement department.
Procurement department receives Purchase request, then makes Quotation request.
- Procurement department sends Quotation request for Supplier. Supplier based on
Quotation request to make Quotation.
- Supplier sends Quotation to Procurement department. Procurement department
receives Quotation, compare to other suppliers in the market, if Nhat Minh
Company agrees to buy then Procurement department makes Purchase order and
sends it to Supplier.
- Supplier receives Purchase order. Supplier is responsible to provide Nhat Minh
with sufficient documents including Goods delivery note, Sales invoice ready to
dispatch goods to Nhat Minh. Supplier delivers goods attached with Goods
delivery note to Nhat Minh’s warehouse. At the same time, Supplier sends Sales
invoice to Procurement Department.
- Storekeeper receives delivered goods and makes Goods receipt note. Procurement
department collects all related documents and sends to Accounting department,
including Purchase request, Quotation, Purchase order, Sales invoice. Storekeeper
sends Goods received note to Accounting department.
- If Nhat Minh pays immediately, the accountant makes Payment voucher, sends it
to cashier so that cashier pays cash to supplier.
- If Nhat Minh purchases on credit or the value of goods purchased is more than 20
million dong, the accountant makes standing order which is sent to Vietcombank.
 Illustration
Illustration below is transaction between Nhat Minh Engineering Company Limited
and Post and Telecommunication Equipment Joint Stock Company (POSTEF). On
October 2nd 2018, both parties signed a contract in which Nhat Minh agreed to sell 6
products for POSTEF, which were:
- Stamping machine 200 tons, code IH2-200
- Stamping machine 200 tons, code IH2-300
- Cutting tool VP10MF
- Cutting tool VP15TF
- Milling cutter MS2100
- Grindstone VN/S.D001

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30
No Product’s name Maker Quantity (Pcs) Note
1 Stamping machine 200 tons, code Mitsubishi 01 PO00360
IH2-200

2 Stamping machine 300 tons, code Mitsubishi 01 PO00360

IH2-300
3 Cutting tool VP10MF Norton 20 PO00360
4 Cutting tool VP15TF Norton 40 PO00360
5 Milling cutter MS2100 Okazaki 01 PO00360
6 Grindstone VN/S.D001 Fujiseiko 02 PO00360
Conclusion:
- Handovered exact number of goods as below.
- Ensuring the right quality and quantity according to the contract agreed between the two
parties.

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  Calculation method of COGS
In order to determine the COGS the accountant must base on the purchase cost of the
goods and other costs incurred in bringing the inventories to Nhat Minh’s warehouse.
Purchase cost includes purchase price, import duties and transport, handling and any
other cost directly attributable to the acquisition.
Currently, Nhat Minh calculates inventories based on perpetual inventory method, using
the weighted average method to determine COGS. The accountant calculates the average
unit price once at the end of the month.
Calculation method:
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦+𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑
Quantity of
Cost of goods sold = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦+𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 x
goods sold

Illustration 2.1: In May 2018, the accountant calculates the COGS of product Cutting
tools DNGG150404-FJ-VP15TF with below information:
Beginning inventory: 200 pieces, unit price: 150,000 dong
On 10 May, the Company purchased 300 pieces from Musashi Auto Parts Vietnam with
unit price: 165,000 dong.
On 20 May, the Company had economic contract with DMC Technology to provide 150
pieces for DMC.
The accountant calculates the cost of cutting tool DNGG150404-FJ-VP15TF sold by
weighted average method:
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦+𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 Quantity of
Cost of goods sold = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦+𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 x
goods sold

200∗150,000+300∗165,000
= 𝑥 150
200+300

= 23,850,000 (dong)

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2.2.2. Detailed accounting for COGS
 Process of recording subsidiary ledger of COGS (account 632)

Goods Input report

received note
Stock General
report accounting
book of
Stock card Inventory inventory
reconciliation book

Goods Output report

delivery note

Figure 2.5. Process of recording detailed accounting for COGS

Record daily

Record monthly

Reconcile

 Examples of detailed book for COGS

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 Table 2.6. Summary of COGS

SUMMARY OF COGS
October 2018
Currency: VND
No. Code Name Unit Quantity Unit cost COGS
1 CAT0165 Cutting tools Pcs 40 69,000 2,760,000
2 VP10MF Cutting tools Pcs 20 183,437 3,668,740
3 VP15TF Cutting tools Pcs 40 99,403 3,976,120
4 KH0207 Countersink Pcs 15 48,537 728,055
5.5mm
5 VIT0032 Screw Pcs 05 60,000 300,000
6 CH2446 Haft SSPKR Pcs 03 1,337,000 4,011,000
7 MA1258 Magafor Pcs 01 2,133,123 2,133,123
8 LC0086 Gangsaw Pcs 50 363,222 18,161,100
9 DP1812 Milling cutter Pcs 05 1,348,935 6,744,679
10 DD2141 Reamer Pcs 02 292,449 584,898
11 IH2-200 Stamping machine Pcs 01 2,436,125,000 2,436,125,000
200 tons
12 IH2-300 Stamping machine Pcs 01 3,033,500,000 3,033,500,000
300 tons
13 VN/S.D001 Grindstone Pcs 02 27,945,000 55,890,000
… … … … … … …
Total 14,264 8,664,031,105

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 Table 2.7. Stock report

STOCK REPORT
October 2018
No. Name Code Uni Opening balance Input Output Ending balance
t Qty Unit Total Qty Unit cost Total Qty Unit Total Qty Unit Total
cost cost cost cost cost cost cost
1 Cutting tools CAT0165 Pcs 165 69,000 11,385,000 70 69,000 4,830,000 40 69,000 2,760,000 195 69,000 13,455,000
2 Cutting tools VP10MF Pcs 83 183,437 15,225,271 100 183,437 18,343,700 20 183,437 3,668,740 163 183,437 29,900,231
3 Cutting tools VP15TF Pcs 30 99,403 2,982,090 20 99,403 1,988,060 40 99,403 3,976,120 10 99,403 994,030
4 Countersink KH0207 Pcs 50 48,537 2,426,850 50 48,537 2,426,850 15 48,537 728,055 85 48,537 4,125,645
5.5mm
5 Screw VIT0032 Pcs 24 60,000 1,440,000 15 60,000 900,000 05 60,000 300,000 34 60,000 2,040,000
6 Haft SSPKR CH2446 Pcs 28 1,337,000 37,436,000 10 1,337,000 13,370,00 03 1,337,000 4,011,000 35 1,337,000 46,795,000
7 Magafor MA1258 Pcs 10 2,133,123 21,331,230 5 2,133,123 10,665,615 01 2,133,123 2,133,123 14 2,133,123 29,863,722
8 Gangsaw LC0086 Pcs 105 363,222 38,138,310 50 363,222 18,161,100 50 363,222 18,161,100 105 363,222 38,138,310
9 Milling cutter DP1812 Pcs 26 1,348,935 35,072,310 10 1,348,935 13,489,350 05 1,348,935 6,744,679 31 1,348,935 41,816,985
10 Reamer DD2141 Pcs 63 292,449 18,424,287 02 292,449 584,898 61 292,449 17,839,389
11 Stamping IH2-200 Pcs 01 2,436,125, 12,180,625, 01 2,436,125, 2,436,125,
machine 200 000 000 000 000
tons
12 Stamping IH2-300 Pcs 01 3,033,500, 3,033,500, 01 3,033,500, 3,033,500,
machine 300 000 000 000 000
tons
13 Grindstone VN/S.D0 Pcs 04 27,945,000 111,780, 01 27,945,000 27,945,000 02 27,945,000 55,890,000 03 27,945,000 83,885,000
01 000
… … … … … … … … … … … … … … … …
Total 10, 5,154,422, 4,478 3,913,682, 14, 8,664,031, 903 404,074,152
689 377 880 264 105
Hanoi, 31 October 2018
Preparer Storekeeper Chief accountant General director
(signed) (signed) (signed) (signed)

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Table 2.8. Subsidiary ledger of account 632 (1)

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Table 2.9. Subsidiary ledger of account 632 (2)

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2.2.3. General accounting of COGS

 Used account: 632 - COGS

 The accounting cycle of COGS

Figure 2.6. The process of recording COGS

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Table 2.10. General journal of account 632

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Table 2.11. General ledger of account 632

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2.3. ACCOUNTING FOR SELLING EXPENSE

2.3.1. Vouchers and accounting procedures

 Used vouchers and documentation
- Internal goods delivery note
- Outsourcing service invoice
- Salary payment sheet
- Supplies and tools allocation table
- Depreciation schedule
 Order of circulation and control of accounting documents

Sale department Accounting department Warehouse

Release Release
order order

Goods Receive goods

delivery note delivery note

Receive tools and Release

sign in goods tools
delivery note

Receive goods
delivery note

Record in books of
tools and supplies
Stock card
account – 153 and
books of selling
expense account - 641

Figure 2.7. Flowchart of tools and supplies issued for Sale Department

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- When Sale department is in need of using tools and supplies, Sales staff needs to
set up a release order. Release order is made in oral or in form.
- Accounting department makes goods delivery note and transfers it to the
storekeeper. The goods delivery note is made up of 02 copies: (1) for stored in
accounting book, (2) for storekeeper.
- The storekeeper receives goods delivery note and proceeds to release the tools
to the Sales staff.
- The Sales staff receives the tools and signs in the goods delivery note, then
sends it back to the storekeeper.
- The storekeeper receives the goods delivery note, proceeds to record the stock
card, and returns 1 copy of goods delivery note to Accounting department.
- Accounting department receives goods delivery note and records in books of
account 153 – tools and supplies and books of account 642 – selling expense.
 Examples of detailed accounting books for selling expense

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 Table 2.12. Salary payment sheet of Sale department
NHAT MINH ENGINEERING LIMITED COMPANY

SALARY PAYMENT SHEET

October 2018
No Name Base Basic KPI Total salary Actual Actual salary Allowances SHUI Unpaid Union Remaining
salary salary work (meal, reduction leave fee salary
days telephone)

(1) (2) (3) (4) (5) (6)=(3)+(4)+(5) (7) (8)=(6)/27*(7) (9) (10)=(3)*10.5% (11) (12) (13)=(8)+(9)-
(10)-(11)-
(12)

Sales 14,520,000 7,480,000 13,000,000 52,500,000 128 47,750,000 5,880,000 1,524,600 55,154,600
department

1 Nguyen 19,000,000 27 19,000,000 1,600,000 630,000 100,000 21,130,000

Trong Tiep 6,000,000 4,000,000 9,000,000

2 Le Van Tu 9,000,000 27 9,000,000 1,700,000 447,300 50,000 11,097,300

4,260,000 1,740,000 3,000,000

3 Nguyen Van 7,000,000 27 7,000,000 1,700,000 447,300 50,000 9,097,300

Duc 4,260,000 1,740,000 1,000,000

Technical 11,000,000 14,000,000 7,000,000 32,000,000 54 32,000,000 2,500,000 1,155,000 35,655,000

deparment

4 Le Xuan 5,500,000 7,000,000 3,000,000 15,500,000 27 15,500,000 1,250,000 577,500 50,000 17,277,500
Tinh

43
5 Nguyen Anh 5,500,000 7,000,000 4,000,000 16,500,000 27 16,500,000 1,250,000 577,500 50,000 18,277,500
Hao

Marketing 4,500,000 4,000,000 - 8,500,000 27 8,500,000 500,000 472,500 13,117 9,459,383

department

6 Nguyen Huy 4,500,000 4,000,000 - 8,500,000 27 8,500,000 500,000 472,500 13,117 50,000 9,409,383
Hoang

Support 18,260,000 10,740,000 11,500,000 40,500,000 108 40,500,000 3,420,000 286,806 44,206,806
Department

7 Phan Van 5,000,000 6,000,000 4,000,000 15,000,000 27 15,000,000 700,000 - 207,639 100,000 15,392,361
Quang

8 Dinh Thi 4,500,000 1,500,000 3,000,000 9,000,000 27 9,000,000 700,000 207,639 79,167 50,000 9,778,472
Hoa

9 Lai Thi Len 4,500,000 1,500,000 3,000,000 9,000,000 27 9,000,000 700,000 79,167 50,000 9,729,167

10 Nguyen Duc 4,260,000 1,740,000 1,500,000 7,500,000 27 7,500,000 1,320,000 - 50,000 8,770,000
Toan

Total 48,280,000 36,220,000 31,500,000 133,500,000 317 128,750,000 12,300,000 3,438,906 13,117 144,475,789

44
45
ELECTROMECHANICAL NO.31 ONE MEMBER LIMITED COMPANY
Address: 31 Dai Cat, Bai Bang, Thai Nguyen Province
Tel: 024 266 8831 | HOTLINE: 0931.954.742

46
Table 2.13. Supplies and tools allocation table of Sale department

47
 Table 2.14. Depreciation schedule of Sale department

DEPRECIATION SCHEDULE
As at 31 December 2018
Sales department
No. Name Stock Start date Useful End date Historical Depreciation Accumulated Depreciation Accumulated Net book
card life cost per month depreciation in current depreciation value
(month) in prior period in current
period period

Machine and 38,000,000 633,333 38,000,000 0 38,000,000 0

equipment

1 Grinding TS20018 1/12/2010 60 1/12/2015 38,000,000 633,333 38,000,000 0 38,000,000 0

machine

Means of 1,594,197,749 22,141,636 530,190,476 36,706,345 567,135,173 1,027,300,928

transportations
and
transmitters

1 Teana TS20019 1/9/2009 72 1/9/2015 530,190,476 7,363,757 530,190,476 0 530,190,476 0

2 Toyota Fortuner TS20022 17/10/2018 72 17/10/2024 1,064,007,273 14,777,879 0 36,706,345 36,944,697 1,027,300,928

Total 1,632,197,749 22,774,969 568,190,476 36,706,345 605,135,173 1,027,300,928

48
2.3.2. Detailed accounting of selling expenses
The process of recording detailed accounting for sales is shown below:
accountant software Detailed summary
of selling expense
Selling expense Detailed book of account 641
vouchers selling expense
(1) (2)
Figure 2.8. Process of recording detailed accounting for Selling expense
 Examples of detailed book for Selling expense

49
Table 2.15. Subsidiary ledger of account 641

50
2.3.3. General accounting of selling expenses
 Used accounts
Account 641 - Selling expenses
Account 641 comprises 3 sub-accounts:
Account 6411 - Payroll expense
Account 6413 - Costs of tools, supplies
Account 6414 - Depreciation cost of Fixed assets
Account 6417 - Outsourcing service expense
Account 6418 - Other cash expense
 The accounting cycle of selling expenses

51
 Figure 2.9. The process of recording Selling expense
Note:
Record daily Reconciliation
Record periodically

52
Table 2.16. General journal of account 641

53
Table 2.17. General ledger of account 641

54
2.4. ACCOUNTING FOR ADMINISTRATION EXPENSE
2.4.1. Vouchers and accounting procedures
 Used vouchers and documentations
- Internal goods delivery
- Outsourcing service invoice
- Salary payment sheet
- Supplies and tools allocation table
- Depreciation schedule
 Order of circulation and control of accounting documents
(Similar to selling expense in page 51)
 Some accounting documents illustrated for administration expenses at Nhat
Minh Company

55
 Table 2.18. Salary payment sheet of Administration department
NHAT MINH ENGINEERING LIMITED COMPANY
SALARY PAYMENT SHEET
October 2018
No Name Base Basic KPI Total salary Actual Actual salary Allowances SHUI Unpaid Union Remaining
salary salary work (meal, reduction leave fee salary
days telephone)

(1) (2) (3) (4) (5) (6)=(3)+(4)+(5) (7) (8)=(6)/27*(7) (9) (10)=(3)*10.5% (11) (12) (13)=(8)+(9)-
(10)-(11)-
(12)

Board of 17,521,960 162,478,040 4,000,000 184,000,000 81 184,000,000 2,950,000 1,050,000 185,300,000

management

1 Phan Thi 70,000,000 27 70,000,000 500,000 1,050,000 500,000 68,950,000

Minh 10,000,000 60,000,000

2 Mr. Hamasuna 94,000,000 27 94,000,000 1,950,000 95,950,000

Takao 94,000,000

3 Pham Thi 20,000,000 27 20,000,000 500,000 100,000 20,400,000

Huyen 7,521,960 8,478,040 4,000,000

Accounting 8,520,000 3,480,000 4,000,000 16,000,000 54 32,000,000 2,500,000 894,600 16,105,400

deparment

4 Le Thi Hai Yen 4,260,000 2,740,000 2,000,000 9,000,000 27 15,500,000 1,250,000 447,300 50,000 9,002,700

56
5 Nguyen My 4,260,000 740,000 2,000,000 7,000,000 27 16,500,000 1,250,000 447,300 50,000 7,102,700
Phuong

HR
19,780,000 4,720,000 5,500,000 29,000,000 106 28,555,556 3,800,000 2,076,900 32,334,211
Department

Nguyen Huy 4,260,000 2,240,000 1,500,000 8,000,000 27 8,000,000 1,100,000 447,300 50,000 10,074,922
Cuong

Nguyen 4,260,000 1,240,000 1,500,000 7,000,000 27 7,000,000 1,100,000 447,300 50,000 7,942,978
Manh Diep

Vu Van 4,260,000 1,240,000 2,500,000 8,000,000 27 8,000,000 1,100,000 447,300 50,000 9,047,144
Quang

Do Hoang 7,000,000 6,000,000 25 5,555,556 500,000 735,000 1,389 50,000 5,269,167

Anh

Director 7,000,000 16,535,000 23,535,000 27 23,535,000 700,000 735,000 18,160 24,480,903

assisstant

Tham Thi 7,000,000 16,535,000 23,535,000 27 23,535,000 700,000 735,000 18,160 50,000 24,480,903
Thu Thuy

Total 52,821,960 187,213,040 13,500,000 252,535,000 268 268,090,556 9,950,000 4,756,500 19,549 950,000 258,220,514

57
58
Table 2.19. Supplies and tools allocation table for Administration department

59
Table 2.20. Depreciation schedule of Administration department

60
VIETBRAND LIMITED COMPANY
Address: 20 Nguyen Khanh Toan, Cau Giay District, Ha Noi
Tel: 024 3642 5564 | HOTLINE: 0989.134.254
Website: www.vietbrand.com | Email: info@vietbrand.com

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2.4.2. Detailed accounting of administration expense
 Process of recording subsidiary ledger of account 642
The process of recording detailed accounting for administration expense is shown below:
accountant software Detailed summary
Administration Detailed book of of admin expense
expense vouchers admin expense account 642
(1) (2)

Figure 2.10. Process of recording detailed accounting for Administration expense

 Examples of detailed book for Administration expense

62
Table 2.21. Subsidiary ledger of account 642

63
2.4.3. General accounting of Administration expense
 Used account:
Account 642 - General administration expenses, comprises 4 sub - accounts:
Account 6421 - Expenses of administrative staffs
Account 6422 - Expenses of administrative materials
Account 6424 - Depreciation expenses of fixed assets
Account 6425 - Tax, duties, fees: Recording expenses of tax, duties and fees, such as:
license tax, lease rent,... and other duties and fees.
Account 6427 - Expenses of outsourced
Account 6428 - Other explicit expenses
 The accounting cycle of Administration expense

64
Figure 2.11. The process of recording Administration expense

Record daily

Record periodically

Reconciliation

65
Table 2.22. General journal of account 642

66
Table 2.23. General ledger of account 642

67
2.5. Accounting of income summary
 Period to determine operating results
The annual accounting period of the company is from 1 January to 31 December
 Process of determining operating results
Results of operating activities is differential between net sales and cost of goods
sold, selling expenses and administration expenses.
At the end of the month/quarter/accounting period, the accountant transfers
- Net sales
- Cost of goods sold
- Financial income
- Financial expense
- Selling expense
- Administration expense
- Other income
- Other expenses
To Determination of business activity account 911, in order to determine profit or
loss.
 Used account
Account 911 – Income summary
 Example of general ledger of account 911

68
Table 2.24. General ledger for account 911

69
 CHAPTER 3
IMPROVING THE ACCOUNTING FOR SALES AND
DETERMINING BUSINESS RESULTS AT THE
COMPANY
3.1. Overall assessment of the situation of accounting for sales and determination
of business results in the Company and recommendation for improvement

3.1.1. Advantages

 Quality of accounting staff

The accounting department has a team of skilled and highly qualified staff. They
constantly practices and improves its qualifications so that they can provide complete
and accurate information, promptly help the management to keep track of the
company’s business situation so that the BOM can make the right decisions.

 Accounting vouchers
The accounting documents and vouchers are organized properly and validly according
to the regulations of the MoF. The vouchers is organized very closely to help the
management of the company control the financial situation, clarify personal
responsibility and accountability in documents transfer.
The scientifically arrangement of vouchers has helped the accounting work in the next
stage is carried out quickly and timely, and helped other staff can find the needed data
and information promptly.

 Accounting accounts
The company has a system of general accounts relevant with the regulations of the
MoF. In addition, the making of subsidiary ledger for different accounts has served
effectively the accounting of each type of goods, customers, suppliers. Accounting
system provides complete information on the related objects, meets the requirements of
management and use of accounting software.

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  Accounting books
Nhat Minh Company uses general journal to record operations. This is a form of
bookkeeping system that is suitable for applying accounting in the company. In this
form, the bookkeeping system is organized relatively scientific, compact; books are
applied in the common form in accordance with Circular 200, creating the unity in
accounting books. The data reflected in accounting books is legally proved and valid
according to the objective principle. In addition to the general journal, subsidiary
ledger, general ledger, the company also has other type of books for business
administration as well as complex accounting management.
Also, the Company uses MISA accounting software to help manage the data strictly
and scientifically. The application of MISA software is convenient for checking,
comparing and reducing labor intensity, thus making the company's accounting work
more accurate and simple.

 Organization of accounting management

With the advantage of having a separate accounting department, the accounting work is
processed quickly, carefully and accurately. The accounting tasks are specialized, chief
accountant d oes general tasks, and specific tasks are assigned to each accountant.
Because of such clear division, accounting work is done in a very detailed and specific
way. The accounting work of the Company operates in accordance with the Laws of
the Government and regulations of the Company.
In general, the accounting work of the Company is allocated in a reasonable manner,
the books are clearly recorded, the documents are preserved neatly. The financial
statements are prepared at the end of fiscal year.
Thanks to the application of computer system, the preparation of reports meets the
quality standard as well as the time schedule. The accounting department arranges the
work according to the capacity of each person, helping them to develop their
advantages and fulfill their assigned tasks.

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3.1.2. Disadvantages
Overall, the organization of accounting management is relatively complete, but there
are some limitations that need to be solved.
Circulation of documents: sometimes the company still has delay in the circulation of
documents, the amount of work strained at the end of the period can lead to unexpected
errors in recording operations such as error of transposition, error of omission affecting
the accuracy and promptness in providing information, thereby affecting the
management at Nhat Minh Company.
Management accounting: Management accounting provides information of financial
situation for the board of management, measures business performance of the
enterprise. Thereby helping the leaders to make the best decision for the business
operation. Management accounting is an indespensable part of the organization’s
accounting system. However, Nhat Minh Company does not have management
accounting.
Reports doesn’t focus much on in-depth reports for internal control and corporate
governance in order to facilitate the assessment of business efficiency.
Sales incentives for customers: lack of discount policy for customers.
Provision for bad debts: when goods are considered to be consumed, customers are
not always accepted to pay immediately or pay all the amount stated on the VAT
invoice, but the total revenue of such goods has been recorded by the accountant in
accounting books. Recovering all debts of customers is a very difficult issue for the
Company. However, the Company has not determined whether these are bad debts or
not, so the Company has not made provision for bad debts. This can lead to difficulties
in monitoring accounting books of bad debts of customers, affecting accounting as well
as business results of enterprises.

3.2. Recommendation
In the context of tough competition in the market nowadays, businesses must
constantly change, develop strongly to expand the market relationship, serve the
requirements of consumers effectively. On the other hand, in trading activities, sale is
the last and also the most important stage in the process of capital rotation of a

72
business. Therefore, completing accounting for sales and determining business results
both in terms of content and accounting methods to match current reality is an urgent
issue for businesses.
To do so, the accounting work must first be based on the following requirements:
- Completing SA and determine business results on the basis of financial
institutions and accounting regime. The organization of SA and determination of
business results must comply with certain principles, ensuring compliance with
Vietnamese accounting regime, in accordance with international accounting
practices.
- Completing SA and determining business results must be based on the decisions
of the MoF on implementation methods, voucher systems, accounting books,
account systems and report s ystems.
- Completing SA and determining business results must be based on the
characteristics of business organization, accounting organization in order to
bring the highest efficiency.
- Provide accounting information for corporate governance within the company as
well as for financial managers, and for those who are interested in the financial
situation of the company in a complete, accurate and timely manner.
- Ensure saving time and cost for the business.
Based on the knowledge learned and the time spent as accounting intern at Nhat Minh
Company, I would like to suggest some ideas to improve the accounting scheme at
Nhat Minh Company as follows:
 Sales policy
- The company should implement the policy of trade discount and settlement
discount to attract a great number of customers.
+ Trade discount: Nhat Minh sells goods with price lower than the listed price for
buyers who purchase merchandises in a large volume.
+ Settlement discount: Nhat Minh offers discounts for buyers who pays before
deadline agreed in business contract.

73
 - Other than that, which customers enjoy discount can help the Company quickly
recover capital, continue to invest in re-production and expand production;
research and improve products to meet consumer requirements. Besides
maintaining relationships with traditional customers, the Company should pay
attention to research to exploit both local markets and foreign markets.
 Management accounting
The accountant can not only performs accounting obligations such as record data in
accounting book, prepare reports, but also proppose advice to leaders in operating
business.
On the other hand, in order to gain qualifications to be able to give opinions,
accountants must constantly learn and enhance themself. Enterprises should facilitate
the accounting staff to take extra courses in order to improve the specialization of the
accounting department.
 Provision for doubful debts
The Company should make provision for bad debts using account 229.
In addition, the accountant should open detailed books of accounts receivable for each
customers in order to manage, keep track and take measures to recover capital if
needed.
For example:
Account 131 - Denso: Trade Dead - Denso Vietnam
Account 131 - KYB: Trade dead - KYB Vietnam
Account 131 - MAP: Trade dead - Musashi Auto Parts Vietnam
 Accounting vouchers
In order to reflect the sales operation in a timely manner, the transfer of original
documents should be pushed more aggressively. After the sales department and
administration department has made the documents, it is necessary to immediately
move the documents to the Accounting department to record in accounting books for
arising expenses. In addition, the accountants need to carefully check the validity of the
original voucher before billing and signing the invoice.

74
  Accounting books
The information in the vouchers must be classified and reflected systematically
according to the accounts in the appropriate accounting books.
Accountants should open a detailed book of Selling expense for each type of expense
(6411: Payroll expense, 6413: cost of tools and supplies, 6414: depreciation cost of
fixed assets, etc). For illustration:

Accountants should open a detailed book of Administration expense for each type of
expense (6421: expenses of admin staff, 6422: expenses of admin materials, 6424:
depreciation expense of fixed assets, etc). For illustration:

75
76
 CONCLUSION
Nhat Minh Company is an enterprise that functions to organize goods circulation to
serve the needs of customers. In business, Nhat Minh still sticks to their main functions
and responsibilities, well perform their tasks, maintain their business activities and
gradually improve the living conditions of laborers and implement their obligations to
the State.
During my internship at Nhat Minh Company, I have a deeper knowledge of the
current status of accounting work at the company. Through that, I became more aware
of the important role and significance of accounting work in daily business activities.
The internship report is my subjective opinion based on documents collected along
with the accumulation of knowledge through the studying process at the National
Economics University. Due to limited knowledge and constraint probation, some
certain shortcomings are inevitable. I hope to receive valuable comments from PhD.
Nguyen Thanh Hieu to improve my report and enhance my knowledge.
I sincerely thank PhD. Nguyen Thanh Hieu from School of Accounting of the National
Economics University for her guidance throughout my internship period.
I would like to show my deepest appreciation to the management of Nhat Minh Co.,
Ltd, accounting staffs in the accounting department for assisting me to accomplish this
internship report.

77