Academy of Finance Graduation thesis DECLARATION I hereby declare that this thesis is my own work and effort and that has not been submitted anywhere for any award Where other sources of information have been used, they have been acknowledged The data and results described in the thesis are derived from the actual situation of the practice company Hanoi, 30 April, 2015 Student Trần Thị Ngọc Ánh Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis ACKNOWLEDGEMENT Firstly, I would like to express my very great thankfulness to all lecturers in English for Finance and Accounting Faculty at Academy of Finance for their professional guidance and valuable support Especially, I would like to show my deep gratitude to my research supervisor, Ms Cao Phuong Thao, for her patient guidance, enthusiastic encouragement and useful critiques during the planning and development of my graduation thesis and for her assistance in keeping my progress on schedule I also want to thank TOYOTA motor Vietnam, Ltd for giving me permission to commence this thesis in the first instance, to the necessary research work and to use departmental data I have furthermore to thank the former Vice Director and Finance Manager as well as all seniors at TOYOTA motor Vietnam, Ltd who gave and confirmed this permission and encouraged me to go ahead with my thesis Especially, I would like to give my special thanks to my family whose patient love enabled me to complete this work and my friends from Foreign Language Faculty for all their help, support, interest and valuable hints Finally, because of limitation of time and knowledge, mistakes are unavoidable, so I wish to receive more contribution and suggestions to make my thesis better Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis ABSTRACT In the modern economic world, especially when the number of bankrupt enterprises is rising, accounting for sales and business results has become more and more important to every company in general, and TOYOTA motor Vietnam in particular Therefore, I choose the topic “Accounting for sales and Evaluation of business results in TOYOTA motor Vietnam, Ltd” for my graduation thesis It will point out the importance of having an effective accounting department for sales and business results The main content is reflected in three chapters The first chapter is about the literature review for every company, mainly showing what accounts are involved in calculating business results, its definitions and accounting entries In chapter 2, by taking a scenario in TOYOTA motor Vietnam, Ltd, the thesis focuses in a real accounting practice for sales and business results From that, chapter shows the company’s strengths and weaknesses and suggests some solutions to improve the current accounting system in TOYOTA motor Vietnam, Ltd In conclusion, the thesis has already been complete in comparison with proposed objectives and targets in the introduction Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis LIST OF ABBREVIATIONS No 10 11 Abbreviations Acc COGs Deprec Dept TMV IS No P&L Q’ty VAS VAT Full Phrase Account Cost of goods sold Depreciation Department Toyota motor Vietnam Income statement Number Profit and Loss Quantity Vietnamese Accounting Standard Value Added Tax LIST OF CHARTS & SAMPLES Flowcharts Flowchart 01 – Accounting entry for COGS under perpetual inventory method (for sales through agents) Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis Flowchart 02 – Accounting entry for COGS under periodic inventory method (for sales through agents) Flowchart 03 – Accounting entry for COGS under perpetual inventory method (for direct sales) Flowchart 04 – Accounting entry for COGS under periodic inventory method (for direct sales) Flowchart 05 – Accounting entry for direct sales (for company applying deduction/subtraction VAT method) Flowchart 06 – Accounting entry for direct sales (for company applying direct VAT method) Flowchart 07 – Accounting entry for sales through agents Flowchart 08 – Accounting entry for trade discount Flowchart 09 – Accounting entry for sales returns 10 Flowchart 10 – Accounting entry for sales allowances 11 Flowchart 11 – Accounting entry for tax payables 12 Flowchart 12 – Accounting entry for selling expenses 13 Flowchart 13 – Accounting entry for administration expenses 14 Flowchart 14 – Accounting entry for financial expenses 15 Flowchart 15 – Accounting entry for financial incomes 16 Flowchart 16 – Accounting entry for other expenses 17 Flowchart 17 – Accounting entry for other incomes 18 Flowchart 18 – Accounting entry for business result Samples Sample 01- General journal of COGs (Acc 632) Sample 02- General ledger of COGs (Acc 632) Sample 03- Delivery order Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis Sample 04- VAT invoices Sample 05- General journal of Revenue (Acc 511) Sample 06- General ledger of Revenue (Acc 511) Sample 07- Telecommunication service invoice (VAT) Sample 08- General journal of Selling expenses (Acc 641) Sample 09- General ledger of selling expenses (acc 641) 10 Sample 10- Nguyet Anh restaurant invoice 11 Sample 11- General journal of Administration expenses (Acc 642) 12 Sample 12- General ledger of Administration expenses (Acc 642) 13 Sample 13- General ledger of Net income (Acc 911) 14 Sample 14- Income Statement TABLE OF CONTENT PART I: INTRODUCTION……………………………………………………………1 Rationale…………………………………………………………………………1 Aims of the study……………………………………………………………… Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis Subject and scope of the study………………………………………………… Introduction of the main content…………………………………………………2 PART II: MAIN CONTENT………………………………………………………… CHAPTER I: LITERATURE OVERVIEW………………………………………….3 1.1 Overview ……………………………………………………………………………3 1.1.1 Characteristics of goods ………………………………………………………… 1.1.2 Managerial requirements………………………………………………………….4 1.1.3 Functions of accounting for sales and business results……………………………4 1.1.4 Methods of sales………………………………………………………………… 1.2 Accounting entries for sales and business results……………………………… 1.2.1 Accounting for Cost of Goods Sold (COGS)………………………………………7 1.2.2 Accounting for Sales and Sales Deductions……………………………………….7 1.2.3 Accounting for Selling and Administration expenses…………………………….19 1.2.4 Accounting for Financial Expenses and Incomes …………………………………24 1.2.5 Accounting for Other Expenses and Incomes and Corporate Income Tax Expense………………………………………………………………………………….29 1.2.6 Accounting for business results……………………………………………………33 1.3 Preparing financial statements ……………………………………………………35 1.4 Systems of Accounting forms …………………………………………………… 35 1.5 Computerized accounting for sales and business results ……………………… 37 CHAPTER II: CURRENT SITUATION OF ACCOUNTING FOR SALES AND EVALUATION OF BUSINESS RESULTSS IN TOYOTA MOTOR VIETNAM, LTD……………………………………………………………………………………39 2.1 Overview about TOYOTA motor Vietnam, Ltd ………………………………39 2.1.1 History ………………………………………………………………………… 39 Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis 2.1.2 Business field and products …………………………………………………… 40 2.1.3 Organizational structure…………………………………………………………41 2.1.4 Characteristics of accounting department ……………………………………….42 2.2 Current situation of accounting for sales and business results in TOYOTA motor Vietnam, Ltd…………………………………………………………………….45 2.2.1 List of main products…………………………………………………………… 46 2.2.2 Main selling method at TOYOTA motor Vietnam, Ltd ………………………….47 2.2.3 Current situation of accounting for sales and business results……………………48 2.2.3.1 Accounting for Cost of Goods Sold (COGS) ……………………………… ….48 2.2.3.2 Accounting for Sales and Sales Deductions …………………………………….52 2.2.3.3 Accounting for Selling and Administration Expenses………………………… 57 2.2.3.4 Accounting for Business results………………………………………………….61 2.2.3.5 Income Statement ………………………………………………………… ……63 2.3 General conclusion about accounting performance for sales and business results in TOYOTA motor Vietnam, Ltd ……………………………………………………64 CHAPTER III: SOME SUGGESTION FOR IMPROVING THE ACCOUNTING SYSTEM FOR SALES AND BUSINESS RESULTS IN TOYOTA MOTOR VIETNAM, LTD………………………………………………………………………65 3.1 Evaluation of accounting for sales and business results in TOYOTA motor Vietnam, Ltd……………………………………………………………………………65 3.1.1 Strong points …………………………………………………………………… 65 3.1.2 Weaknesses ………………………………………………………………………66 3.2 Importance and requirements for improving the accounting system for sales and business results ……………………………………………………………………… 68 3.2.1 Importance ……………………………………………………………………… 68 3.2.2 Requirements …………………………………………………………………… 68 Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis 3.2.3 Orientation…………………………………………………………………………69 3.3 Some suggestions for improving the accounting system for sales and business results in TOYOTA motor Vietnam, Ltd…………………………………………….70 PART III: CONCLUSION…………………………………………………………….75 References Appendixes Trần Thị Ngọc Ánh- CQ49/51.01 Page Academy of Finance Graduation thesis PART I: INTRODUCTION Rationale In this modern economic world with many newly established enterprises which follows a more competitive economic environment, every company must be flexible and active in their businesses, make as many profits as possible; else they will fall into bankruptcy In order to gain profits, they must realize the importance of sales and distribution phase because of its creating incomes to offset incurred expenses, then determining the profitability of the company Besides, the very first objective of every enterprise is making a profit, so calculating business results in general and sales revenue in particular is very important in both forms of accuracy and timeliness It’s the reason why efficient and effective accounting management for sales and business results plays an important role in the accounting system TOYOTA motor Vietnam, Ltd is a manufacturer of vehicles and automobile parts This field is not new in Vietnam with competitive markets It is now one of leading companies in this field Therefore, maintaining its current position and being the market leader is more important than ever From this situation, TOYOTA motor Vietnam, Ltd must have a flexible and effective sales campaign with a well-performed accounting system for sales and business results Because of the importance of accounting for sales and business results, I chose “Accounting for sales and evaluation business results in TOYOTA motor Vietnam, Ltd” as my graduation thesis topic Aims of the study My study has three objectives: Firstly, it is to contribute to the background theory of accounting for sales and business results, which is done by pointing out definitions, accounts used and accounting entries for each account related to determining business results in a manufacturing company Secondly, it is to illustrate how a company does accounting for sales and business results by taking the scenario at TOYOTA motor Vietnam, Ltd as a case for study Trần Thị Ngọc Ánh- CQ49/51.01 Page 10 Academy of Finance Graduation thesis Financial Manager Chief Accountant (Sign, full name) (Sign, full name) Prepared by (Sign, full name) Sample 12 General ledger of Administration expenses (Acc 642) TOYOTA MOTOR VIETNAM CO, LTD Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Town Tel: (0211) 3868 100 Fax: (0211) 3868 117 GENERAL LEDGER FOR ADMINISTRATION EXPENSES (Acc 642) From 01/12/2014 to 31/12/2014 Code Voucher Date PC … PK PK PK PK PK PK 05/12 … 31/12 31/12 31/12 31/12 31/12 31/12 PK PK PK 31/12 31/12 31/12 No 286 Counter Account Description Beginning balance Other cash disbursement expenses … 1111000 … 636 638 798 799 987 987 988 997 1016 Salaries and bonuses Stationery cost Social insurance Health insurance Office tools & small equipment Fixed asset depreciation Outside purchasing service cost others Other administration expenses Transfer to 911 Total incurred amount Ending balance 3311500 3388000 911 235 684 (Sign, full name) (Sign, full name) Trần Thị Ngọc Ánh- CQ49/51.01 Page 66 … 32 373 077 10 050 000 540 304 605 374 598 257 598 462 Chief Accountant Credit 470 585 … 334000 2112200 3383000 3384000 153 214 Financial Manager 2.2.3.4 Accounting for Business Result Amount Debit 124 836 165 124 836 165 124 836 165 Prepared by (Sign, full name) Academy of Finance Graduation thesis TOYOTA motor Vietnam, Ltd is a manufacturer of cars, so the business result is often from revenues from selling goods and rendering services Besides, there are some other incomes such as financial incomes, internal service rendering… - Accounts used: 911 – Net income - Accounting books used: General ledger of account 911, and income statement - Steps of accounting for selling expenses Monthly, the accounting system will update the debit and credit sides of account 911 from the ending balance in the debit side of accounts 632, 641, 642, 635, 811, 821 and the ending balance in the credit side of accounts 511, 512, 515, 711 After that, the ending balance of account 911 will be transferred to the account 421 – Retained earnings Sample 13 General ledger of Net income (Acc 911) Trần Thị Ngọc Ánh- CQ49/51.01 Page 67 Academy of Finance Graduation thesis TOYOTA MOTOR VIETNAM CO, LTD Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Town Tel: (0211) 3868 100 Fax: (0211) 3868 117 GENERAL LEDGER FOR NET INCOME (Acc 911) From 01/12/2014 to 31/12/2014 Counter Code Voucher Date No Description PK PK PK PK PK PK PK PK PK PK 31/12 31/12 31/12 31/12 31/12 31/12 31/12 31/12 31/12 31/12 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 Account Amount Debit Beginning balance Transfer net sales Transfer costs of goods sold Transfer selling expenses Transfer administration expenses Transfer financial incomes Transfer financial expenses Transfer corporate income tax Transfer other incomes Transfer other expenses Transfer retained earnings Total incurred amount Ending balance 511 632 641 642 515 635 821 711 811 421 Credit 896 568 028 567 265 127 117 019 594 124 836 165 335 103 500 332 763 261 24 485 200 164 041 393 381 631 62 961 943 395 712 921 395 712 921 2.2.3.5 Income Statement Normally, Income Statement or Profit and Loss Account is prepared at the end of the fiscal year However, in order to meet managerial requirements, income statement can be prepared monthly Information in the Income Statement is from the Account 911 – Net Income For TOYOTA motor Vietnam, Ltd, an income statement follows the form B02 – DN issued by Ministry of Finance Sample 14 Income Statement TOYOTA MOTOR VIETNAM CO, LTD Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Town Trần Thị Ngọc Ánh- CQ49/51.01 Page 68 Academy of Finance Graduation thesis Tel: (0211) 3868 100 Fax: (0211) 3868 117 INCOME STATEMENT From 01/12/2014 to 31/12/2014 No Items Code Notes Current Year Previous Year VL 25 896 568 028 Revenue from sale of goods and rendering of services Deductions Net revenue from sale of goods and rendering of services (10 = 01 – 02) 10 Cost of goods sold and services rendered 11 Gross profit from sale of goods and 20 329 302 901 896 568 028 VL 27 567265127 rendering of services (20 = 10 – 11) Income from financial activities 21 335 103 500 Expenses from financial activities 22 332 763 261 - In which : Interest expenses 23 Selling expenses 24 117 019 594 General and administrative expenses 25 124 836 165 10 Operating profit (loss) {30 = 20 + (21-22) – (24 + 25)} 30 89 787 381 11 Other income 31 164 041 393 12 Other expenses 32 381 631 13 Other profit (40=31-32) 40 163 659 762 14 Accounting profit (loss) before tax (50=30+40) 50 253 447 143 15 Current enterprise income tax expense 51 24 485 200 16 Deferred income tax ( expense) credit 52 17 Net profit (loss) after tax (60=50-51-52) 60 Trần Thị Ngọc Ánh- CQ49/51.01 Page 69 - 509 961 943 Academy of Finance Graduation thesis CHAPTER III: SOME SUGGESTION FOR IMPROVING THE ACCOUNTING SYSTEM FOR SALES AND BUSINESS RESULTS IN TOYOTA MOTOR VIETNAM, LTD 3.1 Evaluation of accounting for sales and business result in TOYOTA MOTOR Vietnam, Ltd 3.1.1 Strong points 3.1.1.1 About applying accounting regime The accounting for sales and business result has ensured the consistency and coherence in terms of scope and method of calculation, some economic standards between the accounting department and other related departments and divisions Almost incurred selling and administration expenses are totally collected and displayed in the income statement and notes to financial statements This helps point out mistakes in determining net sales and net income for the company All most transactions are recorded completely, timely and matched with accounting requirements Periodic accounting system is applied, which saves a lot of time and efforts for accountants 3.1.1.2 About accounting entries All original vouchers issued by TOYOTA motor Vietnam, Ltd are suitable with Ministry of Finance’s decisions as well as managerial needs Invoices and vouchers are issued only after collecting enough documents and meeting all sales recognitions Invoices and Trần Thị Ngọc Ánh- CQ49/51.01 Page 70 Academy of Finance Graduation thesis vouchers are arranged and stored chronologically, which facilitates the future examination and uses Reports related to sales status, selling expenses and administration expenses are prepared weekly, therefore it’s easier for managers to review and consolidate 3.1.1.3 About using accounts TOYOTA motor Vietnam, Ltd is now using the chart of accounts stated in Decision No 15 by Ministry of Finance Besides, the company also issues some sub-accounts for easier check – up, recording and reviewing 3.1.1.4 About accounting books The company uses the accounting form of General Journal This form is suitable with a computerized accounting system rather than the manual one Therefore, applying an appropriate accounting system has contributed to productivity increase Each of the five persons in the accounting department is responsible for different accounts and books This task allocation helps to increase the consistency in recording books and facilitate the examination and comparison at the end of the fiscal years Sales reports are formed weekly by subject and by model, which helps managers to catch the sales status In addition, TOYOTA motor Vietnam, Ltd doesn’t apply any sales deductions, which makes the accounting entries for sales easier, simpler and minimizes the possible mistakes Cost of goods sold is calculated year-end in In-out reports which show the increases, decreases and available balance of each type of products Thanks to that, managers can easily realize the present status and predict the future consumption level, and then draw sound decisions 3.1.1.5 About financial reports All financial statements used in TOYOTA motor Vietnam, Ltd have the same form stated by Ministry of Finance These forms are clear, logical and easy-to-follow 3.1.2 Weaknesses Every coin has two sides Despite changes to meet the managerial requirements and changes by Ministry of Finance, TOYOTA motor Vietnam, Ltd also has some Trần Thị Ngọc Ánh- CQ49/51.01 Page 71 Academy of Finance Graduation thesis weaknesses Now, after carefully studying the accounting system for sales and services, I can point out some weaknesses as follows 3.1.2.1 About applying accounting regime Although the periodic accounting system saves a lot of time and efforts, this requires a manual check – up (counting at the warehouse) at the end of the fiscal year It is widely known that there are a lot of stuff things for accountants to complete at the end of the fiscal year such as preparing financial statements, printing ledgers, rearrange files… Therefore, if not effectively prioritizing their to – lists, accountants could not submit financial statements timely 3.1.2.2 About accounting entries In selling and administration expenses, accounts 641 and 642 only reflect the total ending balance of sub-accounts Therefore, if the accountant wants to review the detail for selling and administration expenses, he/she needs to open their sub-accounts, which takes a lot of time In internal sales, the assigned accountant only depends on the goods dispatch cum internal bill note It works only when the transaction happens simply It will be a problem if there are more than related transactions in selling internally 3.1.2.3 About accounting books For account receivables and account payables, the accountant only uses codes for subject parts (each customer and dealer has one unique code) This may create difficulty if the managers not remember all their names Besides, advertising and marketing expenses take a rather large part in the total selling and administration expenses Therefore, it will be clearer and easier to manage if the sub accounts for these activities will be created 3.1.2.4 About financial reports Although financial reports are prepared clearly and logically in accordance with Ministry of Finance’s standard forms, these will be useless if the managers want to compare between two fiscal years Trần Thị Ngọc Ánh- CQ49/51.01 Page 72 Academy of Finance Graduation thesis 3.2 Importance and requirements for improving the accounting system for sales and business result 3.2.1 Importance When Vietnam joined WTO and changed to a market-oriented economy, most companies are required to pay more attention to their sales and business activities Therefore, accurate, timely, complete accounting information is very important for their existence From these reasons, it is necessary to enhance and develop an effective accounting system for sales and business result Besides, the more complicated business activities are, the more complex accounting entries are So, the possible accounting system must be changed flexibly, in both form and content to adapt to changes 3.2.2 Requirements In enhancing the accounting system for sales and business result, the company must comply with following requirements: - Ensuring to follow regulations and laws on accounting issued by Ministry of Finance; - Being suitable with the company’s characteristics and managerial requirements; - Saving time, money and effort; - Providing timely, complete and accurate accounting information 3.2.3 Orientation 3.2.3.1 About initial accounting Initial accounting is the process of recording, booking all economic transactions into accounting vouchers, which are the base for accumulation and conclusion Initial accounting is helpful only when fulfilling all such steps as determining what voucher is needed, how many vouchers will be formed, who is responsible for the vouchers, steps of transferring these vouchers 3.2.3.2 About chart of accounts The current chart of accounts used in most of Vietnamese enterprises is announced by the Ministry of Finance It contains groups of on – balance sheet accounts and off – balance sheet accounts The reflected content, structure and recording methods in these Trần Thị Ngọc Ánh- CQ49/51.01 Page 73 Academy of Finance Graduation thesis accounts are decided by the Ministry of Finance in advance, which every enterprise must compile with However, the arrangement and usage of this chart of accounts are up to the enterprises Therefore, there will be some mistakes if the enterprise has applied in a wrong way or opened unnecessary sub-accounts or had no management on the chart usage 3.2.3.3 About accounting books In order to reflect the consumption status, some accounting books must be issued monthly, quarterly and yearly What books will be issued is dependent on the accounting form applied in the enterprise Recording, accumulating and systemizing accounting information to form financial reports is the biggest phase in financial accounting with a huge number of tasks to This phase needs the assigned accountants to be very good at booking Therefore, the application of a system of accounting books compatible with production scope and characteristics as well as the enterprise’s managerial level will promote accounting productivity, provide enough and helpful information for decision making processes 3.2.3.4 About accounting reports Every company must prepare financial reports in order to consolidate and display accounting information in an effective and easy-to read way For sales activities, the final result is shown in the income statement including revenues and expenses In accordance with the accounting department and managerial requirements, financial reports will be prepared monthly or annually In conclusion, how to enhance the accounting system for sales and business result depends on the accounting department’s performance, the enterprise’s requirements, the regulated accounting decisions by Ministry of Finance and the changes in the whole economy and its markets 3.3 Some suggestions for improving the accounting system for sales and business result in TOYOTA MOTOR Vietnam, Ltd Nowadays, there are many companies updating the accounting software TOYOTA motor Vietnam, Ltd is using General Journal which is not updated until now Therefore, it has some following weaknesses Trần Thị Ngọc Ánh- CQ49/51.01 Page 74 Academy of Finance Graduation thesis - When extracting sales accounts such as 511, 512… and account receivables 131 to excel files, they only displayed the customer column in code, not the full names It will be a problem if someone reads the sales report without knowing the full names of customers Therefore, it is necessary to update to a newer version to have a better and faster accounting tool 3.3.1 Allocating tasks effectively to accountants TOYOTA motor Vietnam, Ltd is a rather large company in manufacturing field Due to a huge number of business activities, accountants are always busy, especially at the end of each month and at the end of the fiscal year In addition, the accounting department has only persons in which one – chief accountant is responsible for examining, checking accounting entries and preparing required reports, and four others are responsible for different tasks There is only one accountant in charge of sales and business result She has a huge number of tasks to do: - Issue invoices and book sales revenue - Calculate cost of goods sold - Book selling and administration expenses - Book some related incomes and expenses - Transfer relevant amounts to net income - Prepare sales report and income statement Therefore, it is very important to allocate tasks more effectively to accountants There are two ways to solve this problem: First is to recruit a new accountant to share some tasks with her Second is to let another accountant in the department help her at the end of each month in preparing accounting reports Opening the third-level accounts For account 131 – Account Receivables, there is only one sub-account 1311100 for all customers Because the company sells not only vehicles, but also spare parts and services, so it’s much better if there are some sub-accounts such as follows Trần Thị Ngọc Ánh- CQ49/51.01 Page 75 Academy of Finance Accoun t No 131 1311 1311100 1311200 1311800 Graduation thesis English name Vietnamese name Account receivables Account receivables – trade Account receivables (Vehicle) Account receivables (Spare part) Account receivables (Other) Phải thu khách hàng Phải thu khách hàng Phải thu khách hàng (Xe) Phải thu khách hàng (Phụ tùng) Phải thu khách hàng (khác) For account 641 – Selling expenses and 642 – Administration expenses, there exists the same problem as the account 131 as above Therefore, I think it would be better if expenses are divided into expenses for vehicles sales, spare parts sales, services sales and others For account 641, for example Account No 641 6411 64111 6411110 6411120 6411130 6411180 64112 6411210 6411220 6411230 6411280 English name Vietnamese name Selling expenses Employees expense Staff labor expenses (vehicle) Staff labor expenses wages (vehicle) Staff labor expenses social insurance (vehicle) Staff labor expenses health insurance (vehicle) Staff labor expenses others (vehicle) Staff labor expenses (spare parts) Chi phí bán hàng Chi phí nhân viên bán hàng Chi phí tiền nhân viên bán hàng (xe) Chi phí tiền lương nhân viên bán hàng (xe) Chi phí BHXH nhân viên bán hàng (xe) Chi phí BHYT nhân viên bán hàng (xe) Chi phí nhân viên bán hàng khác (xe) Staff labor expenses wages (spare parts) Staff labor expenses social insurance (spare parts) Staff labor expenses health insurance (spare parts) Staff labor expenses others (spare parts) 3.3.2 Improving the Sales Discount account Trần Thị Ngọc Ánh- CQ49/51.01 Page 76 Chi phí tiền nhân viên bán hàng (phụ tùng) Chi phí tiền lương nhân viên bán hàng (phụ tùng) Chi phí BHXH nhân viên bán hàng (phụ tùng) Chi phí BHYT nhân viên bán hàng (phụ tùng) Chi phí nhân viên bán hàng Academy of Finance Graduation thesis TOYOTA motor Vietnam, Ltd has no sales deduction such as trade discount, sales return or sales allowances Therefore, sales deduction accounts are not in use There are two ways to solve this problem: First is to delete these accounts Second is to apply sales deduction There are two reasons why this way is much better The first reason is that the enterprise doesn’t need to alert the Ministry of Finance about their deleting these accounts, which follows a lot of complicated administrative procedures The last but not least reason is that sales deduction is one useful way that helps the enterprise promote its sales activities and increase the gross profit 3.3.3 Improving the preparation of accounting reports 3.3.5.1 Report of cost of goods sold Cost of goods sold is one of very important criteria in distribution phase and determining the net profit TOYOTA motor Vietnam, Ltd applies the inventory costing method of weighted average, based on the delivery order After calculating the cost of goods sold the assigned accountant immediately books the cost of goods sold into account 632 In this step there will exist some mistakes if the accountant books the wrong data Therefore, to avoid mistakes and to have evidence for future review, the accountant must prepare the report of cost of goods sold every month I can propose a sample of report of cost of goods sold as follows TOYOTA MOTOR VIETNAM CO, LTD Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Town Tel: (0211) 3868 100 Fax: (0211) 3868 117 REPORT OF COST OF GOODS SOLD Unit: VND Page of No Model Beginning balance Q'ty Amount Increase monthly Q'ty Trần Thị Ngọc Ánh- CQ49/51.01 Page 77 Amount Average unit cost Academy of Finance Graduation thesis Financial Manager Chief Accountant Prepared by (Sign, full name) (Sign, full name) (Sign, full name) 3.3.5.2 Report of selling and administration expenses Every month, the assigned accountant has to prepare report of selling and administration expenses in detail according to managerial requirements However, if two reports are prepared separately, it will be useless when the managers want to compare selling and administration expenses, because the two accounts have the same sub-accounts I can propose a sample of report of selling and administration expenses as follows TOYOTA MOTOR VIETNAM CO, LTD Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Town Tel: (0211) 3868 100 Fax: (0211) 3868 117 REPORT OF SELLING AND ADMINISTRAION EXPENSES Unit: VND Page of No Description Accounts 641 Beginning balance of December 2014 Salaries and bonuses Social insurance Health insurance Selling expenses - Material, packing cost Selling expenses - Tool cost Administration expenses - Stationery cost Administration expenses - Office tools & small equipment Depreciation expenses Outside purchasing service cost others 10 Other cash disbursement expenses 11 Other expenses 12 Transfer to 911 Total incurred amount Trần Thị Ngọc Ánh- CQ49/51.01 Page 78 642 Academy of Finance Graduation thesis Ending balance of December 2014 Financial Manager Chief Accountant (Sign, full name) (Sign, full name) Prepared by (Sign, full name) Part III: Conclusion In conclusion, the thesis with the topic “Accounting for sales and Evaluation of business result in TOYOTA motor Vietnam, Ltd” has already achieved its aims step by step Firstly, the thesis has completely reflected the theoretical background of accounting for sales and business result Secondly, almost all of accounting activities for sales and business result in TOYOTA motor Vietnam, Ltd were listed and analyzed Thirdly, through the above analysis, the strengths and weaknesses of the accounting system for sales and business result were revealed Thanks to understanding the company’s weaknesses of accounting system and the budget limitations as well as managerial level, the thesis has drawn some possible solutions such as accounting system updating, effective task allocation, sub – accounts issuing, sales discount accounts usage, and improvements in accounting report preparation Because of limitation of time and knowledge, mistakes are unavoidable, so I hope to receive more contribution and suggestions from my research supervisor, Ms Cao Phuong Thao, all lecturers in English for Finance and Accounting Faculty at Academy of Finance, and staffs at TOYOTA motor Vietnam, Ltd to make my thesis complete Trần Thị Ngọc Ánh- CQ49/51.01 Page 79 Academy of Finance Graduation thesis REFERENCES Prof Dr Ngô Thế Chi and Dr Trương Thị Thủy, Financial Accounting, Financial Publisher, 2008 Mai Ngoc Anh, PhD and Nguyen Thi My Trinh, MA, Financial Accounting Textbook TOYOTA motor Vietnam, Ltd – Annual Financial Report 2012 – 2014 Websites: - www.vneconomy.vn - www.danketoan - http://toyotavn.com.vn/homes/index/vn Trần Thị Ngọc Ánh- CQ49/51.01 Page 80 [...]... record, track, and report all of the sale transactions daily From these requirements, accounting for sales and business result is established 1.1.3 Functions of accounting for sales and business result In order for requirements of managing goods, sales, determination of business result and division of net income to be met, accounting for sales and business result has to execute some following missions... of accounting for sales and business results in TOYOTA motor Vietnam, Ltd CHAPTER III: Some suggestions for improving the accounting system for sales and business results in TOYOTA motor Vietnam, Ltd PART II: MAIN CONTENT Trần Thị Ngọc Ánh- CQ49/51.01 Page 11 Academy of Finance Graduation thesis CHAPTER I: LITERATURE OVERVIEW 1.1 Overview 1.1.1 Characteristics of goods In general, goods are finished... implementation of state obligations and division process of business result; - Interpreting accounting reports to information users Accounting information must be accurate, easy-to-read and useful Trần Thị Ngọc Ánh- CQ49/51.01 Page 13 Academy of Finance Graduation thesis Therefore, accounting for sales and business result must follow current regulated accounting standards, as well as be adaptable with... and profit gained in form of new investments (3) Payment discount gained (4) Gains from foreign exchange difference incurred during the accounting period (5) Allocating and recognizing pre – received financial income (6) Gains of foreign exchange difference incurred from revaluating monetary items based on foreign currencies at the end of the fiscal year (7) Transferring financial income to determine... Academy of Finance Graduation thesis 1.2.2 Accounting for Sales and Sales Deductions 1.2.2.1 Accounting for Sales a Sales revenue Types of revenues: Sales revenue; Revenue from rendering services; Revenue from deposit interest, selling copyrights, dividends, and distributed profit; and Revenue from trading real estates Sales revenue is the gross inflow of economic benefits during the period arising in the... to do accounting and accounting entries Besides, it is also about preparing accounting reports in which net income and retained earnings are reflected 4 Scope of the study - Time: Accounting fiscal year from 1/4/2009 to 21/12/2012 (Quarter III of the fiscal year form 1/4/2011 to 31/3/2012) - Space: TOYOTA motor Vietnam, Ltd 5 Methodology - The company uses the periodic accounting system, and the inventory... prepaid interests (6) Losses of foreign exchange incurred due to transactions arising during the period (7) Financial investments provision reserved (8) Administration expenses allocated and transferred to determine operation result 1.2.4.2 Accounting for Financial Income a Definition Financial incomes are all incomes gained in relation to financial activities of the company, such as borrowings… b... reflecting and recording occurred transactions and movements of each type of goods and products under quantity, quality, model and value; - Fully, timely, accurately reflecting and recording sales, sales deductions and expenses of each business activity, as well as following and supervising customers’ receivables; - Accurately calculating and reporting results of each transaction; - Monitoring the... restructuring, loss from risky contracts (6) Services rendered and cash expenses (7) Provision reserved (8) Reducing administration expenses (9) Administration expenses allocated and transferred to determine operation result 1.2.4 Accounting for Financial Expense and Income 1.2.4.1 Accounting for Financial Expense a Definition Financial expenses are all expenses incurred in relation to financial activities...Academy of Finance Graduation thesis Thirdly, it is to review the company’s achievements and limitations and to suggest possible solutions to improve the accounting performance for sales and business results in the future 3 Subjects of the study My study mainly focuses on sales, selling expenses, administration expenses, some other related expenses and incomes, and net income – their definitions, accounts ... SUGGESTION FOR IMPROVING THE ACCOUNTING SYSTEM FOR SALES AND BUSINESS RESULTS IN TOYOTA MOTOR VIETNAM, LTD ……………………………………………………………………65 3.1 Evaluation of accounting for sales and business results in TOYOTA. .. of accounting for sales and evaluation of business results in Toyota motor Vietnam, Ltd 2.2.1 List of main products Toyota motor Vietnam, Ltd is an independent legal entity, which has businesses... flexible and effective sales campaign with a well-performed accounting system for sales and business results Because of the importance of accounting for sales and business results, I chose “Accounting