- June 24, 2021
- Posted by: Thu Phuong
- Category: Business support
ACCOUNTING BOOK MAKING PROCESS FOR PRODUCTION ENTERPRISES
Step 1: Gather documents - This step is the most important step in making accounting books.
1. Invoice documents: Must comply with 3 principles "Legal, reasonable and valid".
1.1. Legal invoice:
– Invoices must be registered with the tax authority and accepted for issuance by the tax authority.
– Invoices printed by production and business establishments themselves must be printed according to the prescribed form and accepted by the tax authority as an electronic invoice form.
=> Some risks of receiving input invoices: Enterprises have real goods purchase and sale transactions, full financial invoices and no payment via bank if the invoice is worth > 20 million. Enterprises that provide goods services but these goods are not within the scope of that enterprise's business activities.
1.2. Valid invoice:
– A valid invoice is understood as conformity with practices, the invoice must ensure sufficient content and criteria and requirements written on the invoice such as:
+ Clearly state the date, month, year of invoice, full name of buyer, seller, address of purchasing company, tax code, form of payment in cash (If paying in cash), bank transfer (If paid by bank deposit).
+ Clearly state the order number, name of goods and services, unit of calculation, quantity, unit price and amount, tax rate, VAT (If any) and total payment on the invoice.
+ There must be the signature of the buyer, the seller, and the signature of the Director. If there is no signature of the Director, there must be a letter of authorization and a stamp hanging on the left corner of the invoice.
– Invoices must be prepared in accordance with the principles and requirements of Circular No. 39/2014/TT-BTC dated March 31, 2014.
1.3. Reasonable invoice:
When talking about reasonableness, we are talking about reasonable costs. The cost of legal and valid invoices is not enough, but the reasonableness of the invoice must also be included. The content on the invoice must be correct and consistent with the business content and related to production and business activities within the scope of the Enterprise's operating license.
2. Bank documents
– Debit note, payment order, check (If electronic transfer, confirmation of internet banking transfer is required).
– Credit note: Notice of credit payment to the account or accounting slips for payment to the account of Company employees, or money transfer slips from customers.
– Bank accounting slip includes:
+ Bank subsidiary book.
+ Bank statement.
– Bank documents often generate sales transactions or other related transactions through the Enterprise's bank.
3. Documents for payment to the state budget (via electronic tax payment or cash payment to the treasury).
– Corporate income tax (When tax payable for the quarter or year arises).
– VAT (When incurred in a month or quarter, it must be paid).
– Personal income tax (must be paid when incurred in a month, quarter, or year).
Step 2: Enter documents into the book to reflect through accounting entries of arising economic transactions:
Invoices, bank documents, payment slips to the state budget, payroll, depreciation tables, allocation tables, etc. will be accounted for in relevant accounts in the accounting books.
Note the terms:
– Purchase invoices from manufacturing enterprises can be purchased for storage or purchased and exported directly to the production workshop. If purchasing and warehousing, the accountant must prepare a raw material warehouse receipt or CCDC and enter the items on the warehouse receipt into the warehouse receipt list. If the purchase does not have a warehouse receipt and is exported directly to the production workshop, the accountant must make a request for raw materials to be issued to that production workshop.
- Sales invoices of enterprises are based on copy 3 of the invoice to account in the book and at the same time serve as a basis for preparing warehouse delivery notes.
Step 3: Collection of costs are important factors in determining the costs of an enterprise:
– Salary table: Based on Circular 03/2015/TT-BLDTBXH of the Ministry of Labor, Invalids and Social Affairs.
– Depreciation table: Based on Circular 45/2013/TT-BTC.
– Prepaid cost table.
– Inventory import and export table, product cost calculation table to determine cost of goods sold, cost of raw materials, CCDC ex-warehouse "Cost price calculated according to the average method at the end of the period".
+ Other related costs.
=> Based on the documents collecting accounting costs, proceed to record those costs on the books in the following order:
– Payroll Calculating salaries payable to office staff and production staff Debit Account 642 Debit Account 622/1542 Credit Account 334
Insurance deduction Debit Account 642 Debit Account 622/1542 Debit Account 334 Credit Account 338 Personal income tax deduction Debit Account 334 Credit Account 3335
Paying salaries to employees Debit Account 334 Credit Account 111/112
– Depreciation table of fixed assets Depreciation for office department Debit Account 642 Credit Account 214 Depreciation for production department Debit Account 627/1543 Credit Account 214
– Allocation table Allocation to office department Debit Account 642 Credit Account 242 Allocation to production department Debit Account 627/1543 Credit Account 242
– Collection of product cost calculation costs Collection of raw material costs Debit Account 621/1541 Credit Account 1521 Credit Account 1522
Collection of CCDC and fuel costs (If any) Debit Account 627/1543 Credit Account 1523 Credit Account 153
Transfer to expenses 154 (Applicable to businesses using Circular 200/2014/TT-BTC) Debit Account 154 Credit Account 621 Credit Account 622 Credit Account 627
– Warehouse of finished products completed during the period Debit Account 155 Credit Account 154
– Collection of cost of semi-finished goods exported Debit Account 632 Credit Account 155
– Closing entries
+ VAT transfer in the period Debit Account 3331 Credit Account 133
+ Transfer of revenues Debit Account 511 Debit Account 515 Debit Account 711 Credit Account 911
+ Transfer of expenses Debit Account 911 Credit Account 632 Credit Account 635 Credit Account 642 Credit Account 811
+ Determination of business results (In case the enterprise is profitable) Debit Account 911 Credit Account 421
+ Determination of business results (In case the enterprise has a loss) Debit Account 421 Credit Account 911
AACS AUDITING COMPANY LIMITED