UNIVERSITY OF ECONOMICS AND LAW FALCUTY OF ACCOUNTING - AUDITTING GRADUATION THESIS ACCOUNTING FOR REVENUE, EXPENSE AND DETERMINING OF BUSINESS RESULTS AT MERCEDES - BENZ VIETNAM CO., LTD INTRUCTOR: NGUYEN HOANG DIEU HIEN STUDENT NAME: HA CHUC LY STUDENT CODE: K184050681 CLASS: K18405CA HO CHI MINH CITY, 04/ 2022 DECLARATION I declare that this is my original work and has not been presented in any other studies. The information and documents are also cited clearly. AUTHOR HA CHUC LY i SUPERVISOR’S COMMENT ……………. Ho Chi Minh city,…………2022 Supervisor ii REVIEWER’S COMMENT …………….
Ho Chi Minh city,…………2022 Reviewer iii TABLE OF CONTENTS DECLARATION. ii REVIEWER’S COMMENT. iii LIST OF TABLES. xi LIST OF FIGURE.
xi LIST OF ABBREVIATIONS. Necessity of the research. Research objective and scope of the thesis. Structure of the report .3 CHAPTER 1: BASIC THEORY OF REVENUE AND EXPENSE ACCOUNTING ORGANIZATION AND DETERMINATION OF BUSINESS RESULTS.
Overview about revenue, expense and determination of business results in enterprises. Overview about revenue. Overview about expense. Determination of business results.
Accounting for revenue, expense and determination of business results. Accounting for revenue .Accounting for sales and sale deduction .Accounting of other income .Accounting for financial operating revenues. Accounting for expenses .Cost of goods sold .Accounting for expenses from financial activities .Accounting for administrative expenses.Accounting for other expenses. Accounting for business results .17 viii CHAPTER 1 CONCLUSION: .18 CHAPTER 2: ACTUAL SITUATION OF REVENUE, EXPENSE ACCOUNTING PROCESS AND DETERMINATION OF BUSINESS RESULTS AT MERCEDES - BENZ VIETNAM.
Overview of Mercedes-Benz Vietnam Company. History of formation and development process of MBV. The organizational structure of Mercedes Benz Vietnam .Organizational chart of organizational management .Functions and duties of department. Organizational characteristics of accounting department .Organize the document system .Accounting software used at the company.
Characteristics of sales and service provision, sale deduction and miscellaneous revenue of MBV. Accounting for sales and service provision .Revenue from sale of vehicle, spare parts and provision of services .Principles of revenue recognition from sales and service provision .The process of transferring documents at MBV .Account used at MBV .Accounting transaction for revenue from sales and service provision at MBV. Accounting for miscellaneous revenue .Accounting for miscellaneous revenue at MBV.Other revenue recognition principles .Process of document .Documents and account used.Accounting transaction for other miscellaneous revenue. Characteristics of expenses of MBV.
Selling and administrative expense .Accounting for selling and administrative expense .Account used and process of accounting .Accounting transaction for selling and administrative expense at MBV .Account for COGS .Account used and process of accounting. Accounting for business results at MBV. Accounting for business results. The process of transferring documents.
Provide additional human resources for the finance department. Review and re-check all information of products, thereby improving the accuracy of posting entry. Updating information technology system and maintain the SAP software. Utilizing information technology and advanced warehouse equipment system to rearrange the location of items being stored in the warehouse, especially for components and spare parts.66 x LIST OF TABLES Table 1.18 LIST OF FIGURE Figure 1.1: Revenue recognition condition .2: Structure of MBV……………………………………………………….3: Organizational structure of the company……………………………………….4: Accounting organization flowchart……………………………….5: Revenue recognition process of vehicle .6: Revenue recognition process of spare part .35 xi LIST OF ABBREVIATIONS No.
Abbreviation Meaning 1 CBU Completely Built-Up 2 CEO Chief Executive Officer 3 CFO Chief Finance Officer 4 CKD Completely Knock-Down 5 COGS Cost of goods sold 6 HAXACO Hang Xanh Motors Service Joint Stock Company 7 IAS International Accounting Standards 8 IFRS International Financial Reporting Standards 9 MBGSP Mercedes Benz Group Services Philippines 10 MBV Mercedes-Benz Vietnam 11 PO Purchase order 12 SAMCO Saigon Transportation Mechanical Corporation 13 SAP System Application Programing 14 SCT Special consumption tax 15 SSC Shared Service Center 16 SWT The SAP Wholesale Template (SWT) 17 VAS Vietnam Accounting Standards 18 VAT Value Added Tax xii INTRODUCTION 1. Necessity of the research In the integration age, Vietnam's economy has been constantly developing quickly, which opening up many opportunities and challenges for domestic and foreign investors. Therefore, enterprises need to innovate, actively obtain information, and improve production activities to assert their position and role in the market as well as help the economy of the country to develop in the direction of globalization. At each stage of development, the leaders need to have business strategies and management plans suitable to the economic situation of the country and the world.
There are many tools for effective management, in which the indispensable and important tool is accounting. Besides trade promotion methods to accelerate consumption with the ultimate aim of maximizing profits, businesses need to capture necessary and accurate information and data from the accounting department, which helps managers have an accurate view of the enterprise’s financial situation. From there, making appropriate management decisions in order to improve the efficiency of business management, which can publicly disclose financial information to attract investors. On the other hand, accounting is also constantly improving and developing in terms of knowledge, methods as well as organizational form so as to meet the increasing demands of corporate managers.
The accounting department is associated with economic and financial activities, in charge of the information organization system, as a basis for making economic decisions. For businesses, through accounting, businesses will know which markets and products that are sold the most effectively. This not only ensures the company to compete in a volatile market, but also allows them to achieve their economic goals such as revenue, profit and prestige. In a market economy, the primary objective of an enterprise is to maximize profits.
Therefore, companies need to propose reasonable business strategies to achieve their goals. Adhere with the openness of the economy in Vietnam and radical technology change, the accounting information system is changing and improving to contribute to the truthful reflection of the financial accounting situation at the enterprises. It plays an 1 important role in helping managers propose reasonable business strategies, improve the efficiency of production and operation activities, and determine the success or failure of enterprises. It is necessary to accurately, comprehensively, and timely determine the current business income and expenses in order to have a strong financial background.
Revenue, expenses, and operating results are not only important information for the company, but also for the state, investors, and other financial institutions. The convincing figures of accounting system will advise managers to make correct, accurate and timely decisions in the management, administration and development of the company. Recognizing the importance and role of accounting impact business’s operation and development, the author chooses the topic “REVENUE, EXPENSE ACCOUNTING AND DETERMINATION OF BUSINESS RESULTS AT MERCEDES - BENZ VIETNAM CO. Research objective and scope of the thesis This thesis aims to analyze the revenue, expense accounting and determination of business results at Mercedes - Benz Vietnam Co.
Base on the findings; the author also recommends several solutions to improve the accounting work in the company. Specific objectives are as following: - Systematize the general theory related to revenue, expense accounting and determine business results through the business process at the company such as purchasing, selling, managing and accounting. - Analyzing the current situation of revenue and cost accounting, and determine the business results of Mercedes - Benz Vietnam Co., Ltd through SAP software. - Based on the theory findings and data analysis, the author also recommend several solutions to improve the accounting work of the company.
Methodology In order to achieve the mentioned objectives, the author has used different methods: - Inheritage method: inherit previous study and accounting standards related to revenue and expense in order to build a basis for determining business results of Mercedes-Benz Vietnam Company. This method is used to achieve the first objective. - Observation method: used during the actual working process, for achieving the second and third objectives 2 - Analyzing method: analyze data; identify problems and causes of the problems, used for the fourth objectives. Structure of the report Apart from the introduction and conclusion, the thesis includes three following chapters: - Chapter 1: Basic theory of revenue and expense accounting organization and determination of business results - Chapter 2: Analysis of actual situation of revenue, expense accounting process and determination of business results at Mercedes - Benz Vietnam Co., Ltd - Chapter 3: Recommendation to improve the performance of revenue, expense accounting and determination of business results at Mercedes - Benz Vietnam.
Contribution The result of this thesis can contribute to help MBV Company identify strengths and weaknesses of revenue and expense accounting performance, then can improve this fields more successfully in the future. In addition, the thesis is also a reference for other students in the next courses. Limitation The author has made great efforts do research and complete the thesis, but due to shortcoming of the ability and knowledge, limited time and scope of information searching and data collecting; thus, the content of the report is not sufficient and comprehensive. The author will continue to research and improve the topic more deeply in the future studies with more accurate, complex information and extended analysis to capture all the scope.
CHAPTER 1: BASIC THEORY OF REVENUE AND EXPENSE ACCOUNTING ORGANIZATION AND DETERMINATION OF BUSINESS RESULTS Chapter 1 summaries the theories, studies and results of many researchers on revenue and expense accounting of a company and its determinants. Thereby points out a suitable theoretical framework to analyze the effectiveness of the accounting work in the next chapter. Overview about revenue, expense and determination of business results in enterprises 1. Overview about revenue 1.
Definition "Revenue will be used as a general term for the amount of assets received or liabilities liquidated as consideration for the sal of products, the rendition of services, use of resources, exchange of assets, or liquidation of liabilities in a transaction which increases or decreases the net assets. IAS 18 defined revenue as the gross inflow of economic benefits during the period arising in the course of ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants (para. According to Vietnam Accounting Standards Number 14 (VAS14 - Other Revenue and Income), issued under decision No. 149/2001/QD-BTC dated December 31, 2001 of the Ministry of Finance: Revenue is the total value of the economic benefits obtained by the enterprise in the accounting period, arising from the usual production and business activities of the enterprise, contributing to the increase in equity.
Although there are many different concepts of revenue, it can be understood that the nature of revenue is the total value made by the sale of products, goods or the provision of services to customers. Be aware of the nature of revenue and properly determine the scope, time and basis for recording revenues that are decisive in nature to the objectivity and honesty of revenue targets and results in financial statements. Therefore, it is necessary to determine the right time to record revenue. Revenue recognition For an enterprise, sources of revenue included: - Sales: Selling products produced by enterprises and selling purchased goods; - Providing services: Perform the agreed work under the contract in one or more accounting periods; - Interest, royalties, dividends and profits are divided.
4 Revenue should be measured at the fair value of the consideration received or receivable (IAS 18. • Less trade discounts and volume rebates • Less certain sales incentives Incentive management can affect the amount of revenue recognised in the reporting period. The value of the invoice to be recognised is subject to the incentive scheme in place at the time of invoicing. In most cases, the consideration is in the form of cash or cash equivalents and the amount of revenue is the contractually agreed amount of cash or cash equivalents received or receivable such as net invoice value from the sale of goods.