Name: Bui Thanh Huong

Class : Auditing
Student code: 11121841

ABBREVIATION
LIST OF TABLES
LIST OF FIGURES

PREFACE
As Vietnam a developing country has entered the new modern era of economy and
technology, the demands of product and service consumption in various field. Especially
when our country conduct the "Industrialization - Modernizing" broadly and
comprehensively, economic development is being carried out speedily and human
resources have played a very important role in the development of the country recently
which requires a large amount of professional customer service. Thus, the need for
learning foreign languages leads to the outburst in the establishments of language
schools. Among those language schools, Language Link Vietnam which is a English
teaching center has 20 successful years of operating in Vietnam thanks to well-trained
and excellent staffs including accounting department.
More specifically, during those 20 years, Language Link VN has always ranked 1st for
profit and sales revenues. The reason behind this success is that any business must control
input and output with their best effort, which will be supported or even decided
effectively by the accounting profession, especially when the competitiveness among the
enterprises is becoming sharper, more intense and severe. Being deeply aware of the
importance of accounting, Lac Hong Investment Company has also consider accounting
focus and improvement as a vital stage in its stable development strategy.
After the time practicing at Language Link Viet Nam Company, I had the opportunity to
learn more about the characteristics of accounting in practice besides applying the
knowledge learned at school by the best way. Overall, I will introduce you the basic
accounting system in the company generally. Besides Introduction and Conclusion, the
report has three chapters:
Chapter 1: Overview of the company
Chapter 2: Accounting department and accounting system
Chapter 3: Some remarks on financial accounting management.
Special thanks go to Dr , teacher in School of Accounting and Auditing, National
Economics University and colleagues in accounting department of Language Link Viet
Nam Company for their patience, understanding and enthusiastic guidance for me in
completing this report.

Chapter 1: OVERVIEW OF LANGUAGELINK VIET NAM COMPANY

Establishment and Development of Language Link Viet Nam Company:
Give some basic information of Language Link Viet Nam Company:
+ Transaction name: Language Link Viet Nam Company.
+ Director: Mr. GAVAN IACONO.
Lines of business: Education.
Headquarters: No.62, Yen Phu street, Nguyen Trung Truc ward, Ba Dinh district, Ha Noi
city
Tel: (+84) (4) 39273399
As a member of the International Language Link Group (UK), Language Link Vietnam is
also part of Language Link's network coverage throughout the UK, Russia, and China.
Language Link Vietnam company is also a strategic partner of international education
group Navistar, NCC, ETS, IIG Vietnam, and more than 30 universities worldwide
reputation.
Language Link International established with headquarters in London, UK .Language
Link Viet Nam is the first educational institution in Vietnam to bring English language
teaching programs according to international standards, creating a prerequisite step to
help you reach the advanced education and qualifications are internationally recognized.
Language Link Vietnam and keeps on working to become the organization of teaching
English is the best known, as well as address TOEIC, TOEFL and IELTS reputation for
you in Vietnam. It have been operating in Vietnam for nearly 20 years, and will continue
to do so for years to come as well. Now, Language Link Viet Nam have four schools in
Ha Noi, one school in Ho Chi Minh city.
With operations in the history of nearly 20 years, Language Link Vietnam is the first
educational institution in Vietnam to bring English language teaching programs according
to international standards, creating a prerequisite step to help reach out to education and
advanced degrees are internationally recognized. With top quality education, Language

Link Vietnam committed to the program easy to understand and effectively to students of
various ages and different backgrounds.
Language Link Vietnam keeps on working to become the organization of teaching
English is the best known, as well as address TOEIC, TOEFL and IELTS reputation.
Language Link Viet Nam has stated its values on the way growing are ethic, quality,
respect, and sustainability, which can be seen as serving customers with high standard set,
treating employees with high encouragement and trust, as well as planning and acting
sustentative for the future development. In order to expand and develop the company,
many subsidiaries and associates are established in many fields of business.
Characteristics of the Business Operation of Language Link Viet Nam company:
Functions and Responsibilities:
Activities of Language Link Viet Nam Company includes provide English course:
+ English for very young Learners
+ English for Primary
+ English for Secondary
+ English for Academic
+ TOEFL Preparation
+ TOEIC Preparation
+ Corporate training
+ IFY
+ GET
+CELTA
+ English for very young Learners : The VYL program at Language Link was developed
exclusively for our students by experts in early childhood development and language
learning. Targeted to match the developmental pace of children aged 4 to 6 years,
students in our VYL program learn English the way native speakers learn it by using it.
Language Link provides Very young learners need a safe, fun and comfortable learning

environment with a lot of individual attention from teachers and TAs. In this
environment children can smoothly progress through the developmental stages all
children go through like developing their fine motor skills, as well as the various stages
of literacy first learning to recognize single letters, then recognizing whole words in
English and finally learning to write.
+ English for Primary: we use the Communicative Method, internationally recognized
best practice in English language teaching. Students learn English the way native
speakers learn English by using it. We teach grammar in both theory and practice,
through lessons that are dynamic, interactive and engaging, which will get your child
communicating in English with confidence. In Language Links English for Primary
Students program students are also exposed to international exams of English for the first
time. Our communicative approach to English teaching, coupled with ongoing practice
in international test material, fully prepares your child for entry into secondary school.
- English for elementary students: Language Link is the only English training center in
Hanoi that meets both your secondary students academic needs. At Language Link, we
teach English both in theory and practice, familiarizing students with the test material,
they will see on their end of year and high school entrance exams while at the same time
improving their English the way natives do by using it. And Language Link includes
tailor made writing practice for our students, allowing them to improve this vital skill
through practice that is engaging and culturally relevant to Vietnamese teens.
+ English for Academic: The English for Academic Purposes program at Language Link
gives students the academic skills they need to succeed in any International Foundation
Year or university program, whether here in Hanoi or overseas. Both language and nonlanguage based skills like critical thinking are practiced to an international standard,
yet are still relevant to university study in Vietnam.
- TOEFL Preparation: The TOEFL preparation courses at Language Link continue the
Academic English pathway with three course options for students of varying levels,
meeting their TOEFL iBT needs no matter their target score. TOEFL is accepted by more
than 9,000 colleges, agencies and other institutions in over 130 countries so students who
plan to study overseas, or simply want to learn at a Western style university in Vietnam,
can prepare for their exam at Language Link. Nearly all of the assessment for Language

Links TOEFL preparation courses is done in an actual ETS test center, so when it comes
time to take the real exam, our students will have already experienced what test
conditions are like, adding to their level of comfort and confidence. Whether you want to
study overseas or just want to impress friends and family with your English level as
proven on an international exam which has been taken by more than 30 million people
worldwide, Language Link has the TOEFL preparation course for you.
- TOEIC Preparation: The TOEIC preparation courses at Language Link provide two
course options for students with lower or higher target scores. TOEIC is used as a
benchmark for promotion and hiring in many of the biggest companies in Vietnam.
University students to satisfy their English language requirement also use it. LLVs +
TOEIC Prep courses can prepare both types of student for their TOEIC exam. Nearly all
of the assessment for Language Links TOEIC preparation courses is done in an actual
ETS test center, so when it comes time to take the real exam, our students will have
already experienced what test conditions are like, adding to their level of comfort and
confidence.
+ The Professional English program: The Professional English program at Language Link
focuses on skills and topics related to the workplace for working people or university
students planning to enter the workforce upon graduation. The Professional English
program at LLV also has a strong focus on TOEIC test taking skills , which including the
offer of practice tests in a real ETS test center for students enrolled in certain courses
because TOEIC is the main benchmark test used by Vietnamese corporations for hiring
and promotion, as well as a way to fulfill the language requirement at many Vietnamese
universities.
Features of the Business Operation:
1.2.3. Process of Producing Goods:

1.3 Organizational Structure of Language Link Viet Nam Company:

Gavan
-Director

Hang
Deputy
Director

SMT

Aca
Dept

Lam
Deputy
Director

S&
M
Dep
t

F&A
Dept

Cor
p
Dep
t

IFY
Dep
t

SL
Dep
t

CELT
A

- Board of Director: Working on behalf of the owners of the company, implements the
rights and obligation of the owners of the company; acts on behalf of the company to
exercise the right and obligation of the company; represent as to be liable to the law and
the owners as of the company. For the performance of the power and duty assigned under
the provisions of the new Enterprise law and other relevance laws . Rights, obligations,
duties and specific working mode of the Board of Director for the companys owners
shall comply with the provisions of the charter of the company and the relevant laws.
- Deputy Director: Deputy Directors are responsible for all business activities of the
company before Board of directors and Government about obligations to Government,
the equity as well as the employees conditions. Directors may decide to appoint,
dismiss, reward and discipline subordinates. They also operates and controls economic
plans, accounting procedure, paybacks, settles debts and deals with economic issues of
the company with stakeholders....
- SMT : SMT includes four schools in Ha Noi city and Ho Chi Minh city which provides
English course directly for customers.

- Academic Department: Academic department devoted to a particular academic

discipline. This department designs the program of the course, prepares the books and
materials for teacher, reports, and certificates , checks attendant of the class.
-Financial Accounting Department : Financial Accounting Department advises the
director on the financial operations of the company and takes responsible to the law and
the director for the accuracy and truthfulness of the financial performance of the
company. Moreover, Financing Accounting Department also manages and utilizes funds,
assets in accordance with as laws requirements and makes full payment for the
compensation and welfare of laborers; deceives and managing.
- Sales and marketing department
- Corporate department:

Corporate department specializes in designing and

implementing English training programs for both local and international corporations, as
well as for government agencies and non-governmental organizations. They offer
language proficiency courses to help executives and their staff communicate more
effectively in the global marketplace, courses range in level from Beginner all the way to
Advanced. Their past and current clients include the following: the Bank for Investment
& Development in Vietnam (BIDV), EVN Genco power generation, General Electric
Company ltd, VINACOMIN coal and mining corporation, Canon, Vietnam Bank for
Agriculture and Rural Development .
- IFY department: IFY (International Foundation Year ) department which forms the first
year of a suite of integrated program for those international students who have the
potential and motivation to succeed, but who do not yet have the formal qualifications
required for entry to level 1 of a University of Leeds undergraduate degree program.
- School link department: This department links with many primary and secondary
schools in Ha Noi and supply English course for them.
- CELTA: This department accredited CELTA training centre in Hanoi, offering custombuilt facilities and top-quality trainers.

Financial Position and Operational Results of Language Link Viet Nam Company:

Items

2014

2013

2012

Current Assets

38,280,339,431

46,299,705,269

48,042,569,589

Total Assets

53,170,684,040

61,732,512,429

66,725,145,968

Current Liabilities

28,916,842,386

32,109,721,373

33,648,886,921

Total Liabilities

46,843,877,101

52,579,856,196

53,836,695,343

Stockholders Equity

57,481,806,939

57,547,656,232

89,278,450,625

Table 1.2.

Operational Results in 2014, 2013, 2012 (VND)

Items

2014

2013

2012

Revenues

215,635,744,857

201,534,671,477

187,434,551,659

Income before Tax

165,419,153,431

150,903,189,952

140,866,558,083

Income after Tax

148,877,238,088

135,812,870,956

126,779,902,275

Table 1.3. Ratio for the effectiveness of operation:

Items

2014

2013

2012

Return on Assets (ROA) = Income after tax / Total

0.28

0.22

0.19

Assets

Return on Equity (ROE) = Income after tax /

2.59

2.36

1.42

Net Profit Margin = Income after tax / Revenues

0.69

0.67

0.64

Current ratio = Current assets / Current liability

132.38% 144.19% 143.99%

Stockholders Equity

The companys profitability has been increasing steadily for the last 3 years.

Chapter 2: ACCOUNTING DEPARTMENT AND ACCOUNTING SYSTEM AT

LANGUAGE LINK VIET NAM COMPANY.
2.1. Accounting Department of the Language Link Viet Nam Company
Language Link Viet Nam Companys financing and Accounting Department has eight
members, who are organized in the form of accounting focus. Starting from the
characteristics of business, organizing accounting apparatus is in accordance with

regulatory requirements and accounting process in corporations. This department has

functions to collect and process, provide all the economic information, thereby testing the
working plan, checking the use and protection of assets, materials and capital in order to
ensure autonomy in business, and financial autonomy of the corporation.
Based on the volume, nature and complexity of the arising economic transactions as well
as the competence and qualifications of the staff, in order to complete all the assigned
tasks and assure the reasonable responsibility allocation, the accounting department is
organized follow vertical function model as below:

Chef Accountant

Salaries and
wage accountant

Lang Ha sales and

cash accountant

Sales and cash

accountant

DCV sales and

cash accountant

Bank
Accountant

Fixed assets and

inventory accountant

TQH sales and

cash accountant

Yen Phu sales and

cash accountant

+ Chef Accountant: Chief Accountant works as an assistant to the director to direct the
implementation of the companys accounting, advise the company about controlling
mechanisms of financial-economic activities. Chief accountant is in charge for the
accuracy and timeliness of financial information of the company. Chief accountant also
executive direction and supervision of staff in doing the works, which they responsible to
make sure that all the financial information are presented fairly and truly.
+ Bank accountant: responsible for the payment procedures through Bank, monitoring the
principal debt, interest and credit institutions, end of month tabulated detailed report.

Treasurer will manage the cash fund of the company; follow the transactions of the
company with banks such as bank loans, bank deposits; process bank reconciliation.
+ Fixed assets and inventory accountant: Accountant for fixed assets and inventory will
subscribe the fluctuation of fixed assets, depreciates fixed assets periodically; subscribe
details of the assets of the company on the cards and fixed asset register. They also
monitors the input, output and inventories of materials; collect original documents related
to the materials as the basis for comprehensive accounting; takes charge of payment
transactions with customers, employees, officers and the other payment obligations of the
company with the state, and tax authority. Moreover, they follow account receivables,
payables, control provisions, advances and prepayments; and conducts stock count and
check for assets and inventories.
+Salaries and wages accountant: They common duties include creating sales and cash
flow reports, administering payroll, keeping balance sheets, carrying out billing activities,
managing budgets and keeping inventory. The accountant may also be responsible for
filing taxes for the company, as well as reviewing past reports to generate income
forecasts.
+ Sales and cash accountant: Keeps track of payables to suppliers and receivables from
customers, also records sales revenue, expense, and summarizes monthly, calculate VAT,
etc. It includes four SMT school sales and cash accountants.

2.2. Accounting System Applied at Language Link Viet Nam Company.

2.2.1. The Main Accounting Policies Adopted:
+ Accounting regime:
Before January 1st 2007, the company applied accounting regime Decision
No.1141BTC/CKT dated November 1st 1995 by Ministry of Finance.
From January 1st 2007 up to now, the company has applied new accounting regime for
medium and small companies Decision No.48/2008/QD BTC dated September 14th
2006 by Ministry of Finance.
+ Currency unit: Vietnam Dong (VND)

+ Accounting period: The fiscal year begins on January 1st and ends on December 31st.
+ Inventory accounting method
Principle of recoding inventory: Historical cost principle
Inventory costing method: Weighted average method
System to account: Perpetual inventory system.
+ Accounting method: recording vouchers
+ Fixed asset depreciation method: straight-line method (follow Decision203/2009/QBTC dated 10/20/2009)
+ Inventories: Accounting perpetually
+ Cash accounting method: Foreign currencies arising in business transactions are
converted into Vietnam dong at the actual exchange rate at the time of the transactions. At
the end of the accounting year, monetary assets and liabilities denominated in foreign
currencies are converted at the average exchange rate in the interbank by the State Bank
of Vietnam announced at the end of the accounting year.
The differences between value of foreign currencies, which are arisen in accounting
period, and value of foreign currencies, which are revaluated at the end of the accounting
year, will be transferred to the Income or Financial expenses in the fiscal year.
+ Method of VAT calculation: Tax deduction method of 10%
2.2.2. Accounting documentations & vouchers:
- The accounting documents system applied in Language Link Viet Nam is followed
Decision No.48/2008/QD BTC dated September 14th 2006 by Ministry of Finance. All
documents are complied with the content, method to prepare and sign of Accounting laws
and Decree No.129/2004/ND-CP dated May 31st 2004 by Government.
- All the original documents which were prepared inside or outside the company must be
collected and gathered by accounting department. When all documents are collected, the
accountants will conduct the thorough inspection of the original documents belong to
their responsibility. Only after inspection and verification proves that these documents are
correct, accountants use these documents to record the accounting entries.

The types of vouchers used:

-Required documents: These documents are standardized about specifications, formats
and norms reflected in the vouchers, the purposes and methods of documentation by the
State, including:
+Receipts
+Payment cards
+Receipts
+VAT invoice
+Ordinary sales invoice
+Delivery note cum internal transport
+Delivery note for shipping goods to agent
The list of purchased goods without invoices
Recording vouchers
-Instructed documents are used inside the company internally with the guidance of
Finance Ministrys documents such as timesheets, payrolls, delivery notes, receipt notes,
delivery records, credit notes, debit notes, inventories list...
Accounting documents procedures
- The process of rotating accounting documents:
Step 1: Create, receive, and handle/process accounting documents
Step 2: Accountants and chief accountant check and sign in the accounting documents or
submit to the Director to sign and approve
Step 3: Classify, arrange accounting documents, account and record the transactions :
Step 4: Store, preserve the accounting documents : Accounting documents that are stored
and preserved must meet the following requirements:
- The process of inspection procedure:
Step 1: Check for the clarity, integrity, completeness of the criteria and factors recorded
in the accounting documents
Step 2: Check for the legality of arising economic-financial transactions, which are
recorded in the accounting documents; compare accounting documents with other
relevant documents.

Step 3: Check for the accuracy of the data and information in accounting documents
2.2.3. Accounts in Accounting System
The company is applying the accounting system according to the decision
15/2006/Q-BTC of 09/14/2006 issued by the Ministry of Finance.
Code Account
Type 1: Current assets
111
Cash on hand
1111
VND
1112
Foreign currencies
112
Cash in bank
1121 VND
1122 Foreign currencies
1123 Gold, Silver, precious stones
121
Short-term financial investments
131
Trade receivables
133
VAT deduction
1331 VAT on purchase of goods
1332

VAT on purchase of fixed assets

138

Other receivables

1381

Shortage of assets awaiting resolution

1388
141
142
152
153
154
155
156

Others
Advances
Short-term prepayments
Raw materials
Tools and supplies
Work in progress
Finished goods
Merchandise

157

Outward goods on consignment

159

Allowances
Allowance for decline in short-term

1591
1592

investment
Allowance for bad debt

Code Account
Type 2: Non-current assets
211
Fixed assets
2111 Tangible fixed assets
2112 Finance lease fixed assets
2113 Intangible fixed assets
214
Depreciation of fixed assets
2141 Depreciation of tangible assets
2142 Depreciation of finance lease assets
2143 Amortization of intangible assets
2147 Depreciation of investment property
217
Investment properties
221
Long-term investment
Allowance for decline in value of
229
long-term investments
241
Construction in progress
2411 Fixed assets prior to commissioning
2412 Construction works
2413 Major repairs in progress
242
Long-term prepaid expenses
244
Long-term deposits
Type 3: Liabilities
311
Short-term borrowings
Current portion of long-term
315
liabilities
331
Trade payables
Taxes and other payables to State
333
budget
3331
VAT
33311 Output VAT
33312 VAT on imported goods
3332
Special consumption tax

1593
171

Allowance for decline in inventory

value
Repurchase Government bonds

3334
3335
3336

Corporate income tax

Personal income tax
Tax on use of natural resources
Land and housing tax, and rental

Type 4: Owners equity

3337

411
4111
4112
4118
413
418
419
421
4211
4212

3338
3339
334
335
338

charges
Other taxes
Fees, charges and other payables
Payables to employees
Accrued expenses
Other payables

3381

Surplus of assets awaiting resolution

3382
3383
3384

Trade union fees

Social insurance
Health insurance
Long-term deposits and collaterals

Operating capital
Contributed capital
Capital surplus
Other capital
Exchange rate differences
Equity funds
Treasury shares
Retained earnings
Retained earnings brought forward
Profit/Loss for the current year

Type 5: Revenue

3386

511
5111

Sales Revenues
Revenues from sales of merchandise

3387
3388

received
Unearned revenues
Others

5112

Revenues from sales of finished goods

3389

Unemployment insurance

341

Long-term borrowings and liabilities

3411
3412
3413
34131
34132
34133
3414
351
352
353
3531
3532

Long-term borrowings
Long-term liabilities
Issued bonds
Par value of bonds
Bonds discounts
Bonds premiums
Long-term deposits received
Provision for severance allowance
Provisions
Welfare and reward funds
Reward funds
Welfare funds
Welfare funds used for fixed asset

5113 Revenues from services rendered

5118 Other revenue
515
Income from financial activities
521
Sales deduction
5211 Trade discounts
5212 Sales returns
5213 Sales rebates
Type 6: Costs of production and business
611
Purchases
631
Production costs
632
Costs of goods sold
635
Financial expenses
642
Business expenses
6421 Selling expenses
6422

Administration expenses

Type 7: Other income

711
Other income
Type 8: Other expenses
811
Other expenses
821
Income tax expense

3533
356

investments
Investment and development fund

Type 9: Income Summary

911

Income Summary

Type 0: Off Balance Sheet Accounts

001
External operating leased assets
002
Goods held under trust or processing
003
Inward consignment goods for sale and goods held as collaterals
004
Bad debts written off
007
Foreign currencies
In addition, the company also opened several sub-accounts to fit the nature of business
and to create favorable conditions for accounting. For example:
Account 111: Cash on hand
+Account 1111: VND
+Account 1112: USD
Account 112: Cash in bank
+ Account 1121: VND
+ Account 1122: USD
+ Account 1123: Gold, silver and precious stones
Account 511: Sales Revenue
+ Account 5111: Revenue from sales of merchandise
+Account 5111.01: Revenue from sales of merchandise to hospitals
+Account 5111.02: Revenue from sales of merchandise to wholesalers
+Account 5112: Revenue from sales of finished goods
etc.
2.2.4. Accounting Books:
The system of accounting books of Language Link Viet Nam comply with Decision
No.48/2008/QD BTC dated September 14th 2006 by Ministry of Finance. The form of
accounting books is General Journal. However, to simply accounting work and achieve
highest efficiency, the company used accounting software. Recording process by
computer to enter data only once, the computer will automatically process and record in
books and accounting statements to provide information for the user.
The basic feature of General Journal form is that all business transactions which incurred
must be recorded in the journal, especially focus on the General Journal, follow the order

of the time arising and the economic content (the accounts) of each transactions. After
that, accountants gather data in the general journal to record transactions in ledger.
Every day, base on the accounting documents, accountants identify debit account, credit
account and enter data into computer which is designed by accounting software.
In the process of accounting software, that information is classified, summarized,
allocated, etc and automatically entered into the general journal, detailed accounting
books or accounting cards.
In the end of month (or at any time is needed), accountants close the book and prepare
financial statements. The comparison between general ledger and summary table is done
automatically to ensure the accuracy and reliability of the information which has been
recorded in the period. Accountants also check and compare the data between the
accounting books and the financial statements after printed on paper.
At the end of the accounting period, accounting book is formed as files with general and
detailed information for each item such as Sales journal, Income and disbursement
journal, general ledger and subsidiary ledgers, financial statements, tax statement, etc.
In manual condition, the content of General Journal is presented:
: General Journal process

SOURCE DOCUMENTS

General Journal

Detailed books

General ledger

Trial balance
2.2.5. Accounting Statements:

Note:
Record daily
Record monthly
Comparison

FINANCIAL
STATEMENTS

Summary table

The financial statement preparation has 4 parts: Balance Sheet or Financial Position
Statement, Income Statement, Cash Flow Statement (Direct method), and Financial
Statement Disclosure.
Those statements will be prepared by accounting department with the stamp of the
company and the signatures of the creating accountant, chief accountant as well as
director at the end of fiscal years 31st December.
2.3. The Main Accounting Cycles Applied by the Language Link Viet Nam Company:
2.3.1 : Accounting procedure for overhead costs:
Overhead costs include many kind of costs such as management team salary, social
insurance deductions, health insurance, union funds, unemployment insurance are
specified on the wages paid to direct workers and management employees, depreciation
of fixed assets used in the operation of the unit and other costs related to the unit. This
cost usually has an indirect relationship with profits and associated to organizing,
servicing and sale the product.
To accumulate the production costs incurred under the expense items ( direct material
cost , market research cost , manufacturing overhead cost), the accountant open a detailed
accounting book for management overhead costs.
S CHI PH SN XUT KINH DOANH
Ti khon:.S hiu.
Tn phn xng, b phn..

Chng t
S
Ngy
hiu
A

thng
B

TK
Din gii
C
S d u k:
SS pht sinh trong k:

Ghi N TK .
Chia ra
Tng

ng
D

s tin
1

6.

.
..
Cng pht sinh
Ghi C TK: .
S d cui k:
Accounts used : 627 used to reflected and allocated the overhead production costs.
+Accounts 6271 - Cost of management team staff: Reflecting the salaries, allowances
paid to personnel management workshops, parts, production team; mid-shift meals of
management staff, workshop, parts manufacturing; deductions for social insurance, health
insurance, trade union funding is calculated according to the proportion of the current
provisions on wages paid to staff , departments. For unit costs, the indirect method is
tracking employee attendances. Thus, the payment of salary, allowances ...are made by
the accounting department of the company. Monthly, based on timesheets conducting
wage and payroll department conducts wage and salary deductions of direct production
workers, workers operating construction machinery, management team staff then send the
payroll to the accounting department.
- Accounts 6272 - Cost of instrument and tools : Reflecting material cost for the
production, as the materials and tools for the reparation and maintenance of fixed assets,
temporary costs ,. . .
- Accounts 6273 - The cost of production tools: Reflects costs of tools, instruments and
consumables for the management of the factory, parts and units produced. . .
- Accounts 6274 - Depreciation of fixed assets: Depreciation expenses of fixed assets are
transferred to account 6274, it reflects depreciation of fixed assets used directly for the
production of products, implementation services and shared activities amortization of
workshops, departments and organizations , production team . Currently fixed assets used
in production units are include computers, and so on. Fixed assets are amortized based on
straight line
- Accounts 6277 - Cost of services purchased from outside: To reflect the cost of services
purchased from outside service for the operation , such as repair costs, outsourcing costs,
electricity costs, water, telephone, rent and amortization.

- Accounts 6278 - Other expenses: Other expenses are collected in Ac 6278. At the end of
the month accountant collects documents for the invoices along with VAT invoices to the
accounting department of the corporation.

TK 334,338

TK 627
(1)

TK111.112.152...
(5).

TK152,153
(2)
TK 214
(3)
TK 111,112,331

TK154
(6)

(4)

(1) Costs of the management team staff

(2) Costs of instrument and tools
(3)

Depreciation of fixed asset

(4)

Outside purchasing services

(5)

Deducted cost

(6)

Closing entry

2.3.2 Accounting procedure for cash transaction:

Cash transactions are ones that are settled immediately in cash. Cash transactions also
include transactions made through cheques. Cash transactions may be classified into cash
receipts and cash payments. Because of the business characteristic, Language Link Viet
Nam accounting department have to receipt lot of cash every day from four public
schools in Ha Noi. Every day, chief accountant and director check the receipt voucher
from public school to know the amount of money inflow as well as check request for
payment in advance from each department and approve it. Then, cash accountant prepare

payment vouchers for disbursement transactions or receipt vouchers for receipt

transactions. Base on these documents, accountants post the transactions to General
Journal and ledger of relevant accounts. Simultaneously, accountants will record to
detailed books.
At the end of the month, the accountants sum up the amount of each account to prepare
trial balance, calculate the amount of detailed books to prepare summary tables,
implement comparison and finally, prepare financial statements.

Receipt voucher
Payment voucher
Request paper for advance
Payment document for advance
Detailed book
Account 111,112

General Journal

Ledger account
111, 112

Trial Balance

Financial Statements

Account used:
-

Account 111: Cash on hand

Account 1111: Cash on hangd VND

Summary
table

Account 1112:Cash on hand- USD

-

Account 112: Cash in bank

Account 1121: Cash in bank- VND
Account 1122: Cash in bank- USD
Account 1123: Cash in bank- Gold, Silver and precious stones

However, the company usually uses only account 1121 and 1122 and rarely uses account
1123 because of the high risk of the code of payment.
Besides two these accounts, some other accounts relating specific transactions would be
used.

2.3.3 Accounting procedure for sales:

Sales revenue is the gross inflow of economic benefit during the period arising in the
course of ordinary activities of an enterprise when those inflows result in increases in
equity. This is the most important inflow of the company to cover the expenditures as
well as facilitate the company to do obligations
with
Government. In addition, revenue
Delivery
note

Receipt
voucher/Credit note
reflexes scope and efficiency of the
company.
Payment voucher

Every day, base on Sales, accountants record all the transactions not only into General
Journal and then to subsidiary and general ledgers but also to detailed books of relating
accounts based
on documents
General
Journal such as Receipt voucher or credit note from banks,

Detailed book

Delivery note, payment voucher, etc. At the end of the month, accountants
calculate
account 511,
632,the
642 books to
amounts on ledgers to prepare trial balance and sum up the amounts on detailed

Ledger account
511,that, they compare between the amounts on ledgers and
prepare summary
table. After
5212, 632, 156, 642

trial balance with summary table to determine whether the figures are match to each
other. Finally, accountants prepare financial statements for management purpose or
financial statements at the end of the year.

Trial balance
Sales revenue process

Financial statements

Note:
Record daily
Record monthly
Comparison

Summary table

Accounts used:
To record sales
- Account 511: Sales revenue
+Account 5111: Revenue from sales of merchandise
+Account 5112: Revenue from sales of finished goods

- Account 5212: Sales return: This account expresses the value of goods returned because
of unqualified goods or violated contract, etc.
To record Cost of goods sold
- Account 632: Costs of goods sold: This account is used to reflect the cost of goods sold
in the period.

Chapter 3: ASSESSMENT OF ACCOUNTING STRUCTURE OF THE

COMPANY
3.1 Achievements:
3.2 Limitations:
3.3 Recommendations: