Question 1: What is accrual principle? For example to illustrate this principle.

(The accrual principle is an accounting concept that states that revenues and
expenses should be recognized in the financial statements when they are earned
or incurred, regardless of when the cash is received or paid. It is based on the idea
of matching revenues with expenses in the appropriate accounting period to
provide a more accurate representation of a company's financial performance.
To illustrate the accrual principle, let's consider an example:
1/ In 2021, A company sells goods to B company on credit (on account) for $ 1000;
cash will be paid in 2022. In what year is the revenue $1000 recognized?
By following the accrual principle, the company accurately reflects its financial
performance in the period in which it occurs, even if the cash flows associated
with those transactions happen at a different time. This principle helps provide a
more comprehensive view of a company's profitability and financial position by
matching revenues and expenses in the appropriate accounting periods.)
Question 2: What is historical cost principle? For example to illustrate this
principle.
The historical cost principle is an accounting principle that states that assets and
liabilities should be recorded in the financial statements based on their original
cost (purchase price or production cost), rather than their current market values.
According to this principle, accounting information reflects the value of assets and
liabilities at the time the transaction occurred.
To illustrate the historical cost principle, let's consider an example:
The New York Company purchased a tract of land for $50,000 on January 1, 2010.
Today the fair market value of the land is $65,000. Although the economic value
or market price of the land has increased, the company would continue reporting
it at its historical cost of $50,000
However, it is important to note that in certain special cases, the historical cost
principle may not accurately reflect the true value of assets or liabilities. In such
cases, other principles such as the market value principle may be applied to adjust
the value of the corresponding assets and liabilities.)
Question 3: What is matching principle? For example to illustrate this principle.
The matching principle requires that income earned is matched with the expenses
incurred in earning it.
The matching principle requires that income earned is matched with the expenses
incurred in earning it
• Revenues are recognized when they are earned, but not when cash is received
• Expenses are recognized as they are incurred, but not when cash is paid
• The net income for the period is determined by subtracting expenses incurred
from revenues earned
Question 4: Distinguish Financial Accounting and Management Accounting
Financial Accounting Management Accouting
Objectives The main objectives of The main objective of managerial
financial accounting are to accounting is to help management
disclose the end results of by providing information that is
the business, and the used to plan, set goals and
financial condition of the evaluate these goals.
business on a particular date.
Audience Financial accounting Managerial accounting produces
produces information that is information that is used within an
used by external parties, organization, by managers and
such as shareholders and employees.
lenders.
Optional It is legally required to Managerial accounting reports are
prepare financial accounting not legally required.
reports and share them with
investors.
Segment Pertains to the entire Pertains to individual departments
reporting organization. Certain figures in addition to the entire
may be broken out for organization.
materially significant
business units.
Focus Financial accounting focuses Managerial accounting focuses on
on history; reports on the the present and forecasts for the
 prior quarter or year. future.
Format Financial accounts are Format is informal and is on a per
reported in a specific format, department/company basis as
so that different needed.
organizations can be easily
compared.
Rules Rules in financial accounting Managerial accounting reports are
are prescribed by standards only used internally within the
such as GAAP or IFRS. There organization; so they are not
are legal requirements for subject to the legal requirements
companies to follow financial that financial accounts are.
accounting standards.
Informatio Monetary, verifiable Monetary and company goal
n information. driven information.

(Financial Accounting and Management Accounting are two distinct branches of

accounting that serve different purposes within an organization. Here's a
comparison to distinguish between the two:

Financial Accounting:
1. Purpose: Financial accounting focuses on providing financial information to
external stakeholders, such as investors, creditors, regulators, and the general
public.
2. Audience: The primary users of financial accounting information are external
parties who are interested in evaluating the financial performance and position of
the company.
3. Reporting: Financial accounting follows specific accounting standards (such as
Generally Accepted Accounting Principles - GAAP) and produces external financial
statements, including the balance sheet, income statement, statement of cash
flows, and statement of changes in equity.
4. Time Frame: Financial accounting reports are prepared at regular intervals,
usually annually, quarterly, and/or monthly, to present a summary of the
company's financial results over a specific period.
5. Focus: Financial accounting emphasizes objectivity, reliability, and adherence to
accounting principles to provide a true and fair view of the company's financial
affairs.

Management Accounting:
1. Purpose: Management accounting focuses on providing financial and non-
financial information to internal stakeholders, primarily managers and decision-
makers within the organization, to support planning, control, and decision-making
processes.
2. Audience: The primary users of management accounting information are
internal management teams, such as executives, department heads, and
operational managers who require detailed insights for strategic and operational
decision-making.
3. Reporting: Management accounting uses various tools and techniques,
including budgets, cost analysis, variance analysis, performance reports, and
forecasts, to provide tailored information for internal use.
4. Time Frame: Management accounting reports are often prepared on-demand
or periodically to address specific managerial needs and facilitate timely decision-
making.
5. Focus: Management accounting emphasizes relevance, timeliness, and
flexibility to provide detailed insights into costs, profitability, performance, and
operational efficiency. It involves analyzing and interpreting financial data to
support internal planning, control, and performance evaluation.

In summary, financial accounting is primarily concerned with external reporting

and compliance with accounting standards, while management accounting
focuses on providing internal information and analysis to support managerial
decision-making and operational control.)
Question 5: Which accounting principle are applied to Inventory accounting?
Give an example to illustrate one principle listed above
(One of the accounting principles applied to inventory accounting is the Cost
Principle, also known as the Historical Cost Principle. According to this principle,
inventory is recorded at its historical cost, which is the original cost incurred to
acquire or produce the inventory items. This principle ensures that inventory is
initially measured at a reliable and objective value.
Here's an example to illustrate the Cost Principle in inventory accounting:
Suppose a company purchases 100 units of a product at a cost of $10 per unit.
According to the Cost Principle, the inventory would be recorded at its historical
cost, which is $10 per unit.
The journal entry to record the purchase of inventory would be:
Debit: Inventory (Asset account)
Credit: Accounts Payable or Cash (Liability or Asset account)
By applying the Cost Principle, the company values its inventory at the original
cost it incurred to acquire the goods. This principle ensures that the financial
statements reflect the company's investment in inventory and helps maintain
consistency in valuing inventory over time.
It is important to note that the Cost Principle is usually used as the initial
measurement of inventory. However, in certain situations, such as when the net
realizable value (selling price minus selling costs) of inventory is lower than its
historical cost, the principle of Lower of Cost or Market (LCM) may be applied to
adjust the inventory value to its lower market value.)
Question 6: Describe accounting entries for several transactions related to
accounting for Tools and supplies if the company applies perpetual inventory
system.
Under the perpetual inventory system, companies maintain a continuous record
of their inventory balances. When it comes to accounting for tools and supplies,
several transactions may occur. Here are the accounting entries for some
common scenarios:
1. Purchase of Tools and Supplies on Credit:
When tools and supplies are purchased on credit, the following entry is
recorded:
Debit: Tools and Supplies Inventory (Asset account)
Credit: Accounts Payable (Liability account)
This entry increases the inventory asset account and creates a liability for the
amount owed to the supplier.
2. Purchase of Tools and Supplies for Cash:
If tools and supplies are purchased with cash, the entry would be as follows:
Debit: Tools and Supplies Inventory (Asset account)
Credit: Cash (Asset account)
This entry increases the inventory asset account while decreasing the cash asset
account.
3. Sale of Tools and Supplies for Cash:
When tools and supplies are sold for cash, the entry would be:
Debit: Cash (Asset account)
Credit: Tools and Supplies Inventory (Asset account)
Debit/Credit: Sales (Revenue account)
This entry records the increase in cash from the sale, reduces the inventory
account, and recognizes revenue from the sale.
4. Sale of Tools and Supplies on Credit:
If the tools and supplies are sold on credit, the following entry is made:
Debit: Accounts Receivable (Asset account)
Credit: Tools and Supplies Inventory (Asset account)
 Debit/Credit: Sales (Revenue account)
This entry recognizes the accounts receivable from the sale, reduces the
inventory account, and records revenue from the sale.
5. Return of Tools and Supplies to the Supplier:
In case tools and supplies are returned to the supplier, the following entry is
recorded:
Debit: Accounts Payable (Liability account)
Credit: Tools and Supplies Inventory (Asset account)
This entry reduces the liability owed to the supplier and increases the inventory
account.
6. Adjustment for Tools and Supplies Used:
Periodically, adjustments are made to account for tools and supplies used in the
business. The entry would be:
Debit: Cost of Goods Sold (Expense account)
Credit: Tools and Supplies Inventory (Asset account)
This entry recognizes the expense of using the tools and supplies and reduces
the inventory account accordingly.

Question 7: Describe how cost of received raw materials is measured if the

company purchases these materials. Give an example to illustrate this
measurement
The cost of raw materials purchased can therefore be calculated as follows:
Raw Materials Purchased = (Ending Inventory – Beginning Inventory) + Cost of
Goods Sold
For example, if Company A is a toy manufacturer, an example of a direct material
cost would be the plastic used to make the toys.
(When a company purchases raw materials, the cost of the received raw materials
is typically measured based on the actual cost incurred to acquire them. This cost
includes not only the purchase price of the raw materials but also any additional
costs directly attributable to bringing the materials to their usable or production-
ready condition. Here's an example to illustrate how the cost of received raw
materials is measured:
Let's say a manufacturing company purchases 1,000 kilograms of steel at a price
of $5 per kilogram. Additionally, the company incurs transportation costs of $500
to deliver the steel to its production facility.
To measure the cost of the received raw materials, the company would consider
the following:
1. Purchase Price: The purchase price of the raw materials is $5 per kilogram.
Therefore, the cost of the purchased steel would be calculated as follows:
Cost of Steel = Purchase Price per Kilogram * Quantity Purchased
= $5/kg * 1,000 kg
= $5,000
2. Additional Costs: The transportation costs directly attributable to bringing the
steel to the production facility amount to $500. This cost is directly related to
acquiring the raw materials and making them usable.Therefore, the total cost of
the received raw materials would be the sum of the purchase price and the
additional transportation costs:
Total Cost of Received Raw Materials = Cost of Steel + Additional Costs
= $5,000 + $500
= $5,500
In this example, the cost of the received raw materials would be measured at
$5,500. This cost forms the basis for valuing and accounting for the raw materials
in the company's inventory.
It is important to note that this example simplifies the measurement of raw
material costs. In practice, companies may encounter various complexities, such
as discounts, trade allowances, or other applicable costs, which may need to be
considered to accurately determine the cost of received raw materials.)
Question 8: According to Circular 200/2014/TT_BTC, which costing methods are
used to measure cost of issued inventories? Give an example to illustrate one
method
Currently, according to Circular 200 (Circular No. 200/2014/TT-BTC), there are 3
common methods of calculating the value of inventories, which are: The nominal
price method; Weighted average method after each entry or at the end of the
period; First-in, first-out method (FIFO).
For example, The raw material situation of Viet Hung Trading Company in April
2021 is as follows:
Question 9: Distinguish Perpetual inventory system and Periodic inventory
system.
(Perpetual Inventory System:
1. Continuous Tracking: The perpetual inventory system involves continuously
updating the inventory records for each transaction, whether it is a sale, purchase,
or return. It provides real-time information on the quantity and value of inventory
items.
2. Automation: Perpetual inventory systems are often computerized, utilizing
barcode scanners, point-of-sale systems, or other automated technologies to
track inventory movements and maintain accurate records.
3. Cost of Goods Sold (COGS): Under the perpetual system, the cost of goods sold
is calculated and recorded for each sale transaction. It allows for immediate and
ongoing monitoring of COGS and provides up-to-date information for financial
statements.
4. Inventory Valuation: The perpetual system typically uses the weighted average
cost method or specific identification method to value the inventory.
5. Inventory Count: Regular physical inventory counts are still required to reconcile
the recorded inventory levels with the actual physical inventory.

Periodic Inventory System:

1. Intermittent Tracking: The periodic inventory system involves periodic, usually
at the end of an accounting period, updates and adjustments to the inventory
records. It does not track each individual transaction.
2. Manual Record-Keeping: The periodic system often relies on manual record-
keeping and inventory counts. Transactions are recorded in separate accounts,
and the inventory balance is adjusted periodically based on physical inventory
counts.
3. Cost of Goods Sold (COGS): Under the periodic system, the cost of goods sold is
calculated only at the end of the accounting period, based on the physical
inventory count and the change in inventory balance during that period.
4. Inventory Valuation: The periodic system typically uses cost flow assumptions
such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out) to determine the value
of inventory.
5. Inventory Count: Physical inventory counts are crucial in the periodic system to
determine the ending inventory and calculate the cost of goods sold. These counts
are usually performed periodically, such as monthly or annually.

In summary, the key distinction between the perpetual inventory system and the
periodic inventory system lies in the frequency of updating inventory records. The
perpetual system maintains a continuous and real-time record of inventory, while
the periodic system updates inventory records periodically, often based on
physical inventory counts.)
Question 10: Describe accounting entries for dispatching tools in case that the
cost of tools is allocated in more than one period. Give an example related to
this event and this tool is broken during its allocation time.
(When the cost of tools is allocated over multiple periods, it typically indicates
that the tool is being depreciated or amortized over its useful life. In such cases,
the accounting entries for dispatching or disposing of the tool will involve
adjusting the accumulated depreciation or amortization account and recognizing
any gain or loss on the disposal. If the tool is broken during its allocation time, it
would be considered a loss on disposal. Here's an example to illustrate the
accounting entries in this scenario:
Let's say a company purchased a machine tool for $10,000 with an estimated
useful life of 5 years. The company decides to depreciate the tool using the
straight-line method, allocating the cost evenly over the 5-year period. After 3
years of use, the tool breaks and is disposed of.
1. Initially, when the tool was purchased, the following journal entry would be
recorded:
Debit: Machine Tool (Asset account) - $10,000
Credit: Cash or Accounts Payable (Asset or Liability account) - $10,000
2. At the end of each year, the following adjusting entry would be made to record
the depreciation expense:
Debit: Depreciation Expense (Expense account) - $2,000 ($10,000/5 years)
Credit: Accumulated Depreciation (Contra-asset account) - $2,000
3. After 3 years, the accumulated depreciation on the machine tool would be
$6,000 ($2,000/year * 3 years).
4. When the tool breaks and is disposed of, the following journal entry would be
recorded to account for the loss on disposal:
Debit: Accumulated Depreciation - Machine Tool (Contra-asset account) - $6,000
Debit: Loss on Disposal of Machine Tool (Expense account) - Remaining Book
Value (e.g., $4,000)
Credit: Machine Tool (Asset account) - $10,000
The loss on disposal is calculated as the remaining book value of the machine tool,
which is the original cost ($10,000) minus the accumulated depreciation ($6,000).
By making these entries, the company adjusts the accumulated depreciation
account to reflect the depreciation expense recorded over the years and
recognizes the loss on disposal due to the tool being broken. The net effect is a
reduction in the value of the machine tool on the balance sheet, reflecting its
disposal.)

Question 11: What is fixed asset? Present recognition criteria of fixed assets.
(A fixed asset, also known as a non-current asset or a tangible asset, is a long-
term asset held by a company for its continued use in operations to generate
revenue. Fixed assets are tangible items that have a useful life beyond one
accounting period and are not intended for resale.
The recognition criteria for fixed assets can vary slightly depending on the
accounting framework being followed (such as Generally Accepted Accounting
Principles - GAAP or International Financial Reporting Standards - IFRS). However,
the general recognition criteria for fixed assets are as follows:
1. Control: The company must have control over the asset, which means it has the
ability to obtain future economic benefits from the asset and can dictate how and
when the asset is used.
2. Probable Future Economic Benefits: It is expected that the fixed asset will
generate future economic benefits, such as generating revenue, reducing costs, or
supporting the company's operations.
3. Cost Measurability: The cost of the fixed asset can be reliably measured. This
includes the initial purchase price or the production cost, as well as any additional
costs directly attributable to bringing the asset to its intended use (such as
transportation and installation costs).
4. Reliability: The information used to recognize the fixed asset must be reliable
and verifiable, ensuring that the financial statements accurately represent the
asset's value and the company's financial position.
Once these recognition criteria are met, the fixed asset is initially recognized in the
financial statements. The following journal entry is typically recorded:
Debit: Fixed Asset (Asset account)
Credit: Cash or Accounts Payable (Asset or Liability account)
This entry increases the fixed asset account and either decreases the cash asset (if
purchased with cash) or increases the accounts payable liability (if purchased on
credit).
It's important to note that subsequent to initial recognition, fixed assets are
subject to depreciation or amortization to allocate their cost over their useful lives
and reflect their consumption or loss of value over time.)
Question 12: How to measure cost of a FA that us acquired in exchange for
another FA and the transaction has commercial substance? Give an example to
illustrate this case
Measure: When a fixed asset is acquired in exchange for another asset, its cost is
usually determined by reference to the net book value. Net book value of the
asset given up is the cost less depreciation.
Example: On 1st Feb, 2020: Exchange an equipment A for an similar FA of company
B (this transaction had commercial substance). Cost of the equipment:
120.000.000, accummulated depreciation charge: 60.000.000, fair value of FA
(exclude 10% VAT): 50.000.000
Both company A and B entries:
Dr acc 811: 60.000.000
Dr acc 214: 60.000.000
Cr acc 211: 120.000.000

Dr acc 131: 55.000.000

Cr acc 711: 50.000.000
Cr acc 333: 5.000.000

Dr acc 211: 50.000.000

Dr acc 133(2): 5.000.000
Cr acc 131: 55.000.000
(When a fixed asset (FA) is acquired in exchange for another FA, and the
transaction has commercial substance, the cost of the acquired FA is generally
measured at its fair value. Fair value represents the price at which the asset could
be exchanged between knowledgeable and willing parties in an arm's length
transaction.

Here's an example to illustrate the measurement of cost in a fixed asset exchange

with commercial substance:

Assume Company A owns a machine with a carrying value (book value) of $50,000
and a fair value of $60,000. Company B owns a different machine with a fair value
of $55,000. Both companies agree to exchange their machines.

1. Determine the fair value of the acquired fixed asset: The fair value of the
acquired machine is $55,000, which is the fair value of the machine owned by
Company B.

2. Calculate the gain or loss on the exchange: The gain or loss on the exchange is
the difference between the fair value of the acquired machine and the carrying
value of the machine given up. In this case:
Gain or Loss on Exchange = Fair Value of Acquired Machine - Carrying Value of
Machine Given Up

Carrying Value of Machine Given Up (Company A's machine) = $50,000

Fair Value of Acquired Machine (Machine owned by Company B) = $55,000

Gain or Loss on Exchange = $55,000 - $50,000 = $5,000 (gain)

3. Record the journal entries for the exchange:

For Company A (Machine Given Up):

Debit: Accumulated Depreciation (Contra-asset account) - $XX
Debit: Loss on Exchange of Machine (Expense account) - $XX
Credit: Machine (Asset account) - $50,000

For Company B (Acquired Machine):

Debit: Machine (Asset account) - $55,000
 Credit: Cash (Asset account) - $XX

In the journal entries, the Accumulated Depreciation account is debited to remove

the accumulated depreciation on the machine given up. The Loss on Exchange of
Machine account is debited to record the loss of $5,000. The Machine account is
credited to remove the machine given up from the books of Company A. For
Company B, the Machine account is debited to record the acquired machine at its
fair value, and the Cash account is credited for the equivalent value.

By measuring the cost of the acquired fixed asset at its fair value and accounting
for any gain or loss on the exchange, the financial statements reflect the economic
substance of the transaction and provide accurate information about the
company's assets and any changes in value.)

Question 13: Describe accounting entries for acquiring a FA in form of exchange

for a dissimilar asset. Give an example to illustrate this case.
Describe:
Buying fixed assets in the form of exchange is not the same as buying fixed assets
at a price higher or lower than the price of the fixed asset to be exchanged.
When performing this operation, accountants must make the following entries:
When handing tangible fixed assets to the exchange party. The account is as
follows:
Dr 811- Other expenses (Residual value of fixed assets exchanged)
Dr 214- Depreciation of fixed assets (Depreciated value)
Cr 211- Tangible fixed assets (historical cost).
At the same time, record an increase in income due to exchange of fixed assets.
Dr 131-Receivables from customers (this is the total payment price)
Cr 711-Other income (which is the fair value of fixed assets given for exchange)
Account 3331-VAT payable (if any)
When receiving tangible fixed assets due to exchange, the following accounts
shall be recorded:
Dr 211- Tangible fixed assets (this is the fair value of fixed assets received)
Dr 133- Deductible VAT (if any)
Account 131-Receivables from customers (which is the total payment price)
In case additional money is collected because the value of the fixed asset given
for exchange is greater than the value of the fixed asset received during the
exchange, when receiving money from the party having the exchanged fixed
asset, we record
Dr. 111, 112 (additional amount collected)
Account 131-Receivables from customers.
In case an additional payment is required because the fair value of the fixed asset
given for exchange is smaller than the fair value of the fixed asset received from
the exchange, when paying to the party having the exchanged fixed asset, we
record:
Dr 131- Receivables from customers,
There are accounts 111, 112.
Example: On 1st Feb, 2020: Exchange an equipment A for an equipment B of
company B (this transaction had commercial substance).
Cost of the equipment A: 90.000.000, accumulated deppreciaton charge:
30.000.000, fair value of equipment A (exclude 10% VAT): 50.000.000
Cost of the equipment B: 180.000.000, accumulated deprciation charge:
60.000.000, fair value of equipment B (exclude 10% VAT): 100.000.000
Company A paid cash at bank for the difference.
Company A entries:
Dr acc 811: (equipment A) 60.000.000
Dr acc 214: (equipment A) 30.000.000
Cr acc 211: (equipment A) 90.000.000
Dr acc 131: 55.000.000
Cr acc 711: 50.000.000
Cr acc 333: 5.000.000

Dr acc 211: (equipment B): 100.000.000

Dr acc 133(2): 10.000.000
Cr acc 131: 110.000.000

Dr acc 131: 55.000.000

Cr acc 112: 55.000.000

Company B entries:

Dr acc 811: (equipment B) 120.000.000

Dr acc 214: (equipment B) 60.000.000
Cr acc 211: (equipment B) 180.000.000

Dr acc 131: 110.000.000

Cr acc 711: 100.000.000
Cr acc 333: 10.000.000

Dr acc 211: (equipment A): 50.000.000

Dr acc 133(2): 5.000.000
Cr acc 131: 55.000.000

Dr acc 112: 55.000.000

Cr acc 131: 55.000.000
(When a fixed asset (FA) is acquired in exchange for a dissimilar asset, meaning
the assets exchanged have different natures or characteristics, the accounting
entries for the acquisition are typically recorded at the fair value of the acquired
asset. Here's an example to illustrate the accounting entries for acquiring a FA in
exchange for a dissimilar asset:
Assume Company A owns a delivery van with a carrying value (book value) of
$30,000. Company B owns a computer system with a fair value of $35,000. Both
companies agree to exchange their assets.

1. Determine the fair value of the acquired fixed asset: The fair value of the
acquired FA is $35,000, which is the fair value of the computer system owned by
Company B.

2. Calculate the gain or loss on the exchange: The gain or loss on the exchange is
the difference between the fair value of the acquired asset and the carrying value
of the asset given up. In this case:
Gain or Loss on Exchange = Fair Value of Acquired Asset - Carrying Value of
Asset Given Up

Carrying Value of Asset Given Up (Company A's delivery van) = $30,000

Fair Value of Acquired Asset (Computer system owned by Company B) = $35,000

Gain or Loss on Exchange = $35,000 - $30,000 = $5,000 (gain)

3. Record the journal entries for the exchange:

For Company A (Asset Given Up - Delivery Van):

Debit: Accumulated Depreciation (Contra-asset account) - $XX
Debit: Loss on Exchange of Asset (Expense account) - $XX
Credit: Delivery Van (Asset account) - $30,000

For Company B (Acquired Asset - Computer System):

Debit: Computer System (Asset account) - $35,000
Credit: Asset Given Up (Liability or Asset account) - $XX

In the journal entries, the Accumulated Depreciation account is debited to remove

the accumulated depreciation on the delivery van given up. The Loss on Exchange
of Asset account is debited to record the gain of $5,000. The Delivery Van account
is credited to remove the asset given up from the books of Company A. For
Company B, the Computer System account is debited to record the acquired asset
at its fair value, and the Asset Given Up account is credited for the equivalent
value.
By recording the acquisition at the fair value of the acquired asset and accounting
for any gain or loss on the exchange, the financial statements accurately reflect
the value of the assets exchanged and any changes in value resulting from the
transaction.)

 Revenue recognition
- Revenue from selling goods (5 criterias)
(a) The seller has transferred the significant risks and rewards of ownership
of the goods to the buyer.
(b) The seller does not retain control over the goods or managerial
involvement with them to the degree usually associated with ownership.
(c) The amount of revenue can be measured reliably.
(d) It is probable that the economic benefits associated with the transaction
will flow to the seller
(e) The costs incurred or to be incurred by the seller in respect of the
transaction can be measured reliably.

- Revenue from providing services (4 criterias)

(a) The amount of revenue can be measured reliably.
(b) It is probable that the economic benefits associated with the transaction
will flow to the seller.
(c) The stage of completion of the transaction at the end of the reporting
period can be measured reliably.
(d) The costs incurred to date for the transaction and the costs to complete
the transaction can be measured reliably.
- Royalty, interest income… (2 criterias)
IAS 18 states that entities should recognise revenue from the use of their
assets yielding interest, royalties and dividends when:
 (a) It is probable that the economic benefits associated with the transaction
will flow to the entity.
(b) The amount of the revenue can be measured reliably.

 If the company applies Perpetual method

COGS calculation is based on Good issuing Notes:
COGS = Beginning inventory + purchases for the period – Ending inventory
 If the company applies periodic method
COGS calculation is based on the following equation
Cost of Goods Sold (COGS) = (Beginning Inventory + Cost of Inventory
Purchases) – Closing Inventory

BÁO CÁO TÀI CHÍNH

Going concern: In preparing and presenting the financial statements, The head of
the business must evaluate the ability to operate business continuity. Financial
statements must be prepared based on
The assumption is that the enterprise is in business and will continue normal
business operations for the foreseeable future, unless The enterprise has the
intention or is forced to stop operating or must significantly downsize its
operations
When assessing if the business has uncertainties doubt or doubt about the going
concern of the enterprise should be specified. If the financial statements are not
prepared on the basis of going on business, these events must be clearly stated
together with the basis for preparing financial statements.
To assess the ability to operate continuously, the head Businesses must consider
all predictable information at least within the next 12 months from the balance
sheet date accountant
Accrual basis: Enterprises must prepare financial statements on the basis of
accrual accounting except for flow-related information money.
On the accrual basis, enterprises recognize assets and liabilities payables, equity,
income and expenses (the elements of financial statements) when they meet the
definition and recognition criteria specified in the template

Materiality and Aggregation: The enterprise must present it separately each

group of similar items of a character important. Enterprises must present
separate accounts items are not similar in nature and function, except when
these items are not material
If an item is not material, it is included in other items of the same nature or
function in Financial statements or explanations. Are there items considered
material for a separate presentation in the financial statements but are
considered material to be presented separately in present.
Offsetting: Enterprises are not allowed to offset assets and liabilities income and
expenses, unless this offset is authorized as directed by an accounting standard
Comparable information: When changing presentation or to classify items in the
financial statements, reclassify comparisons (unless this is not possible
be) to ensure comparability with the current period and must describe the
nature, data and reasons for the reclassification. If this is not possible, the
enterprise must clearly state the reasons and nature of changes if classification is
performed. Enterprises must disclose information about comparable to the
previous accounting period for all accounts items presented in the financial
statements for the current period.
TheComparative information should include information that is verbal
explanations if the information is appropriate for understanding the financial
statements of the current period.
Consistent presentation: The presentation and classification of The items in the
financial statements must be consistent from this period next period unless:
a) There is a change in the nature of the enterprise's operations or when a review
of the presentation of the FS indicates a need for a change to give a more fair
presentation of the transactions.
b) another standard that requires a change in presentation