Financing: gọi vốn

Obsolete: out of date

- In the UK, FS prepared in accordance with either UK GAAP or IFRS Standards
- GAAP: generally accepted accounting pratice (UK)/ generally accepted accounting principles
(international): cover all the rules which govern accounting in various jurisdictions
 Companies Act 2006
 UK accounting standards (derived from IFRS Standards with limited exceptions)/FRS
102
- IFRS: international financial reporting standards
 IASB responsible for setting IFRS + IAS
Ownership: + Public company => plc => issue share in public large => Listed company: công ty
được niêm yết trên sàn chứng khoán or Unlisted (listed if meet requirements)
+ Private company => ltd => issue cho chỉ 1 số người (gia đình, …) => Unlisted
company: công ty không được niêm yết trên sàn chứng khoán

CHAPTER 1:
1. Accounting:
- A way of recording, analysing and summarising the transaction of an entity

2. Business entity:
- Capital:
 Sole trader: Closing cap = Open + Addition + net profit - drawing
 Partnership: Closing cap = Close capital account + close current account
- Equity: Limited Liability Company = Share cap + Share pre + RE + Other reserves
- Tax expense:
 Sole trader/ Partnership: not appear in SOFP (account as income tax)
 Company: appear in SOFP
- Loan (By law):
 Sole trader/Partnership: unlimited liability (owner)
 Company: limited liability (owner) but if company unlimited liability
- Loan (By accounting): separate when record
3.
Capital expenditure Rev expenditure
- Upgrade - Maitain
 - Repair

Capital income Rev income

- Sell long term asset
4. Users of accounting information: (1.4)
- Who?
- Expect in?
- Expect from company?

5. Financial statements: SOFP, SOPL, SOCF, SOCIE, summary of accounting

policies note
5.1 Objective: provide in4 about the reporting entity that is useful to existing and potential
investors, lenders and other creditors in making decision relating to providing resources to entity
5.2 Main financial statements:
SOFP SOPL SOCF
At the end of the reporting For the reporting period For the reporting period
period
- List of assets controlled and - Show whether the bus has - Actual cash flow into and
liabilities owed by company had income > ex (profit) or paid out of the bus
at particular date: a snapshot vice versa (loss)
of FP of bus at a particular - Published annual FS of LLC
moment a year, management
- Factors affect FP: quarterly, monthy, weekly or
 Economic resources even daily.
 Financial structure - Helps users to understand:
(debt + capital financing)  Return
 Liquidity (short-term  Future return
cash) + solvency
(long-term)
 Adaptability
Summaries of accumulated in4 (SOPL: show total rev earned
from all sales during the period)
* Note: The link between SOPL and SOFP is provided by SOCF and SOCIE (the opening and
closing equity of company)
5.3 True and fair view:
 Conceptual Framework: if financial in4 is to be useful, it must be relevant and faithfully
represent what it purports to present
 Companies Act: FS should give a true and fair view of the FP at a particular point in time
 IAS1: FS should present fairly the financial position and performance and the cash flow
of the entity. This requires faithful representation of the effects of transactions.
 6. Qualitative of useful information:
Fundamental Enhancing
Relevance Faithful - Comparability (open + close balance),
- Predictive - Complete cùng 1 bộ dữ liệu, cùng 1 year
- Confirmatory - Neutral: support by - Verifiability: có thể xác nhận, kiểm chứng
- Maturiality prudence (assets not over and được
liability not under) => Support faithful
- Free from error (5 errors, not - Timeliness: tính kịp thời available for
mean accurate) decisions making
- Understandability: classified, characterised
and presented clearly and concisely
7. Accounting concepts:
 Fair presentation:
 Going concern: When break-up
o Long term => Short term
o Sell asset with net realisable value (break up value)
o Pay for Creditor > Preference shareholder > Odinary shareholder
 2 ways to record rev:
Accrual basis Cash basis
- Revenue earned - Revenue received
- Expense incurred - Expense paid
 Consistency: stay the same from 1 period to the next
=> Support comparability
 Maturial:
o Aggregation (total TR)
o Present similar items seperatedly (TR, cash separate in Asset)
 Offseting: (bu tru)
o A, L, R, E separate
o Income and expense can be offset only when IFRS permit/ gain or loss (G/L on
dispisal)
 Historical cost invention:
8. Ethical considerations:
 Integrity
 Objectivity: (drink wine and ghi wrong – influence by others)
 Professional and due care: (not update in4 about knowledge)
 Confidentiality
 Professional behavior: not comply with law => affect reputation
- Principle based(code of ethics)/Rule based system (company act)
 CHAPTER 2, 3, 4
ASSET: is a present economic resource controlled by the entity as a result of past events. An
economic resource is a right that has the potential to produce economic benefits.
Non-current assets: generate economics benefits over a number of years
Current assets: generate economics benefits in the short term
LIABILITY: is a present obligation of the entity arising to transfer an economic resource as a
result of past events/outflow of economics benefits (trả nợ)
Non-current liability: economics resources – transferred more than 12 years
Current liability: economics resources – transferred in the next 12 years/
CAPITAL/EQUITY: is the residual interest in the assets of the entity after deducting all its
liability. Capital can be viewed as a measure of the owner’s investment in the business
Distribution costs: expenses – Administrative costs: expenses Finance costs: expenses –
selling and delivering goods providing management and funding like bank
to customers administration for the business
- Salaries, wages and sales - Management and office staff - interest on loan
commission of marketing and - Insurance - bank overdraft interest
distribution staff - Rent
- Marketing costs - Telephone + Postage
(adverstising expense ...)

Statement of P&L 1. Rev/Sale

2. COGS (giá vốn)
3. Gross profit
4. Other expense (C2/80)
 Distribution cost
 Administrative cost
 Finance cost
5. Other income:
 Profit on disposal/sell of NCA
 Dividens/Interest received from
investment
 Owner (buy stock) =>
Dividens
 Lender (loan to sb) => Interest
 Rental income
 Insurance claim
6. Tax expense
7. Net profit
Statement of change in equity
 SOFP: summarising what business has done 1. Asset:
in a period - NCA:
 PPE (property, plant, equipment)
 Intangible NCA (without physical
form)
 Long-term investment
- CA: turn into cash in a short time
 Cash & Cash equivalent
 Inventory
 TR = Total TR - Allowance
 Prepayment
 Short-term investment
 Accrued income
2. Liability:
- NCL:
 Long-term loan/borrowing
 Loan stock/debentures
- CL:
 Short-term loan/ borrowing
 TP
 Bank overdraft: pay on demand
 Accrual
 Tax payable
 Deffered income
- Capital: Opening capital + addition + net
profit (loss) - drawings
Statement of cash flow
The note (thuyết minh báo cáo tài chính)

ACCOUNTING CYCLE:
Transactions => collect documents (source documents) (Chapter 3) => recording (Chapter 4)
journal entry < T account => (Chapter 5) Trial balance => Adjustment => Financial position
TRANSACTIONS:
 Credit transaction
 Credit sale
 Credit purchase
 Cash transaction (Bank)
 Petty cash transaction
 Payroll
1. Credit transactions:
- Quy trình
 Seller Buyer
2. Receiver order 1. Place an order
3. Deliver goods (issue delivery note) 4. Receive goods + Delivery note
=> Issue Goods received note
5. Issue invoice 6. Reveice invoice
If invoice overcharge/ goods returned
=> issue debit note (inform the seller +
7. Credit note (negative invoice) – sửa invoice require credit note)

* Source documents: invoice, credit note, remittance advice (tear off)

2. Cash transactions: (KO BAO H CÓ INVOICE)
 Cash sale
 Cash purchase
* Source documents: transaction reports, cheque, debit card, …
3. Petty cash transactions => for incidental expenditure
- fix “float” amount by imprest system
- Quy trình:
Transactions => manually write in petty cash book => issue voucher (biên lai) (double check)
=>pay/receive petty cash => recording total expense => top-up
Cash held in petty cash + voucher for payments = imprest amount

Example: Total < Imprest => voucher missing or an extra cash taken from petty cash box
* Source document: petty cash book
4. Pay roll transactions:
- The payroll (bảng lương):
Net pay Deduction
Employee Employee PAYE Employer Employer pension
NI pension NI
Gross pay Additional cost for employers
Total payroll cost
* Soure documents: payroll
RECORDING:
1. Tools: ledger simply means “book” T-account. (record and analyse the transaction
undertake)
2. Methods: double entry bookeeping (chỉ use nominal ledgers)
LEDGERS: simply means “book” T-account.
Main ledgers used in accounting system:
 Nominal ledger: financial Receivable ledger – recorded Payable ledger –
transactions are recorded – recorded in detail recorded in detail
in total
 Total trade payables (…)
 Total trade receivables
(record the total, có nhiều
personal accounts)
 Assets, liabilities, capital,
income and expenditure
Personal ledger – là detail của total TP, TR
=> memorandum only (bản ghi nhớ)

Receivable ledger
Sales Cash received
Dishnounored cheques Discount allowed
Refunds of credit balance Irr debt expense
Interest charged on late account Contras against payables
Return inward

Payables ledger
Cash paid Purchase
Contra with TR Interest on overdue account
Discount received
Return outward
* Note 1: Double entry bookeeping: each transaction has an equal but opposite effect (debit +
credit – dual effect). Every accounting event must be entered in ledger both as a debit and credit.
Every transaction is recorded twice in the ledger accounts. (T account) (Nguyên tắc ghi sổ kép)
* Note 2: Journal entries: a way of presenting the required double entry (debit, credit) for a
transaction
 Used to record unusual or one-off transaction (correction of an error)
 Narrative explanation accompany journal entry => audit can check (stamps, travel)
3. Apply => Recording 4 types of basic transactions
3.1 Credit transactions:
a) Credit sales:
Dr TR
Cr rev
b) Credit purchase:
Dr purchase (không ghi là inventory vì inventory ghi vào cuối kì, purchase là mua về để bán)
Cr TP
* Notes:
Discount:
 Trade discount = buck discount (giảm giá vì mua số lượng lớn): percentage discount
deducted from list price of goods owing to the nature of transaction => net-off at the
point of selling
 Early settlement discount = early payment
SALE 500, DISCOUNT 5
Expect customer to take the discount: Not expect customer to take the discount:
At the point of selling: At the point of selling:
Dr Tr 495 Dr Tr 500
Cr rev 495 Cr rev 500

Pay within the discount Pay within the discount

Dr cash 495 Dr Cash 495
Cr tr 495 Dr Rev 5
Cr Tr 500
Pay after discount Pay over deadline
Dr Cash 500 Dr cash 500
Cr tr 495 Cr tr 500
Cr Rev 5

PURCHASE PURCHASE
Expect to take the discount: Not expect to take the discount
At the point of buying At the point of buying
Dr purchase 495 Dr purchase 500
Cr TP 495 Cr TP 500
Pay within discount: Pay within the discount:
Dr Tp 495 Dr tp 500
Cr cash 495 Cr cash 495
Pay after discount Cr purchase 5
Dr TP 495 Pay after discount:
Dr Purchases 5 Dr Tp 500
Cr Cash 500 Cr cash 500

VAT: (8.3)
 Đánh trên giá trị gia tăng của sản phẩm
 Người chịu là người tiêu dùng cuối cùng
Register:
 Exempt (bank): miễn thuế
 Taxable
 20%
  Reduced rate (5%)
 Zero rate (0%)
 Non deductable (no VAT input) (phải cộng VAT)
 Cars for using
 Business entertaining
* Car thì auto cộng VAT còn truck, … thì ko. (plus là chưa cộng còn including là cộng rồi)

Example:

B C
500 A (ur company - 600
VAT 100 => VAT register) VAT 120 => VAT
input output

REGISTER NON-REGISTER: ko dc hoan thue

Dr purchase 500 Dr TR 720 Dr purchase 600 Dr TR 720
Dr VAT input 100 Cr sales 600 Cr TP 600 Cr sales 720
Cr TP 600 Cr VAT output
120

RETURN:
 Inward
 Outward
- The seller: goods return from customers:
Selling: Dr cash/ TR
Cr sales
Return inward: Dr sales
Cr cash
- The buyer: return goods to supplier:
Buying: Dr purchase
Cr cash/TP
Return outward: Dr cash/TP
Cr purchase
* Ko đc ghi inventory (cuối kì), chỉ đảo lại phép toán
3.2 Cash transaction:
  Cash sale
 Cash purchase
 Payment of credit transactions (kì trước)
a) Cash sale
Dr cash
Cr sales
b) Cash purchase
Dr purchse
Cr cash
c) Payment of credit transactions:
Sale: Dr cash
Cr Tr
Purchsae: Dr tp
Cr cash
*Note: Trade discount, VAT, Returns
3.3 Petty cash transaction:
Dr expense
Cr petty cash
=> Top up: Dr petty cash
Cr cash

CHAPTER 5: ERRORS
1. Trial balance: list of nominal ledger account balances shown in debit and credit columns
at a point of time
Errors:
 Transposition errors (lỗi lộn số Ex: 34 =>43): 2 digits are recorded wrong way
 Omission errors (lỗi bỏ quên): a transaction is omitted
 Commission errors: a debit or credit posted to the RIGHT side of Nominal ledger but
WRONG account (2 tk cùng loại expense, asset...)
Ex: telephone expense added to the electricity expense account
 Compensating errors (lỗi bù trừ): 1 error is cancelled by another error (2 sai thành 1
đúng)
  Errors of principle (lỗi sai nguyên tắc kế toán):
Ex: repairs expenditure added to the cost of non-current assets accoun
Adjustment: on adjustment journals
 Transactions happen after trial balance extracted
 Errors
 Special items (các khoản mục đặc biệt) – điều chỉnh vào cuối kì
 Inventory, COGS (Chapter 7)
 Allowance (Chapter 8)
 Accrual & Prepayments (Chapter 9)
 Depreciation (Chapter 10)
=> Adjusted trial balance:
=> Balancing off
=> FS:
 P&L account (Nominal ledger)
 Extended TB
TEMPORARY &PERMANENT ACCOUNTS:
Permanent account: tk mà luôn luôn có số dư
Ex: Assets, Liabilities, Owner’s capital
Temporary accounts: đến cuối kì thì số dư phải bằng 0 (trial balance: ko phải cuối cùng)
Ex: Rev, Expenses, Withdrawal, P&L account
RECORDING CLOSING ENTRIES
 Close Rev accounts to P&L account
 Close Ex accounts to P&L account
 Close P&L account to Owner’s Capital
 Close Withdrawals to Owner’s Capital

Chapter 6:
 Errors => Corrections
 2 tools:
 Bank reconcilization (giảm lỗi sai ở cash transaction)
 External statement reconcilization: check business’s TR and customer’s TP, check
business’s TP and supplier’s TR (giảm lỗi sai ở credit transaction)

1. RECONCILIATION: (ĐỐI CHIẾU LẠI)

Bank reconcilation: prepared periodically to explain differences between cash reported on bank
statement and cash on company’s book
Bank statement: daily/weekly/once a month, bank sends bank statement or depositor can
download bank transaction report showing activity
BANK STATEMENT BALANCE BOOK BALANCE
- Recording errors - Recording error: transposition, omission, …
- Timing differences: (ko phải là errors) - Dishonoured cheques: cheques out of date,
 Uncleared lodgements: received by cheques mình receive
business, debited in CAB, not yet - Direct debit, standing order: thanh toán tự
appear on BS động
 Unpresented cheques (outstanding: đg - Bank interest, bank charge: lợi nhuận, phí
được xử lí): paid out by business, dịch vụ ngân hàng
credited in CAB, not yet appear on BS
 Deposit credited after date

Bank statement
Dec Inc

* pay in= deposit: put money into account:

EXERCISE:
 Cho số balance sai => tìm đúng của (CA or BS)
 Cho số balance đúng => tìm sai

2. Errors => Correction (Biết book đúng + sai)

Unusual/one-off transaction => Dr Cash/Cr suspense
Correct => xóa suspense => book đúng + sai
3. Affect of errors => FS
Chú ý câu hỏi:
Errors => affect?
After correcting => affect?

CHAPTER 7: COST OF SALE & INVENTORY

1. Inventory (IAS 2) => current asset
 Retail business => good purchased => resale
 Manufacturing business => materials, finished goods, work in progress (WIP)
2. COS = Open + Purchase + Delivery inward – Close
* Delivery inward >< Delivery outward:
- Inward: supplier => me => COS inc
- Outward: me => cus => Distribution cost inc
* End of period => Review => Revolution
Compare historical cost & NRV (Choose lower)
=> Written down to NRV (NRV < Historical cost)
=> Written off (NRV =0)
=> Thỏa mãn nguyên tắc Prudence/Consurvation
* Inventory destroyed/stolen
+ Destroyed = 500
+ Insurance claim = 300
=> 200: Expense => Incorrect => Vi phạm nguyên tắc offestting (sự bù trừ) tức là ko đc bù trừ
mà phải trình bày hết.
- Take the cost of goods stolen or destroyed out of purchase
Dr expense (cost of goods stolen)
Cr purchases
- Insurance claim: other income (not from selling)
Dr cash/other reveivables
Cr other income
* Goods withdraw: (sole trader, partnership)
Dr drawings
Cr purchase/COS

3. Accouting for inventory: (end of period)

 Opening:
Dr COS
Cr opening
 Closing:
Dr Closing
Cr COS
 Purchase:
 Dr COS
Cr purchase
=> Dr P&L
Cr COS

4. Counting inventory => end of period”:

 Small business => Physical accounting
 Large business => Computerised accounting
=> Quantity of closing inventory

5. Valuing inventory: (in terms of money)

* Compare historical cost & NRV (Choose lower): Inventory should be valued at the lower of
cost and NRV
- Inventory cost: the cost of any asset is the sum of all the costs incurred to bring the asset to its
intended use/All expenditure incurred in bringing to its present location and condition
 Cost of purchase (purchase price, VAT – loại VAT ra, delivery inward, import tax, …)
 Cost of conversion: Costs involved in converting raw material into final final product
(labor + expense directly related to the product + production overhead)
* Finished good include: raw material, labour, production overhead.
* Production overhead/ Production fixed overhead/Production valuable overhead: chi phí
sản xuất chung gồm: depreciation, electricity, heat, light, … (not administrative overhead cost,
finished goods storage costs )

- NRV (giá trị thuần có thể thực hiện được) = Expected selling price – cost to sell (chi phí sửa
chữa lại sau khi nó bị damaged. Ex: modify (= change to adapt), rectification, remedial work: sửa
chữa + delivery outward)
Inventory cost = Invoice cost (+import duties) – Discount and allowances + Freight storage
insurance
6. Methods to value closing inventory
 FIFO
 AVCO
7. Relationship of inventory valuation & profit:
- Different valuation methods
=> Different closing inventory
=> Different profit
CATERIA FIFO AVCO: cumulative weighted
average pricing
 Profit (rising price) More Less
- Errors in valuing inventory => affect profit (gross, net), asset
EXERCISE:
 Historical cost >< NRV => Closing inventory = X (Chú ý include or exclude)
 Method FIFO, AVCO => Closing inventory (Chú ý hỏi cost of inventory – closing
inventory hay hỏi cost of sale)
 Change method => affect
 Valuation => profit, asset, capital (current year/ next year)

CHAPTER 8: IRRECOVERABLE DEBT &

ALLOWANCE
* Method of accounting for valuing TR:
 Direct Write-off (irrecoverable debts)
 Allowance method (doubtful debts): dự phòng
1. Irrecoverable debt (expense): a debt which is not expected to be paid by debtor.
(Administrative expense: chi phí quản lí chung-lương giám đốc, điện, nước, …)
=> Writing off (xóa nợ): charging the cost of the debt against the profit for the period
 Write off irrecoverable debt:
Dr Irrecoverable debt expense (SP&L)
Cr Trade receivable (SOFP)
 Irrecoverable debt written off & subsquently paid: (Whether it is paid in the same period
or a subsequent period)
Dr Cash at bank
Cr Irrecoverable debt expense

2. ALLOWANCE: an allowance for receivables is an estimate of the percentage of debts

which are not expected to be paid => end of period => Adjustment
Allowance for receivables: khoản dự phòng nợ phải thu
Allowance => Current asset => Contra-receivable: tăng credit, giảm debit (điều chỉnh giảm cho
TR) => net of TR
Less certain than an irrecoverable debt => Accountants should make judgements
Initial allowance Allowance already exist
=> Charge as expense - subsequently increased
=> Statement of P/L Dr irrecoverable debts
Dr irrecoverable debts Cr allowance for receivables
Cr allowance for receivables (just increased amount)
 * => End of next period => Review - subsequently decreased
Dr allowance for recevables
Cr irrecoverable debts
(just decreased amount)
CHAPTER 9: PREPAYMENT & ACCRUAL
- Deferred income (Unearned rev - Liability): Cash collected before rev earned (pay in advance)
- Accrued income (rent receivable): Rev earned before cash collected (pay in arrear)
Next day => Pay Cash Complete
Reverse performing
service
Accrual - End of period => Adjustment Dr accrual Dr expense
(Current Dr expense Cr expense Cr cash
liability) Cr accrual (200) (300)
(200)
Prepayment - During period, pay cash:
(Current Dr expense
Asset) Cr cash Dr expense
- End of period => Adjustment Cr prepayment
Dr prepayment
Cr expense
Accured - End of period => Adjustment Dr rev
income Dr accured income Cr accured
Cr rev income
(1000) (1000)
Deferred - During period, receive cash:
income Dr cash
Cr rev/sales Dr deferred Dr TR
(5000) income Cr
- End of period => Adjustment Cr TR sales/rev
Dr rev/sales (2000) (WORK
Cr deferred income EXAMPLE)
(2000)

EXERCISE: (prepay + accrual)

 Calculate expense/prepayment/accrual/income/deferred income/accured income?
 Bookeeping: (chú ý thời điểm during hay end, …)
 Combine advance + arrear (open/close advance + arrear) =>expense?
=> Use payable account
 Combine advance + arrear (open/close advance + arrear) => income?
 => Use receivable account
Expense Payable account
Opening advance Opening arrear
Cash paid Total expense
Closing arrear Closing advance.

Income receivable account

Opening arrear Opening advance
Total incomoe Cash received
Closing advance Closing arrear

CHAPTER 10: NON-CURRENT ASSET &

DEPRECIATION
 PPE
 Intangible NCA
 Long-term investments
1. PPE – property, plan, equipment (IAS 16)
(land & building/plant & machinery/fixture & fitting (nội thất bên
trong)/vehicle/computer system)
* Cost of PPE=?
Depreciation
Carrying amount

1.1 Cost of PPE:

+ - Purchase price
- Delivery cost
- Stamp duty = import duties
- Cost of installation & assembly
- Professional fee = legal & architect fee: phí
hợp đồng
- Cost of testing
(Costs of initial adaptation of the building,
Cost of air conditioning unit necessary for
premises to be used)
- - Administration cost
- Training cost for staff
- Fuel in vehicle on delivery
- License fees for operating assets
- warranty covering breakdown
* Subsequent expenditure:
- Cost of Repairs => maintain existing performance => Expense => P&L
- Cost of major improvement/overhaul => enhancing benefit of PPE => Capitalised => Cost of
PPE => SOFP
1.2 Depreciation:
- Definition: systematic allocation of cost of PPE less its residual value over its useful life #
physical life
 Residual value (giá trị thanh lý ước tính): the estimate amount that the entity would
obtain from disposing of the asset at the end of its useful life, after deducting estimate
disposal costs
 Useful life
- Method:
 Straight line:
𝐶𝑜𝑠𝑡−𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 (𝑠𝑎𝑙𝑣𝑎𝑔𝑒 𝑣𝑎𝑙𝑢𝑒)
Annual depreciation = 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒
= (Cost – residual value) x %rate of depreciation
 Reducing balance method:
Deprecition (n+1) = carrying amount x %rate
= (Cost – Acc depreciation) x %rate
* Note 1: Apply consistenly
* Note 2: Capital expenditure => New PPE => should depreciated seperatedly from initaial
asset.
* Note 3: Review => changing dep method (khi thay đổi mục đích sử dụng)
1.3 Carrying amount = Cost of PPE – Acc Dep (tổng dep):
- Review of carrying amount (end of period) => fall in value => impairment loss
- Indication of impairment: (TEXT BOOK)
 Internal
 External
* Measurement of impairment loss => expense => P&L => written down current CA to new CA
Impairment loss (suy giảm giá trị) = Current CA – New CA/Recoverable amount
Compare its fair value less cost of disposal/sell and value in use (Choose higher) => recoverable
amount

1.4 Accounting for PPE:

- Acquire/purchase PPE:
- Using of PPE (repair, enahance, …):
 Depreciation (end of period):
 Impairment (end of period):
- Disposalof PPE:
1.4.1: Acquire PPE:
Acc Dep => NCA => contra of PPE => Âm
 B/d
dec Inc
B/d

Dr PPE
Dr VAT input (if any)
Cr cash/TP
1.4.2: Using PPE:
End of period:
 Depreciation: calculating dep charge = x
Dr dep charge/expense X
Cr Acc dep X
 Impairment => calculating impairment loss = y
Dr impairment loss Y
Cr PPE/carrying amount Y
1.4.3: Disposal of PPE:
 Sell old PPE, receive cash
 Sell old PPE, receive new PPE, pay difference => Part exchange
a) Sell old PPE, receive cash:
- Remove old PPE:
Dr Acc dep => remove 400
Dr disposal account (Giống P&L, but only use for NA) = carrying amount 100
Cr PPE: cost of PPE => remove 500
- Receive cash:
Dr cash = selling price
Cr disposal account
=> proceed of disposal = selling price
* Gain or loss on disposal = Selling price – CA
 Gain => Other income (P&L)
 Loss => Expense (Ex: vehicle for delivery => Distribution cost)
b) Part exchange:
- Remove old PPE:
Dr Acc dep 400
Dr disposal account = CA 100
Cr old PPE 500
- Receive new PPE, selling price for old 150
Dr new PPE: cost of PPE 800
Cr cash 650 => difference
Cr disposal account 150 = selling price/part exchange value
* Gain/loss on disposal: Selling price – CA
Cost of PPE
Bd Disposal - cost of old PPE
Purchase Impairment loss
bd

Acc Dep
Disposal - Acc dep old PPE Bd
Dep charge
Bd

CA
Bd CA of old PPE
Purchase Impairment loss
Bd Dep charge

2. Intangible NCA
(goodwill, development cost, licence, patent)
- Goodwill: lợi thế thương mại
 From reputation, staff
 Internal goodwill
=> Change day-to-day
=> Not show in FP
 Arising on acquisition of business
=> Goodwill = Purchase consideration – value of net asset
 NO DEPRECIATION/ AMORTIZATION
 Review for impairment loss
- Development cost: (R&D)
 Research => Always expense => P&L
 Development:
 Expense =>P&L
 Meet requirement => Must capitalised => Intangible asset
 Still amortization (2 method)
- Licence: (giấy phép)
- Patent: (bằng phát mình, sáng chế)
 Impairment loss
 Amortization
EXERCISE:
 Dạng 1: Calculate:
 Cost of PPE: include (VAT, discount, ...), exclude
 Depreciation charge: method, time
 Carrying amount
 Dạng 2: Calculate after review => Changing:
 Useful life (5=>7 years)
 Residual value
 Dep methods
 CA => impairment loss
 Dạng 3: Disposal => Gain or loss = Selling price – CA
 Dạng 4: Bookeeping/Errors:
 Acquire
 Using
 Disposal
Example:
Dr Cash
Cr suspense
=> Correct: Dr suspense + Remove old PPE
Cr disposal

CHAPTER 11: COMPANY FINANCIAL STATEMENT

1. Equity = Share capital + share premium + retain earnings + other reserve:

Closing capital = Opening capital + addition + net profit – drawings
* Nature of campany:
 Debt financing => liability (bond + bank)
 Equity financing => equity (stock)
Ownership: + Public company => plc => issue share in public large => Listed company: công ty
được niêm yết trên sàn chứng khoán or Unlisted (listed if meet requirements)
+ Private company => ltd => issue cho chỉ 1 số người (gia đình, …) => Unlisted
company: công ty không được niêm yết trên sàn chứng khoán
1.1 Share capital = number of shares issued (cổ phiếu đc phát hành) x par/face value (giá trị
mệnh giá)
- Share => shareholder = owner => can’t withdraw
 Ordinary share (equity share): cổ phiếu phổ thông => receive ordinary dividens (based on
the company’s performance + policy => not fixed + trả sau)
 Preference share: cổ phiếu ưu đãi => receive preference dividens (fixed + trả trước)
  Redeemable preference share: company can buy back (cổ phiếu có thể thu hồi) =>
long-term liability
 Irredeemable share => equity
 Dividends on preference shares:
 Redeemable preference share:
Dr FC
Cr accrued interest
 Irredeemable preference share:
Dr RE
Cr cash
- Issue share, pay in full, share capital = number of shares issued x par value
- Issue share, allow invester pay instalments (trả thành nhiều đợt)
=> first instalments 80% => called up
20% => uncalled => No record (chưa thanh toán vội)
=> Share capital = number of called up share x par value
- Issure share, not allow, waiting for payment
=> 80% => paid up
=> 20% => unpaid
=> Share capital = number of shares issued (100%) = cash inc (80%) + 20% (other receivables)
* Issue at premium/ above par: issued price (1,5) > par value (1) => premium = 0,5
=> Share cap = number of shares issued x par value
=> Share premium = number of shares issued x premium
- Right issue: issue new share for existing shareholder, raise money => in proportion (1 new for
2 old)
- Bonus issue: issue new share for exisiting shareholder, free of charge => in proportion (2 for 3)
1.2 Share premium:
=> Accounting:
- Issue share, fully paid:
Dr cash
Cr share cap = number of shares issued x par
Cr share premium = number of shared issued x premium
- Issued share, call up = 80%
Dr cash
Cr share cap = number of called up share x par
Cr share premium = number of called up share x premium
- Issue share, paid up = 80%
Dr cash 80% (paid up)
Dr other receivables: 20% (unpaid)
Cr share cap = number of shares issued (100%) x par
Cr share premium = number of shares issued x premium
- Right issue:
Dr cash
Cr share cap
Cr share premium
- Bonus issue:
Dr share premium
Cr share cap (dồn share premium về share cap)
* Khi ko đủ share premium để dồn về share cap
=> Dr share premium
Dr retain earning
Cr share cap
Share cap
Bd
decrease Issue new share
Bonus issue
Bd

Share premium
Bd
Bonus issue Issue new share
Bd
1.3 Retain earnings = Total net profit => Acc net profit
RE
Dividens Bd
Transafer to other reserve Net profit
Bd
Closing RE = Opening RE + net profit – dividens – other reserve (if any)
1.4 Reserve:

2. Long-term liability:
+ Redeemable preference share
+ Debenture/debt securities
- 1/10/2022: Borrow 1 billion/5 years => Long-term liability
Equal instalments
 First instalment: 1/10/2023
=> 31/12/2022 (end of period): 200,000 => current liability (9 months)
800,000 => non-current liability
- Pay interest => Finance cost
 Pay in cash => Cash dec
 Not pay yet => Accrual
=> End of period => Calculate interest
 Paid: Dr FC
Cr cash
 Unpaid: Dr FC
Cr accruals
- Extract trial balance => interest expense (FC): 1000
=> Total interest => Compare => Interest <= 1000: ko lam gi
Interest >1000: chưa trả hết, trả kì sau Dr FC
Cr accrual

3. Provision (dự phòng chi phí: expense inccurred => current liability) ><
Allowance (dự phòng khoản phải thu khó đòi)
- Current liability:
 Warranty (bảo hành)
 Law
- Create provision (first time):
Dr expense => p&l (1000)
Cr provision => current liability => SOFP (1000) => estimate
- Expense incurred:
 Actual expense (1200) > estimate
Dr expense 200
Dr provision 1000
Cr cash 1200
 Actual expense (800) < estimate
 Dr provision 1000
Cr expense 200
Cr cash 800
- End of year, review provision => Compare previous year
 This year > previous year:
Dr expense
Cr provision (increasing amount)
 This year < previous year:
Dr provision
Cr expense (decreasing amount)
4. Tax (on net profit): thuế thu nhập – only shown in company:
- End of year => calculate tax expense/charge = 1000 => estimate
2022: Dr tax expense => P&L
Cr tax payable => current liability => SOFP
2023, HMRC check:
 HMRC agreed = estimated:
Dr tax payable
Cr cash
 HMRC agreed (1200) > estimate => underprovision:
o Tax expense increase in 2023:
Dr tax expense 200
Cr tax payable 200
o Pay tax HMRC agreed:
Dr tax payable 1200
Cr cash 1200
 HMTC agreed (700) < estimate => overprovision:
o Tax expense decrease in 2023
Dr tax payable 300
Cr tax enpense 300
o Pay tax HMRC agreed:
Dr tax payable 700
Cr cash 700

Chapter 12:
 Statement of P&L
 SOFP
- Ending of period/Trial balance => Adjustment:
 Transactions after TB extracted
 Errors correction:
  Dr = Cr
 Dr # Cr => Suspense
 Special items:
* Chapter 7: COS – inventory:
- Cho closing inventory => Right number => Calculate COS => P&L
Wrong number => Find right number
Compare historical cost >< NRV
- If trial balance has closing inventory =>SOFP
* Chapter 8: Allowance
- Written off bad debt: Dr irr debt expense => Administrative expense
Cr TR
- Recover bad debt: Dr cash
Cr irr debt expense
- Allowance:
 Nếu TB chưa có allowance
=> Create allowance first time
Dr irr debt expense
Cr allowance
 Nếu TB đã có allowance
=> Compare => Only bookeeping phần tăng, giảm
- Closing allowance: net off TR
* Chapter 9: Accrual/Prepayment
- Expenese:
 Prepay: Dr prepayment
Cr expense
 Accrual: Dr expense
Cr accrual
- Income:
 Deffered: Dr income
Cr deffered
 Accrued: Dr accrued
Cr income
- Adjustment từng loại => 1 bookeeping
- Adjustment combine:
Ex: Pay 80,000 by cash (trong kì) gas expense. End of period, pay in arrear = 2000, pay in
advance = 30,000
=> 2 bookeeping (ko book nhan tien)
* Chapter 10: PPE, intangible asset:
- Depreciation => Calculate dep charge:
 Methods? (không có movement)
 Movement => Purchase/Disposal => Depcharge (n) = Depcharge (n-1) + Dep charge incr
(n) – dep charge decr (n)
Dr dep charge
Cr acc deprecitation
 Dep charge: allocate COS/ Ad ex/ Dis ex
- Impairment loss = Current CA – New CA (Recoverable amount)
Dr impairment loss
Cr PPE/CA
* Chapter 11:
- Provison: Dr expense
Cr provision
- Taxation:
 Calculate tax expense: 100 (2022)
Dr tax expense
Cr tax payable
 TB: tax payable (taxation, income tax)
 Dr 10:
2021 estimate tax expense 70 < 80: 2022 HMRC check => under provision
Dr tax ex (70)
Cr tax pay (70) => Trong kì
Dr tax pay (80)
Cr cash (80) => Đã record
Dr tax ex (10)
Cr tax payable (10) => Book thêm
 Cr 10
2021 estimate 70 > 60: HMRC check => over
Dr tax payable (10)
Cr tax expense (10) => Book thêm
 Dr tax pay (60)
Cr cash (60) => Đã record
Dr tax expense (70)
Cr tax pay (70) => Trong kì
 Interest
TB => liability => Total Interest
=> Interest/ interest payable/ interest ex => Interest charge => Đã paid
Compare interest paid >< Total interest:
 Interest paid >= Total interest => No record
 Interest paid < Total interest => Bank thêm unpaid
Dr FC
Cr Accrual
1. Irrecoverable debt expense => Ad expense
2. Alwayes focus on irr debt, allowance when account cost, TR
3. Return inward, outward => Purchase dec, inc => COS
4. Buy, purchase PPE => Dep account normally but CA on statement thi ke T acccount
5. Amortisation, impairment loss => Cost, PPE
6. P/L on disposal => dec Gross profit (nếu ko ghi rõ tính vào đâu)/ loss => COS inc
7. Rent is due quarterly in advance: trả trước hàng quý

CHAPTER 13: STATEMENT OF CASH FLOW

1. Purpose of cashflow:
- Provide information about change in cash&cash equivalent – short-term, highly liquid
investment (Ex: gold)
- Provide information about the needs of busniess to use those cash flow in 3 activities:
 Operating: derives from revenue-producing activities: mua, bán hàng, pay salary
 Investing: hđ đầu tư, purchase&disposal non-current asset (PPE, intangible NCA, long-
term investment)
 Financing: debt financing + equity financing – transaction relate to equity + borrowing
=> SOC is blood life => Most important (pay dividend, pay debt, pay salary)

2. Prepare:
2.1: Cash generated from operating activities:
- Direct method:
 Cash payment for purchasing goods
 Cash received from selling
 Cash payment for, on behalf of employee
- Indirect method:
Net profit # Cash => Accrual concept: rev earned, expense incurred # Cash concept/cash basis
=> Chuyển từ Net profit sang cash
* 3 rules:
 Remove expense/income not related to cash (P&L)
 Remove expense/income not related to operating activities (P&L)
 Movement of special items (SOFP)
Profit before tax (P&L)
Add back Deduct
Dep ex Gain on disposal (PPE, intangible) – investing
Amortization ex Investment income – investing (note/P&L)
Impairment loss Interest paid (FC) - financing
Loss on disposal – investing Tax paid
FC – financing phần lãi của khoản nợ (P&L)

Acc dep/Acc amortization

Acc dep of old asset disposal Bd
Dep charge/mortization charge
Bd

PPE/Intangible
Bd Cost of old asset disposal
Purchase Impairment loss
Bd

Interest payable
Interest paid Bd
FC
Bd

Tax payable
Tax paid Bd
Tax expense
Bd

- Movement of inventories:
 Inc => Cash dec
 Dec => Cash inc
- Movement of TR:
 Inc => Cash dec
 Dec => Cash inc
- Movement of prepayment:
 Inc => Cash dec
 Dec => Cash inc
- Movement of TP:
 Inc => Cash inc
 Dec => Cash dec
- Movement of Accrual/Provision:
 Inc => Cash inc
 Dec => Cash dec0
2.2 Investing activities:
- Cash purchase (PPE, intangible NCA)
+ Proceed from disposal
+ Investment income received
Investment income receivable
Bd Investment income received
Investment income
Bd

2.3 Financing activities:

+ Issue share:
Share cap
Bd
Cash raised
Bonus issue (ko tang tien)
Bd

Share premium
Bonus issue Bd
Cash raised
Bd
- Dividend paid:
RE
Dividend paid Bd
 Net profit
Bd
Movement borrowing:
 Inc => Cash inc
 Dec => Cash dec
* Note 1:
If current asset has short-term investment/gov bond: Trong note ghi high liquidity
=> + in cash & cash equivalent
* In SOFP, current liability has bank overdraft/overdraft:
=> - in cash & cash equivalent

CHAPTER 14: COMPANY FINANCIAL STATEMENT

UNDER UK GAAP
 Terminology: thuật ngữ
 Form
1. What is UK GAAP:
- UK GAAP: UK generally accepted accounting practice
- A combination of:
 Company law (Companies Act 2006)
 Uk accounting standards
 The effects of stock exchange listing requirement
 The effects of international financial reporting standards (IFRS)
2. Published account = Financial position
- UK companies are required by law to publish FS annually in a particular form (published
accounts = statutory accounts)
- Once prepared, the statement will be approved by the singature of 1 director, then appointed an
independenct person to audit and report. When it is completed, the accounts will be sent to
shareholders and Registar of company for filing.
=> True and fair view
- When prepared account under UK GAAP:
 P&L account (SOPL)
 Balance sheet (SOFP)
 A director’s report, director’s remuneration report (báo cáo lương thưởng)
  An auditor’s report addressed to the members (not to the directors) of the company
 A strategic report to inform members of the company and help them assess how the
directors have performed their duty
* Note 1: 3 cái còn lại là non-financial statement
 Listed company produce a SOPL and SOFP following international terminology and
formats
 Non-listed companies can choose between UK GAAP or international terminology and
formats for their published accounts
- UK GAAP terminology and format:
International term UK GAAP term
SOPL P&L account
SOFP Balance sheet
NCA Fixed asset
CA Net book value
Inventories (IAS 2) Stock
Receivables Debtors
Irrecoverable debt Bad debt
Irrecoverable debt expense Bad and doubtful debt expense
Allowance for irrecoverable debts Allowance for doubtful debts
RE (lợi nhuận giữ lại, lợi nhuận chưa phân Retained profit (reserve)
phối)
Payable Creditor
Non-current liabilities Creditors amounts falling due after more than
1 year
Current liablities Creditor amounts falliing due in less than 1
year
Rev Turnover
FC Interest paybale
- UK format - SOFP
Fixed asset
Intagible asset Development costs
Patent, licence, trade mark
Goodwill

Tangible asset L&B

P&M
Fixtures, fittings. Tools and
equipment
Motor vehicle

Current asset
Creditors amounts falling due
within 1 year
 Debenture loan
Bank overdraft and loans
Trade creditors
Provisions
Taxation
Accrual
Net current asset (liabilities)
Total assets less current
liabilities
Creditor amounts falling due
after

- UK GAAP – SOPL
Turnover
COS
Gross
Dis cost
Ad expense
Other operating income
Other operating profit
Int payables and similar charges
Profit before tax
Taxation
Profit after tax

CHAPTER 15: SOLE TRADER AND PARTNERSHIP

FINANCIAL STATEMENTS UNDER UKGAAP
1. Sole trader financial statement:
- Sole trader FS are similar in terminology and format to companies under UKGAAP
- Differences:
 Tax: no tax expense in P&L (vì đánh vào thuế thu nhập cá nhân)
 Format of P&L: no need to agregate expense under set headings (tổng hợp)
 Sole traders show capital as follow: (No share cap or reserves)
o Opening cap
o Capital introducd
 o Net profit/loss
o Drawings
o Closing capital
 No requirement to produce statement of changes in equity

2. Partnership:
- A business run by 2 or more pp together (unless it is a limited liability partnership (LLP)), it is
not separate legal entity
=> NO tax expense in P&L
- A general partnership is established formally with a written partnership agreement (or
Partnership act 1890):
 Capital
 Interest on capital:
 Partner’s salaries:
 Profit-sharing ratio:
 Guaranteed minimum profit share: 1/1/1
 Drawings:
* Note 2: 1 chủ sở hữu cho 1 chủ sở hữu khác vay, nếu đề bài ko nói gì thì lãi suất thường là 5%
=> trả cả gốc lẫn lãi
- Appropriating partnership profit:
 The partnership net profit is calculated in the same way as sole traders, then prepare an
appropriation statement:
o Allocates interest on cap, salaries, interest on drawings
o Share out the residual P&L according to profit sharing ration.
Net profit (P&L) => + Interest on capital
+ Salaries
- Interest on loan
= residual profit =>
- Guaranteed minimum profit share: partner can agree that one or more partner will receive a
minimum appropriation of profit even if the business make a loss, or one partner is appropriated
a loss.

3. Preparing partnership accounts:

- The ownership interest of each partner must be shown
- The net profit must be appropriated
- Captial accounts: initial cap contirbutions for each partner (remain unchange from year to year)
- Current account: record the profit retained (giu lai) in the business by the partner
=> the balance up and down
Capital account
Bd
A: 30, B: 20, C: 50
Bd

Current account
Drawing Bd A, B, C
interest on loan
interest on cap
Bd

- Accounting for interest loan:

Dr interest payable (FC – goes to P&L)
Cr current account
- Accounting for appropriation of net profit:
Dr P&L account: net profit amount
Cr P&L appropriation account: net profit amount
Dr P&L appropriation account
Cr current account
- Drawings:
Dr current accounts: dec
CR drawing account: inc

4. Accounting for changes in partnership structure:

4.1 Retirement or death of a partner:

off: tính số dư cuối kì

Sole traders
Partnerships
Limited liability companies
DEPRECIATION:
Dr depreciation expense (revenue expenditure)
Cr accumulated depreciation (contra-asset account) (hao mòn lũy kế)
CÁC CÔNG THỨC TÍNH TOÁN
Cost: khi hàng chưa được bán, nằm trong kho
COGS: khi hàng được bán
Opening + Purchased – Sold = Closing
 Opening + Purchased: Goods available for sale
 Sold: COGS
Gross profit = Rev – COGS
Gross profit margin = Gross profit/Rev Margin on sale
Mark-up = Selling price/cost -1
Original cost = Selling price/ (1 + Mark-up) Mark-up on cost
Ex: Margin = 75% => profit = 75% Sale
Profit + Cost = Sale => Cost = 25% Sale
Profit for the year (Net profit) = Gross profit – other expenses + non-trading income
𝐶𝑜𝑠𝑡−𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 (𝑠𝑎𝑙𝑣𝑎𝑔𝑒 𝑣𝑎𝑙𝑢𝑒)
Annual depreciation = 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒
Annual depreciation/Original cost =%
Book value (giá trị thực) = Cost - Accumulated depreciation

REVENUE PRINCIPLE: earned

MATCHING PRINCIPLE: expenses are matched with the revenues.
Accrued expenses:
Dr Expense
Cr Accruals
SUSPENSE ACCOUNT: (nghi ngờ)
  Temporary account used when the computerized accounting or the book keeper is unsure
of how to record one side of transaction
 Once issue has been identified => cleared => using journal entry
Loan to: cho ai vay >< loan from: vay ai
Due to: nợ ai >< due from: ai nợ
Accured expense: chi phí đến cuối kì vẫn chưa được trả
Non-current asset được theo dõi qua:
 Cost
 Accumulated depreciation
 Carrying amount/Book value
Discount received: phần chiết khấu sớm được hưởng => deducted from purchase
Carrige in/ freigh-in/transportation in/delivery inward: chi phí vận chuyển hàng mua về => add
to purchase => COGS
Carriage out/freigh-out/transportation out/delivery outward: selling expense/distribution cost

Periodic system Perpetual system

Def:
 NO day-to-day records of units sold or Opening (Known) + Purchased (Known) –
on hand Sold (Known) = Closing (Known)
 Records of “in” movement only

Opening (Known) +Purchased (Known) –
Sold (not Known) = Closing (Known)

TRIAL BALANCE (sau khi lập xong chữ T)

- Initial trial balance/Unadjusted trial balance:
- Adjusted trial balance/Final balance/Finalise balance:
- Post-closing trial balance (only have A, L, C)
Credit note: negative invoice, business phát hành để trả lại tiền, …

ACCRUALS & PREPAYMENTS:

- Adjusting entries at end of an accounting period.