CHAPTER 1
MULTIPLE CHOICES QUESTION
1. Production costs in manufacturing enterprises include:
A. Direct material costs, direct labor costs, production overhead costs and research and
development costs
B. Direct material costs, direct labor costs, production overhead costs, selling costs,
business administrative costs
C. Direct material costs, direct labor costs, production overhead costs, selling costs,
business administrative costs, distribution costs and customer services costs
D. Direct material costs, direct labor costs, and production overhead costs
2. Work in progress costs related to:
A. Unfinished products that are being processed
B. Finished, untested products are warehoused
C. Products in production process
D. a, b, c are all correct
3. Direct materials costs arise when:
A. Depreciation of fixed assets used directly to produce products
B. Issue tools used to produce products
C. Issue raw materials used for product production
D. a, b, c are all correct
4. Direct labor costs arise when:
A. Calculating salaries and salary deductions included in the costs of employees in the
enterprise
B. Calculating salary and salary deductions included in expenses according to regulations
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C. Calculating salaries payable to workers directly producing products
D. Calculating salaries, salary deductions included in expenses for production workers
5. Production overhead costs arise when:
A. Calculating salaries payable to production workers
B. Raw materials used for manufacturing products
C. Depreciating long-term assets used to manufacture products
D. a, b, c are all wrong
6. Production overhead costs arise when:
A. Calculating salaries payable to workers directly producing products
B. Calculating salaries payable to factory supervisors
C. Issuing materials used directly for product production
D. a, b, c are all wrong
7. Production overhead costs arise when:
A. Calculate salaries payable to workers directly involved in production
B. Issue raw materials used directly for product production
C. Issue supplies used to produce products
D. a, b, c are all wrong
8. Production overhead costs arise when:
A. Calculating salaries payable to workers directly involved in production
B. Calculating the salary payable to the company's security guards
C. Calculating the salary payable to the factory supervisor
D. a, b, c are all wrong
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9. Depreciation of long-term assets used to directly produce products in manufacturing
enterprises, the entries are:
A. Debit Account 621/Credit Account 214
B. Debit Account 622/Credit Account 214
C. Debit Account 623/Credit Account 214
D. Debit Account 627/Credit Account 214
10. Calculating salaries payable to factory management employees, the entries are:
A. Debit Account 642/ Credit Account 334
B. Debit Account 627/ Credit Account 334
C. Debit Account 623/ Credit Account 334
D. Debit Account 335/ Credit Account 334
11. Issue primary materials to produce product A of 15.000.000 VND and product B of
13.500.000 VND. The entries of subsidiary accounting are:
A. Debit Account 621: 28.500.000/ Credit Account 152 : 28.500.000
B. Debit Account 627: 28.500.000/ Credit Account 152 : 28.500.000
C. Debit Account 621A: 15.000.000/ Debit Account 621B: 13.500.000/ Credit Account
152: 28.500.000
D. Debit Account 627A: 15.000.000/ Debit Account 627B: 13.500.000/ Credit Account
152 : 28.500.000
12. Issue materials to produce product A of 12.000.000 VND and produce product B of
8.500.000 VND. The entries of general accounting are:
A. Debit Account 621: 20.500.000/ Credit Account 152: 20.500.000
B. Debit Account 627: 20.500.000/ Credit Account 152: 20.500.000
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C. Debit Account 621A: 12.000.000/ Debit Account 621B: 8.500.000/ Credit Account 152:
20.500.000
D. Debit Account 627A: 12.000.000/ Debit Account 627B: 8.500.000/ Credit Account
152: 20.500.000
13. At the end of the period, there were some materials of 20.000.000 VND issued to
produce products that were not used up. They were left in the workshop for further
production in the next period. The entries are:
A. Debit Account 627: (20.000.000)/ Credit Account 152: (20.000.000)
B. Debit Account 621: (20.000.000)/ Credit Account 152: (20.000.000)
C. Debit Account 152: 20.000.000/ Credit Account 621: 20.000.000
D. No entries.
14. After the product manufacturing process, the business receives scrap into the warhouse
for 1.000.000 VND. The entries are:
A. Debit Account 152: 1.000.000/ Credit Account 711: 1.000.000
B. Debit Account 153: 1.000.000/ Credit Account 154: 1.000.000
C. Debit Account 152: 1.000.000/ Credit Account 154: 1.000.000
D. Debit Account 153: 1.000.000/ Credit Account 711: 1.000.000
EXERCISES 1.1
At XYZ Company, there are accounting documents about raw materials A as follows:
- Balance on January 1, year N: 1.000 kg, unit price 240.000 VND.
- On January 5: purchased 2.000 kg, purchase price 236.000 VND, shipping and handling
costs 800.000 VND.
- On January 8: 1.200 kg was issued to manufacture products.
- On January 12: 1.000 kg was issued to serve production.
- On January 18: purchased 3.000 kg, unit price 250.000 VND.
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- On January 20: purchased 1.600 kg, unit price 260.000 VND.
- On January 22: 2.000 kg was issued to manufacture products.
- On January 25: 2.600 kg was issued to manufacture products.
Requirement: Identify the cost of material A issued during the period and the cost of
material A in ending inventory, in case the company calculates cost of inventory according
to the following methods:
- First in first out.
- Ending weighted average cost
- Moving weighted average cost
EXERCISES 1.2
XYZ Company accounts for inventory according to perpetual inventory system, calculates
VAT according to the deduction method, and calculates the cost of inventory according to
the moving average cost method. Excerpt from accounting documents about raw materials
at the company as follows (unit 1.000 VND):
Beginning balance:
- Account 152: 80.000 (material details-A: quantity 100 kg, unit price 800/kg).
- Account 151: 50.000 (material details-B: quantity 200 kg, unit price 250).
- Other accounts are assumed to have reasonable balances.
The business transactions occur during the period as follows:
1. Purchased 100 kg of material B on credit from seller BB. The purchase price excluding
VAT was 300, 10% VAT.
2. Returned 20 kg of material B purchased in transaction 1 to seller BB due to poor quality.
3. Paid the balance to seller BB in cash in banks.
4. Purchased 1.000 kg of material A, paid by bank deposit. The purchase price excluding
VAT was 800, the VAT rate was 10%. The cost of transporting materials was paid in cash
in banks 13.200, including 10% VAT.
5. Purchased 500 kg of material A on credit from seller AA. The purchase price excluding
VAT was 820, the VAT rate was 10%.
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6. Paid off all debt to seller AA in cash in banks. It is known that due to early payment, the
company was entitled to a discount of 4.010.
7. Issued 1.000 kg of material A to directly manufacture products.
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9. Issued 200kg material B for production management.
10. Results of materials physical count are as follows:
- Overage of material A: 20.000
- Shortage of material B: 2.500
Material overage or shortage of unknown cause s awaiting resolution.
11. Decision to handle overage materials discovered in inventory physical count as follows:
- Overage of material A is recorded as an increase in other income.
- Shortage of material B required the warehouse keeper to pay full compensation, and
compensation in cash on hand was collected.
Requirements: Journalizing the transactions.
EXERCISES 1.3
There are salary documents at ABC company as follows (unit 1.000 VND):
1. Calculated salaries payable to employees during the month:
- Wages payable to workers directly producing products: 500.000.
- Salary payable to factory management employees: 120.000.
- Salary payable to sales employees: 60.000.
- Salary payable to enterprise management employees: 144.000.
2. Appropriated Trade union fees, social insurance, health insurance, unemployment
insurance according to the prescribed regulation.
3. Paid salary deductions to the agencies by bank transfer of 240.000.
4. The unused advance of 12.000 and compensation of 5.000 are deducted from employees’
salaries.
5. Paid salary payable to employees by bank transfer.
Requirements:
1. Journalizing those transactions.
2. Preparing T-account of 334.
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EXERCISES 1.4
ABC Company accounts for inventory using the perpetual inventory system and calculates
VAT using the deduction method. Extract from accounting documents related to long-term
assets at the company as follows: (unit: 1.000 VND)
1. Acquire an office building at a purchase price of 700.000, 10% VAT. Non-refundable tax
and fees are 50.000.
2. Dispose of a production machine, historical cost of 400.000, fully depreciated.
Liquidation costs paid in cash on hand are 2.000, scrap value recovere and sold for cash in
banks of 6.600, of which VAT 600.
3. Purchase a store for 4.000.000, paid by bank transfer, of which the value of land use
rights is 3.500.000 and the value of the store on land is 500.000.
4. The production department reports damage to a two-time allocated supply. The supply
costs 20.000. The scrap is received into the warehouse of 520. The business claims
compensation from the employees due to premature damage of 550.
5. Issue supplies of 20.000, allocated two times at the office.
Requirements: Journalizing those transactions.
EXERCISES 1.5
ABC Company accounts for inventory according to perpetual inventory system, VAT on
purchases is deducted. In year N, there are accounting documents on fixed assets as follows
(unit: 1.000 VND):
1. Purchased 20 sets of TVs to use at the store; the purchase price excluding 10% VAT was
120.000, paid by bank deposit. Transportation costs paid by employee advances were
22.000, of which VAT was 2.000. The useful life of the TV was estimated to be 6 years.
2. Purchased a production machine; the purchase price excluding 10% VAT was 600.000.
Installation and testing costs were paid by bank deposit of 55.000, which includes VAT at
a rate of 10%. The estimated useful life of the production machine was 8 years.
3. Received additional capital contribution from the owner in the form of a car; the agreed
cost of capital contribution was 1.000.000, registration fee to transfer vehicle ownership
paid in cash in banks was 20.000. The estimated useful life of this car was 6 years.
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4. Purchased a piece of land and a building on the land to make a store. The purchase price
of 8.000.000 was paid with a long-term bank loan, of which the land cost was 6.000.000
and the cost of the building was 2.000.000. The registration fee payable to register property
ownership and use rights was 0.5% of the property cost, paid by bank deposit. The cost of
repairing the building before use had not been paid to the construction contractor of 33.000,
of which VAT was 3.000. The estimated useful life of the house was 20 years; the land use
rights have an indefinite life.
Requirements:
1. Journalizing those transactions.
2. Calculate the depreciation rate and annual depreciation expenses for each fixed asset
using the straight-line method.
EXERCISES 1.6
At ABC manufacturing enterprise, inventory accounting follows the perpetual system,
inventory costs are calculated using the first-in, first-out method, and VAT is calculated
using the deduction method. In March/N, there were the following transactions (unit 1.000
VND):
- Balance at the beginning of the period:
+ Account 154: 30.000
90.000
+ Account 152: 60.000 (150 kg, unit price of 600/kg)
1. Received materials of 450 kg at a purchase price excluding VAT of 750/kg, 10% VAT,
on account.
2. Issued 450 kg of raw materials used directly to produce products.
3. Issued supplies of 30.000 for factory management.
4. Depreciated long-term assets in the factory of 45.000.
5. Allocated costs of supplies (issued from the previous period) of 38.000 for production.
6. Purchased 300kg of materials at a unit price excluding 10% VAT of 500, paid by bank
deposit. Materials were not received into the warehouses but issued directly to produce
products.
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7. Monthly salaries payable to direct production workers of 150.000 and factory
management employees of 30.000.
8. Appropriated salary deductions at the prescribed rate.
9. Paid by bank transfer for electricity, water, and telephone bills at the workshop of 33.000,
of which VAT was 3.000.
10. Transfer and summarize production costs to calculate finish good cost, assuming that:
- The closing work in process was 15.000.
- The business completed 30 finished products.
Requirements:
1. Journalizing those transactions.
2. Posting the above transactions to the ledgers of accounts 621, 622, 627, 154, 155.
EXERCISES 1.7
Company ABC produces two products A and B, using perpetual inventory system, VAT
deduction method, and FIFO method. In year N, there are accounting documents at the
company as follows (unit: VND):
- Work in process at the beginning of March/N:
Product A: 20.950.000
Product B: 70.550.000
- Raw materials at the beginning of March/N:
Raw material X: 1.000 kg, unit price: 110.000.
Raw material Y: 2.000 kg, unit price: 220.000.
- Documents related to the production process at the company in March/N:
1. The cost of electricity used in the production department was paid by bank deposit. The
price excluding VAT was 8.500.000; the VAT rate was 10%.
2. The cost of repairing long-term assets at the factory was paid in cash in banks of
198.000.000, including 10% VAT.
3. Purchased 4.000 kg of raw materials X on account from supplier P at the purchase price
excluding VAT of 119.500, 5% VAT. Shipping and unloading costs excluding VAT are
2.000.000, 10% VAT, paid in cash on hand.
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4. Issued 3.500 kg of raw materials X to directly manufacture product A.
5. Salaries payable to employees arising during the period:
- Workers directly producing product A: 25.000.000;
- Workers directly producing product B: 35.000.000;
- Management and service employees of the factory: 5.500.000.
6. Appropriated salary deductions at the prescribed rate.
7. Purchased 3.000 kg of raw material Y; the purchase price excluding 10% VAT was
350.000, paid to the seller by bank deposit.
8. Issued 2.800 kg of raw materials Y to directly manufacture product B.
9. Rent a production plant for 24.000.000 excluding tax, 10% VAT, paid by bank deposit.
10. Issued supplies (one-time allocation) of 600.000 for production.
11. Issued supplies of 40.000.000 (allocated in 24 periods) for production.
12. Depreciated long-term assets in the production: 14.800.000.
13. Scrap from the production of product A was received into the warehouse: 900.
14. Production results:
- Completed 100 units of product A and some unfinished products of 80.200.000.
- Completed 80 units of product B and some unfinished products of 130.000.000.
Requirements:
1. Journalize those transactions, assuming the accountant allocates manufacturing
overhead costs to products A and B based on direct materials costs.
2. Posting to ledgers of Account 621, Account 622, Account 627, Account 154 and Account
155 (summary and details).
EXERCISES 1.8
ABC Company sells 2 products A and B, accounting for inventory according to the
perpetual system, VAT deduction method, VAT 10%, using moving average cost method.
(unit: VND).
A. Beginning balance on January 1, N:
1. Account 155: 120.000.000, included:
Product A: 1.000 pieces, unit price of 20.000.
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Product B: 2.000 pieces, unit price of 50.000.
2. Account 157: 9.750.000. Consignment details: 500 product A, unit price of 19.500.
3. Other accounts are assumed to have reasonable balances.
B. In January/N, the company had the following business transactions:
1. On January 2, received finished goods from production: product A: 3.000 pieces, unit
cost of 22.000; Product B: 3.000 pieces, unit price of 55.000.
2. On January 4, sold 2.000 pieces of product A to customer M at a unit price including
10% VAT of 55.000, on credit. Payment conditions stated in the sales contract were as
follows: "Credit term is 30 days, payment within 7 days from the date of purchase, the
buyer is entitled to a payment discount of 1% of the total payment amount.".
3. On January 5, sold 2.000 pieces of product B to customer N at the selling price including
10% VAT of 110.000, on credit.
4. On January 6, customer N complained that 100 pieces of products B (purchased in
transaction 3) were of poor quality. After negotiation, the business agreed to reduce the
price by 30% for those poor-quality products.
5. On January 10, received a credit note from the bank informing payment of customer M.
6. On January 12, 800 pieces of product A were sent to agent X to sell. The selling price
excluding 10% VAT was 50.000.
7. On January 18, agent X announced that it had sold 600 pieces of product A and had paid
the business by bank deposit. The business paid sales commission to agents of 1.650.000
(including 10% VAT) by bank transfer.
8. On January 25, sold 3.000 pieces of product B to customer P at a selling price excluding
10% VAT of 100.000, on credit.
9. The salary payable to sales employees was 30.000.000 and enterprise management
employees was 40.000.000.
10. Appropriated salary deductions at the prescribed rate.
11. Depreciated long-term assets in the sales department of 12.000.000, the business
management department of 15.200.000.
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12. Electricity and telephone bills used in the business management department incurred
during the month at a price excluding 1-% VAT of 6.000.000, paid in cash in banks.
14. Issued some packaging for sales purposes of 3.000.000.
15. Expenses for posting product advertisements at a price excluding 10% VAT 16.660.000,
paid by bank transfer.
16. Corporate income tax expenses payable was 10.000.000.
Requirements:
1. Journalizing those transactions.
2. Posting to ledgers.
3. Journalizing and posting closing entries.
EXERCISES 1.9
Sao Mai Company accounts for inventory using the perpetual system and calculates VAT
using the deduction method. Excerpt from accounting documents at the company about
raw materials A as follows (unit 1.000 VND):
Material A at the beginning of the period: 100.000 (200 kg, unit price of 500/kg)
Business transactions related to raw materials arising during the period:
1. Purchased 600 kg of material A paid by bank deposit at a purchase price excluding 10%
VAT 500. Shipping cost paid in cash was 13.200, of which VAT was 1.200.
2. Issued material A to directly manufacture 500 kg of product.
3. Purchased 700 kg of material A on credit from the seller. The purchase price, including
10% VAT, was 561. The cost of transporting and loading materials to the warehouse was
paid in cash in banks of 15.400, of which VAT was 1.400. Due to the wrong specifications
compared to the contract, the seller gave the business a 20% discount.
4. Issued material A used directly to produce 800 kg product.
5. Purchased 100 kg of material A paid by bank deposit at a unit price excluding 10% VAT
520.
Requirements:
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1. Calculate the cost of material A issued during the period and the cost of material A in
inventory at the end of the period according to the methods: First in - first out, Ending
average cost, moving average cost.
2. Journalizing those transactions and posting them to the ledger of 152 (assume the
company calculates the price of material A according to FIFO method).
EXERCISES 1.10
Company N accounts for inventory using the perpetual inventory system, produces two
types of products A and B (unit: 1.000 VND).
Opening balance of Account 154: 50.000 (details: Account 154A: 40.000; Account 154B:
10.000).
The production costs incurred during the period is summarized as follows:
Direct production costs Overhead costs
Product A Product B
Primary raw materials 720.000 500.000
Auxiliary materials 60,000 48,000 20.000
Supplies, one-time allocation (issue cost) 112.000
Supplies, two-time allocation (issue cost) 80.000
Damaged supplies, two-time allocation (issue cost) 120.000
Salary 800.000 400.000 200.000
Mid-shift meal allowance 300.000 50.000 50.000
Salary deductions According to regulations
Depreciation of long-term assets 61.000
Other costs 10.000
1. The primary materials used to produce product A are not used up of 20.000, received
into the warehouse.
2. Scrap received from the production of product B was 10.000.
3. At the end of the period:
- Finished goods: 1.000 pieces of products A and 2.000 pieces of products B.
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- Product A in progress at the end of the period was 30.000; Product B has no work in
progress at the end of the period.
- Manufacturing overhead costs allocated to each type of product were based on the direct
labor costs.
Requirements:
1. Journalizing those transactions and posting to ledgers.
2. Allocate manufacturing overhead costs to each type of product and calculate the unit
cost of products A and B.
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