CHAPTER 3 RECEIVABLES AND PAYABLES

MULTIPLES CHOICE QUESTIONS

1. Account 131—Accounts receivable has a credit balance because:
A. The amount receivable is greater than the amount paid in advance by the customers.
B. The amount is still receivable from the customers.
C. The amount is paid in advance by the customers.
D. All are incorrect.
2. On June 5, the business receives an advance payment of 10 million VND from the customer
in cash, the accountant records:
A. Debit 111/Credit 331: 10 million.
B. Debit 111/Credit 1381: 10 million.
C. Debit 111/Credit 141: 10 million.
D. Debit 111/Credit 131: 10 million.
3. When selling goods on credit, the entry will be recorded as:
A. Debit 131/Credit 711; 3331.
B. Debit 131/Credit 515; 3331.
C. Debit 331/Credit 511; 3331.
D. Debit 131/Credit 511; 3331 and Debit 632/Credit 156.
4. The payment discount to customers will be recorded as:
A. Debit 515/Credit 131.
B. Debit 635/Credit 131.
C. Debit 5211/Credit 131.
D. Debit 642/Credit 131.
5. The trade discount to customers will be recorded as:
A. Debit 515/Credit 131.
B. Debit 635/Credit 131.
C. Debit 5211; 3331/Credit 131.
D. Debit 642/Credit 131.
6. Overage inventory due to physical count for unknown reasons is recorded as:

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A. Debit account 152, 153, 155, 156…/Credit account 3381.
B. Debit account 152, 153, 155, 156…/Credit account 3388.
C. Debit account 152, 153, 155, 156…/Credit account 1381.
D. All are incorrect.
7. Corporate income tax payable is recorded as:
A. Debit 911/Credit 3334.
B. Debit 821/Credit 3334.
C. Debit 911/Credit 821.
D. Debit 3334/Credit 821.
8. Receiving the tangible assets as a long-term deposit from customers, the entry is recorded
as:
A. Debit 211/Credit 344.
B. Debit 211/Credit 335.
C. Do not record an increase in long-term assets, monitor it in detail and explain on FS.
D. All are incorrect.
9. In case of collecting a penalty for contract breach and deducting it from the customer’s
deposit, the entry is:
A. Debit 344/Credit 111,112.
B. Debit 344/Credit 711.
C. Debit 344/Credit 515.
D. B and C are correct.
10. Social insurance, unemployment insurance, health insurance, and trade union fees are
appropriated according to the prescribed rate and are included in expenses. The entries are:
A. Debit 622, 627, 641, 642/Credit 334.
B. Debit 622, 627, 641, 642/Credit 338.
C. Debit 334/Credit 338.
D. Debit 3383/Credit 334.

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EXERCISES
E3.1
ABC Trading and Production Company accounts for inventory according to the perpetual
system, uses the moving average cost method to determine the cost of inventory, and calculates
VAT according to the deduction method. Excerpt from documents on production and business
activities during the period of ABC company as follows (Unit: 1.000 VND):
Beginning inventory of merchandise goods A: 300 kg, unit cost: 220/kg.
Business transactions occur during the period:
1. March 2, N: Purchase 1.000 kg of merchandise goods A. The purchase price includes 10%
VAT of 275/kg; half of the payment is paid by bank deposit. The merchandise has received in
stock. Shipping cost including 10% VAT is 6.050, paid in cash on hand.
2. March 4, N: Sell on credit 500 kg of goods A. The selling price, including 10% VAT, is
418/kg.
3. March 5, N: Purchase 400 kg of merchadise A. The purchase price includes 10% VAT of
253/kg, paid by bank deposit. The merchandise has received in stock.
4. March 6, N: Issue 20 kg of merchandise A for the business management department.
5. March 8, N: Sell 500 kg of merchandise A at a selling price of 440/kg (including 10% VAT),
receive in cash in banks.
6. March 9, N: Purchase on credit 600 kg of merchandise A. At the end of the period, the
merchandise has not yet arrived in stock. The purchase price, including 10% VAT, is 275/kg.
7. March 14, N: Pay to supplier in transaction 1 by bank deposit.
8. March 19, N: Receive cash from the buyer in transaction 2 after deducting the payment
discount for the buyer (1% of the total payment amount).
Requirements: Journalize the transactions.
E3.2
ABC Trading Company has a monthly accounting period, applies the perpetual inventory
system, and calculates VAT according to the deduction method. Excerpt from the payment
information in May/N at ABC as follows (unit: 1.000 VND):
Beginning balance:

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 Account 131 (Customer X): 400.000
Account 131 (Customer Y): 600.000
Account 331 (Supplier P): 100.000;
Account 131 (Credit balance of Customer M): 800.000
Account 131 (Customer N): 800.000
Account 331 (Supplier Q): 700.000
Business transactions occur during the period:
1. May 3: Company X paid all debt through bank account after deducting the payment
discount of 2%.
2. May 4: Company Y transfers half of the balance to the ABC’s bank account.
3. May 5: Purchased on credit a batch of goods at the selling price of 660.000 (including
10% VAT) from supplier P. Transporting cost was 12.100 (including 10% VAT), paid in cash
in banks.
4. May 6: Purchased a new car on credit from supplier K at the purchase price including
10% VAT of 990.000.
5. May 7: Received notice from supplier K that the company will receive a promotion of
8,000 VND due to a lottery draw. The company paid the balance to supplier K by bank transfer.
6. May 9: Paid store rent expenses of May through bank transfer 66.000 (including 10%
VAT).
7. May 20: Paid to supplier Q after deducting payment discount of 1%.
Requirements
1. Journalize the transactions.
2. Present information about receivables and payables on the SFP of ABC Trading
Company as of May 1, N, and May 31, N (according to the form). Assume that receivables
and payables are both short-term.

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 ABC Trading company STATEMENT OF FINANCIAL POSITION
As at………………………………………..
ASSETS Code Opening Closing
balance balance
…
III. Short-term receivables 130
1. Short-term receivables from customers 131
2. Prepayment to suppliers 132
…
LIABILITIES AND EQUITY
....
1. Short-term payable to suppliers 311
2. Short-term payment in advance from customers 312
...

E3.3

Company D applies the perpetual inventory system and calculates VAT using the deduction
method. The business transactions at company D are as follows (Unit: 1.000 VND):
1. Purchase on account a tangible asset at the purchase price (including 10% VAT) of
5.500.000.
2. Purchase raw materials at the purchase price (including 10% VAT) of 330.000, paid in half
by bank deposit.
3. Purchase on credit merchandise goods at the purchase price (including 5% VAT) of
304.500. The transportation cost is 5.500 (including 10% VAT), paid in cash on hand.
4. Sell raw materials (purchased in transaction 2) at the selling price (including 10% VAT) of
550.000, received by bank deposit.
5. Sell on credit a half of merchandise goods of transaction 3 at the selling price (including
10% VAT) of 275.000.

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6. Sell a tangible asset at the selling price excluding 10% VAT of 800.000, received by bank
deposit. The cost of the tangible asset is 1.100.000, and the accumulated depreciation is
330.000.
7. At the end of the period, deduct VAT input from VAT output to calculate VAT payable.
Requirements:
1. Journalize the transactions.
2. Post journal entries to the ledger accounts 133 and 333.
E3.4
Company E applies the perpetual inventory system and calculates VAT using the deduction
method. The business transactions at company E are as follows (unit: 1.000 VND):
1. Purchased on credit 1.000 kg of raw material A at a unit price (excluding 10% VAT) of
210/kg. Transporting cost was 25/kg (excluding 10% VAT), paid in cash in banks.
2. Mortgaged merchandise goods to the bank for a loan of 450.000, received in cash in banks.
The merchandise goods cost 600.000.
3. Deposited 50.000 cash in banks to the supplier to purchase merchandise goods A at the
purchase price of 176.000 (including 10% VAT).
4. Received merchandise goods A (in transaction 3) into warehouse, paid the balance by bank
deposit.
5. Deposited 100.000 cash in banks for a car acquisition at the purchase price of 1.600.000.
According to the deposit agreement, if the buyer neither purchases the car nor pays within the
payment period, the buyer will compensate with the deposit. On the contrary, if the seller does
not sell it, the seller will compensate twice the deposit.
6. The company did not purchase the car (deposited in transaction 4), and compensate the seller
with the deposit.
Requirement: Journalize the transactions.
E3.5
Company F accounts for inventories using the perpetual system and calculates VAT using the
deduction method. The business transactions in company F are as follows (unit: 1.000 VND):
1. Paid 1.500.000 cash in banks as a deposit to purchase a land costing 11.000.000.

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 2. Paid in advance to company Q to purchase merchandise goods M at the selling price
of 770.000 (including 10% VAT). The advance payment was 15% of the total payment.
3. Sold merchandise goods N on credit to company P at the selling price (including
10% VAT) of 660.000. The cost of goods sold was 330.000. According to credit term, if
the buyer pays within 5 days from the date of receipt of the goods, it will receive a payment
discount of 2% of the total payment.
4. Four days after receiving goods N, company P paid the balance by bank deposit.
5. Received merchandise goods M of transaction 2.
6. Paid by bank deposit to company Q for the purchase of merchandise goods M.
7. Received the land of transaction 1. The company paid to the supplier by the deposit
and cash in banks.
Requirement: Journalize the transactions.
E3.6
ABC Company has the information about the allowance for bad debts as follows:

1) The balance at the end of year N of account 2293 is 0. At the end of year N+1, based on
reliable evidence about the bad debts due to the bankruptcy of customer A, ABC Company
determines the allowance for bad debts of customer A of 100 million VND.

2) At the end of year N+2, A has partially improved its financial position. Therefore, ABC
Company determines the allowance for bad debts of customer A of 70 million VND. Besides,
ABC Company determines the allowance for bad debts of customer B of 40 million VND.

3) Year N+3:

3.1. In August/N+3, customer B declares bankruptcy. ABC Company decides to write off
customer B’s receivable of 100 million VND.

3.2. In October/N+3, ABC Company collects the debt of customer C (which was written off
in year N) of 60 million VND in cash in banks.

3.3. In November/N+3, customer A pays 400 million VND in cash in banks to ABC Company.

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3.4. At the end of year N+3, ABC Company determines the allowance for bad debts of
customer D of 20 million VND.

Requirement: Journalize the transactions of years N+1, N+2, and N+3 at ABC Company.