CHAPTER 1

MULTIPLE CHOICES QUESTION

1. Production costs in manufacturing enterprises include:
A. Direct material costs, direct labor costs, manufacturing overhead costs and research and
development costs
B. Direct material costs, direct labor costs, manufacturing overhead costs, selling costs,
business administrative costs
C. Direct material costs, direct labor costs, manufacturing overhead costs, selling costs,
business administrative costs, distribution costs and customer services costs
D. Direct material costs, direct labor costs, and manufacturing 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. Calculate salaries and salary deductions included in the costs of employees in the
enterprise
B. Calculate salary and salary deductions included in expenses according to regulations
C. Calculate salaries payable to workers directly producing products
D. Calculating salaries, salary deductions included in expenses and leave salary deductions
for production workers
5. Manufacturing overhead costs arise when:
A. Calculate salaries payable to product production workers
B. Exporting raw materials used for product production
C. Depreciation of fixed assets used to produce products
D. a, b, c are all wrong
6. Manufacturing overhead costs arise when:
A. Calculate salaries payable to workers directly producing products
B. Calculate salaries payable to factory supervisors
C. Issuing materials used directly for product production
D. a, b, c are all wrong
7. Manufacturing 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 tools used to produce products
D. a, b, c are all wrong
8. Manufacturing overhead costs arise when:
A. Calculate salaries payable to workers directly involved in production
B. Calculate the salary payable to the company's security guards
C. Calculate the salary payable to the factory supervisor
D. a, b, c are all wrong
9. Depreciation of fixed assets used directly to 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 staff, 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. Issuing main materials to produce product A is 15.000.000 VND, producing product B
is 13.500.000 VND, the entries are:
A. Debit Account 621: 28.500.000/ Credit Account 152 : 28.500.000
B. Debit Account 621: 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 is 12.000.000 VND, producing product B is
8.500.000 VND, the entries are:
A. Debit Account 627: 20.500.000/ Credit Account 152: 20.500.000
B. Debit Account 627: 20.500.000/ Credit Account 152: 20.500.000
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 issued to produce products that
were not used up were left in the workshop for further production in the next period, worth
20.000.000 VND, 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 provision
14. After the product manufacturing process and the recovery of warehoused scrap worth
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, 2019: 1000 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 the warehouse for product production.
- On January 12: 1.000 kg was issued to serve production.
- On January 18: purchased 3000 kg, unit price 250.000 VND.
- On January 20: purchased 1600 kg, unit price 260.000 VND.
- On January 22: 2.000 kg was issued to the warehouse for product production.
- On January 25: 2.600 kg was issued to the warehouse for product production.
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.
Economic transactions arising during the period:
1. Received 100 kg of material B without payment to seller BB, purchase price without
VAT 300, VAT rate 10%.
2. Issued 20 kg of material B purchased in transaction 1 and returned them to seller BB due
to poor quality goods.
3. Paid to the debt of BB seller by cash in bank.
4. Purchased 1.000 kg of material A paid by bank deposit, purchase price excluding VAT
800, VAT rate 10%. The cost of transporting materials to warehouse is paid in cash 13.200,
which includes 10% VAT.
5. Purchased 500 kg of material A without payment to seller AA, the purchase price does
not include VAT 820, VAT rate is 10%, the purchased material is on the way, not yet
delivered to the warehouse at the end of the period.
6. Paid off all debt to seller AA by cash in bank. It is known that due to early payment, the
company was entitled to a discount of 4.010.
7. Material B purchased on the way before this period has been fully stocked.
8. Issued material A to be used directly in the production of 1.000 kg of materials.
9. Issued 200kg material B to serve production.
10. Results of materials physical count are as follows:
- Excess of material A: 20.000
- Shortage of Material B: 2.500
Materials excess or shortage of unknown cause, 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 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 staff: 120.000.
- Salary payable to sales staff: 60.000.
- Salary payable to enterprise management staff: 144.000.
2.Appropriated Trade union fees, social insurance, health insurance, unemployment
insurance according to the prescribed regulation.
3. Paid salary deductions by bank transfer of 240.000.
4. Salary deduction for unused advance payment of 12.000, compensation payment of
5.000.
5. Paid salaries to employees (after deducting salary deductions) by bank transfer.
Requirements:
1. Journalizing those transactions.
2. Preparing T-account of 334, close at the end of the period.
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 fixed
assets at the company as follows (unit: 1.000 VND):
1. The company acquires an office building, expenditures incurred are as follows:
- Purchase price: 700.000
- Un-refundable tax and fees: 50.000
2. Disposal of a production machine, historical cost 400.000, fully depreciated. Liquidation
costs paid in cash 2.000, scrap value recovered and sold for cash 6.600, of which VAT 600.
3. Buy a store for 4.000.000, paid by bank transfer, of which the value of land use rights is
2.000.000, the value of works on land is 500.000.
4. The production department reports damage to a two-times allocated tool, the cost when
issued for use is 20.000, the recovered scrap value is 520, the value requires compensation
from the using department due to damage before the prescribed deadline. Set to 550.
5. Issuing 20.000 tools and supplies, allocated for 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 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 was 20.000. The estimated useful life of this car was 6 years.
4. Bought 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 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
+ Account 152: 60.000 (quantity 150 kg, unit price 600/kg)
1. Received materials of 450 kg, purchase price does not include VAT 750/kg, VAT rate
10%, on account.
2. Issued raw materials used directly to produce products with a quantity of 450 kg.
3. Issued one-time allocation of tools and instruments worth 30.000 to serve production at
the factory.
4. Depreciate fixed assets used in the production unit during the period 45.000.
5. Allocation of tool costs (issued from the previous period) 38.000 for production.
6. Purchase materials in quantity of 300 kg, unit price excluding 10% VAT was 500/kg,
paid by bank deposit. Materials were not received into warehouses but issued directly to
produce products.
7. Monthly salaries payable to direct production workers 150.000, factory management
staff 30.000.
8. Appropriated salary deductions at the prescribed rate.
9. Paid by bank transfer for electricity, water, and telephone used at the workshop was
33.000, of which VAT was 3.000.
10. Transfer and summarize production costs to calculate finish good cost, knowing that:
- The balance of work in process at the end of the period was 15,000.
- Completed of 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 has been paid by bank deposit,
the price excluding VAT is 8.500.000, VAT rate is 10%.
2. The cost of repairing fixed assets at the factory was paid in cash at 198.000.000,
including 10% VAT.
3. 4.000 kg of raw materials X purchased on account from supplier P, purchase price
excluding VAT is 119.500, VAT rate 5%. Shipping and unloading costs excluding VAT are
2.000.000, VAT rate 10%, paid in cash.
4. Issued 3.500 kg of raw materials X for direct use in the production of 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 staff of the production plant: 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 for direct use in the production of product B.
9. Rent a production plant for 24.000.000 excluding tax, 10% VAT, paid by bank deposit.
10. Issued tools and supplies (one-time allocation) worth 600.000 for use in the production.
11. Issued tools distributed in 24 periods, used for production, cost of tools issued for use
is 40.000.000.
12. Depreciation of fixed assets in the production: 14.800.000.
13. Scrap recovered during the production of product A is returned to the raw materials
warehouse worth 900.
14. Production results:
- Completed 100 products A and some unfinished products worth 80.200.000.
- Completed 80 products B and some unfinished products worth 130.000.000.
Requirements:
1. Calculate and 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 20.000.
Product B: 2.000 pieces, unit price 50.000.
2. Account 157: 9.750.000. Consignment details: 500 product A, unit price 19.500.
3. Other accounts are assumed to have reasonable balances.
B. In January/N, the company had the following economic transactions:
1. On January 2, received finished goods from production: product A: 3.000 pieces, unit
cost 22.000; Product B: 3.000 pieces, unit price 55.000.
2. On January 4, product A was sold to customer M, 2.000 pieces, unit price does not
include VAT was 50.000, customer M has not yet paid. Payment conditions stated in the
sales contract are 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% calculated on the total
payment amount.".
3. On January 5, product B was sold to customer N in quantity of 2.000 pieces, the selling
price does not include VAT of 100.000, and has not yet been collected.
4. On January 6, customer N complained that 100 products B (purchased in operation 3)
were of poor quality. After negotiation, the company agreed to reduce the price by 30% for
100 products B of poor quality and two. The party has completed the required
documentation procedures.
5. On January 10, the company received a credit note from the bank informing customer
M of payment: 108,350,000.
6. On January 12, 800 products A were sent to agent X to sell, the selling price excluding
VAT was 50,000.
7. On January 18, agent X announced that it had sold 600 products of product A and had
paid the company by bank deposit. The company spends cash to pay sales commission to
agents of 1.650.000, of which VAT is deducted 150.000.
8. On January 25, product B was sold to customer P in quantity of 3.000 pieces with a
selling price excluding VAT of 100.000, not yet collected.
9. The salary payable to sales, loading, unloading and packaging staff serving sales
activities arising in the month was 30.000.000, and enterprise management staff is
40.000.000.
10. Appropriated salary deductions at the prescribed rate.
11. Depreciation of fixed assets used in the sales department 12.000.000, in the business
management department 15.200.000.
12. Electricity and telephone bills used in the business management department incurred
during the month at a price excluding VAT of 6.000.000, VAT rate of 10% were paid in
cash.
14. The enterprise issued some packaging for sales purposes worth 3.000.000.
15. Expenses for posting product advertisements at a price excluding VAT 16.660.000, VAT
rate 10%, paid by bank transfer.
16. Corporate income tax expenses payable 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 (quantity 200 kg, unit price 500/kg)
Economic transactions related to raw materials arising during the period:
1. Purchased 600 kg of material A paid by bank deposit, purchase price excluding VAT 500,
VAT rate 10%. Shipping cost paid in cash is 13.200, of which VAT was 1.200.
2. Issued material A used directly to produce 500 kg product.
3. Purchased 700 kg of material A without payment to the seller, the purchase price included
VAT was 561, VAT rate 10%. The cost of transporting and loading materials to warehouse
was paid in cash 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, unit purchase price excluding VAT
520, VAT rate 10%.
Requirements:
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
Main raw materials 720.000 500.000
Auxiliary materials 60,000 48,000 20.000
Tools and supplies, one-time allocation (issue price) 112.000
Tools and supplies, two-time allocation (issue price) 80.000
Damaged tools and supplies, two-time allocation (issue price) 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 fixed assets 61.000
Other costs 10.000
1. The main material used to produce product A cannot be used up, so it is recalled and put
into warehouse worth 20.000.
2. Scrap recovered from the production of product B was 10.000.
3. At the end of the period:
- Finished goods: 1.000 products A and 2.000 products B.
- 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.