What is an Advance? What are the structure and content of Account 141 - Advances in Vietnam?

Note: Circular 200/2014/TT-BTC provides guidance on accounting applicable to enterprises in all fields and all economic sectors.

What is an advance?

According to the provisions at point b clause 1 Article 22 of Circular 200/2014/TT-BTC, an advance is a sum of money or materials provided by the enterprise to the advance receiver to perform an approved production, business task, or to solve a specific approved task.

The advance receiver must be an employee working at the enterprise. For regular advance receivers (belonging to the material supply, management, or administrative departments), they must be designated in writing by the Director.

What are the accounting principles for Account 141 - Advances in Vietnam?

The accounting principles for Account 141 - Advances are stipulated in clause 1 Article 22 of Circular 200/2014/TT-BTC. To be specific:

- This account is used to reflect the advances given by the enterprise to the employees and the settlement of these advances.

- An advance is a sum of money or materials provided by the enterprise to the advance receiver to perform an approved production, business task, or to solve a specific approved task. The advance receiver must be an employee working at the enterprise. For regular advance receivers (belonging to the material supply, management, or administrative departments), they must be designated in writing by the Director.

- The advance receiver (be it an individual or a collective) must be accountable to the enterprise for the amount received and only use the advance for the approved purpose and task content. If the advanced amount is unused or partially used, it must be returned to the fund. The advance receiver is not allowed to transfer the advance to another person for use.

+ Upon completion of the assigned task, the advance receiver must prepare an advance settlement sheet (accompanied by original documents) to settle entirely, conclusively (according to each instance, each amount) the received advance, used advance, and the difference between the received and used advance (if any).

+ The unused portion of the advance, if not returned to the fund, should be deducted from the advance receiver’s salary. If the expenses exceed the received advance, the enterprise will supplement the remaining amount.

- The advance from the previous period must be conclusively settled before receiving advances for the next period. The accountant must open detailed accounting records to track each advance receiver and fully record the receipt and settlement of advances for each instance.

What are regulations on the structure and content reflected in Account 141 - Advances in Vietnam?

The structure and content reflected in Account 141 - Advances are stipulated in clause 2 Article 22 of Circular 200/2014/TT-BTC. To be specific:

Debit side:

Amounts of money, materials advanced to the enterprise's employees.

Credit side:

- Advances that have been settled;

- The amount of unused advance returned to the fund or deducted from the salary;

- Materials unused and returned to the warehouse.

Debit balance:

Advances not yet settled.

What are the structure and content of Account 141 - Advances in Vietnam? (Image from the Internet)

How is the accounting method for some major economic transactions related to Account 141 - Advances in Vietnam?

The accounting method for some major economic transactions related to Account 141 - Advances is stipulated in clause 3 Article 22 of Circular 200/2014/TT-BTC. To be specific:

(1) When advancing money or materials to the employees of the enterprise, record:

Debit TK 141 - Advances

Credit TKs 111, 112, 152,...

(2) Upon completion of the assigned task, the advance receiver prepares an advance settlement sheet accompanied by approved original documents to settle the advance, record:

Debit TKs 152, 153, 156, 241, 331, 621, 623, 627, 642, ...

Credit TK 141 - Advances.

(3) Unused advance amounts must be returned to the fund, returned to the warehouse, or deducted from the advance receiver’s salary, record:

Debit TK 111 - Cash

Debit TK 152 - Raw materials, materials

Debit TK 334 - Payable to employees

Credit TK 141 - Advances.

(4) If the actual expenditure approved exceeds the advance amount received, an expense receipt is prepared to reimburse the advance receiver, record:

Debit TKs 152, 153, 156, 241, 621, 622, 627,...

Credit TK 111 - Cash.