Vietnam’s regulations on closing a public sector accounting book

According to guidelines of Circular No. 107/2017/TT-BTC of the Ministry of Finance of Vietnam, regulations on closing an accounting book are specifically as follows:

1. Time for closing

A cash fund book must be closed at the end of each day. After closing the book, it must make reconciliation between the cash book of the accountant, the cashier's cashbook and the cash in the safe to ensure they are accurate and matched. On the last day of the month, a cash inventory statement must be drawn up. After the inventory, the cash inventory statement shall be kept together with the cash accounting book on the last day of the month.

A bank/treasury deposit book must be closed at the end of the month for reconciliation purpose; the reconciliation table (certified by the bank/treasury) shall be kept together with monthly bank/treasury deposit book.

The accounting unit must close the accounting book at the end of the fiscal year before financial statement is made.

In addition, the accounting unit must close the accounting book in case of stocktaking/making an inventory on an ad-hoc basis or in other cases as per the law.

2. Procedures for closing accounting books

* For manual bookkeeping:

Step 1: Make a check and reconciliation before closing accounting book

At the end of the accounting period, after accrual accounting vouchers during the period are all recorded to the accounting book, a reconciliation between figures in accounting vouchers (if necessary) and those in the book, or between books is required to ensure matching figures.  Total amounts accruing in the general ledger and detailed ledgers.

Make a grand table of accounts recorded in multiple books or multiple pages from detailed accounting books and cards.

Total accrual debits and accrual credits of accounts in the general ledger or journal-general ledger to ensure that the figures are matched and equal to accrual amount.

Then reconcile figures in general ledger and those in detailed ledger or grand table, between figures of accountant and those of cashier or storekeeper. The accounting book shall be closed when the matching figures are assured. If there is any difference, the reason shall be determined and the difference shall be reconciled until they are matched.

Step 2: Closing book

When closing book, draw a line under the last transaction line of the accounting period. Then write “total accrual amount in the month” below the said line;

Keep writing “closing balance” (month, quarter, and year);

Keep writing “total accrual amount from the previous months” from the beginning of the quarter;

Keep writing “total accrual amount from the beginning of the year";

“Closing balance” is calculated as follows:

After calculating the balance of each account, the account shall be written in the Debit column or Credit column, whichever is greater.

Finally, draw two straight lines to end the closing.

If a detailed accounting book contains accrual debit column, accrual credit column, and a “balance” column (or receipt, discharge, “balance” or revenue, expense, “balance”, etc.), the figures in the balance column shall be written in the line “Closing balance” off the “Balance” column.

After closing the accounting book, the bookkeeper must sign under the 2 lines, and then the chief accountant or person in charge will countersign after checking for accuracy and balance. And then refer it to the unit head for inspection and approval for legal status of figures.

* For computerized bookkeeping:

Process of closing an accounting book in accounting software must be built in such a manner that it satisfies rules for closing book applied to manual bookkeeping.

These are the contents specified in Article 5 of Circular No. 107/2017/TT-BTC of the Ministry of Finance of Vietnam, which was promulgated on October 10, 2017 and effective from November 24, 2017.

- Nguyen Trinh -

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