How to make accounting entries for free gifts of purchased goods
In order to stimulate employees' enthusiasm for work or enhance their relationship with partners, enterprises usually choose the way of gift giving. What should they do with the accounting entries that are given free of charge for purchased goods?
Accounting entry of free gift of purchased goods
1. When purchasing:
Debit: goods in stock
Tax payable - VAT payable (input tax)
Credit: bank deposit
2. Free gift:
Debit: Non operating expenses
Credit: inventory goods
Tax payable - VAT payable (output tax)
What is the tax payable subject?
The enterprise shall comprehensively reflect the payment of various taxes through the "taxes payable" title, and conduct detailed accounting according to the taxes payable items. The credit of the account registers the taxes payable, the debit registers the taxes paid, and the ending credit balance reflects the taxes unpaid; If the ending balance is debit, it reflects the tax overpaid or not deducted.
What is the non operating expenditure account?
Enterprises usually set up the "non operating expenses" account to account for non operating expenses other than main business costs and other business expenses. When an enterprise incurs various non operating expenditures, it shall be debited into the account; When carrying forward the profit and loss at the end of the period, the debit transferred from the credit to the "Profit of the Current Year" account has no balance after carrying forward.
What is the inventory item account?
An enterprise should set up an "inventory goods" account to account for the increase or decrease of inventory goods and their balance. When goods are accepted and warehoused, the "production cost" account should be transferred to the "inventory goods" account; When selling inventory goods externally, corresponding accounting treatment shall be carried out according to different sales methods; Goods in stock received from construction in progress shall be transferred at their cost.