What account should be adopted in accounting practice to account for the expenses incurred from the renovation of enterprise offices? How should the relevant accounting entries be prepared?
What subject is decoration cost accounted for?
Simple decoration can be included in the current expenses, and the management expense decoration expense account is set for accounting.
The decoration with large expenses shall be included in the long-term deferred expenses, and the long-term deferred expenses decoration expenses account shall be set for accounting.
Accounting entry of decoration cost
1. Simple decoration:
Debit: management expense decoration expense
Credit: bank deposit
2. Large decoration expenses:
Debit: long-term deferred expenses decoration expenses
Credit: bank deposit
Long term unamortized expenses refer to various expenses that have been paid by the enterprise but have an amortization period of more than one year. Including fixed asset repair expenses, improvement expenses of leased fixed assets and other unamortized expenses with an amortization period of more than one year.
Basic principles for accounting of long-term deferred expenses:
The expenses incurred during the preparation period of the enterprise, except for the purchase and construction of fixed assets, shall be collected in the long-term deferred expenses first, and shall be included in the profits and losses of the current period when the enterprise starts production and operation.
The improvement expenditure of leased fixed assets shall be averagely amortized within the shorter of the lease term and the estimated useful life.
If the expenditure for overhaul of fixed assets adopts the deferred method, the actual overhaul expenditure shall be averagely amortized within the overhaul interval.
What is the decoration cost included in
1. Simple decoration can be included in the current expenses. Debit: management fee decoration fee. Credit: bank deposit.
2. Decoration with large expenses shall be included in long-term deferred expenses. Debit: long-term deferred expenses decoration expenses. Credit: bank deposit. Amortization by stages after completion. Debit: management fee decoration fee. Credit: long-term deferred expenses decoration expenses.
3. For the auxiliary decoration of new buildings, if the decoration cost is relatively large, it should belong to fixed assets. During the construction period, make an entry: Debit: construction in progress, Credit: bank deposit. When put into use, make entries: debit: fixed assets, credit: construction in progress.
What accounting subjects should be done for decoration expenses, and how to write accounting entries
The unit pays decoration fees in two ways:
The first situation is that the decoration is your own
The other is that the decoration is rented.
The decoration belongs to your company
Debit: construction in progress
Credit: bank deposit or cash
After completion settlement:
Debit: fixed assets
Credit: construction in progress
Decoration items are rented by others (decoration expenses are amortized monthly within the validity period of the lease contract.)
Debit: long-term deferred expenses decoration expenses
Credit: bank deposit or cash
Amortization:
Debit: management expense decoration expense
Credit: long-term deferred expenses decoration expenses
