How to handle the accounting of out of price expenses
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What is the out of price expense?
The "out of price expenses" refer to the handling fees, subsidies, funds, fund raising fees, returned profits, incentive fees, liquidated damages (interest on deferred payment), packaging fees, package rent, reserve fees, quality fees, transportation handling fees, collection fees, advance payments and other out of price charges of various natures collected from the buyer. The out of price expenses are also one of the income of the enterprise, which shall pay value-added tax and additional tax according to the applicable tax rate of taxable income. At the same time, they shall be incorporated into the current income tax to pay enterprise income tax.
Accounting treatment of out of price expenses
1. Collection of handling fees and packing fees
Debit: corresponding account
Credit: other business income
Credit: tax payable - VAT payable (output tax)
2. When receiving subsidies
Debit: corresponding account
Credit: non operating income
Credit: tax payable - VAT payable (output tax)
3. When collecting liquidated damages
Debit: corresponding account
Credit: Non operating expenses
Credit: tax payable - VAT payable (output tax)
4. Return of interest, incentive fee, quality fee (price increase)
Debit: corresponding account
Credit: main business income
Credit: tax payable - VAT payable (output tax)
5. Interest on late payment
Debit: corresponding account
Credit: financial expenses
Credit: tax payable - VAT payable (output tax)
6. Packaging, transportation, loading and unloading and savings
Debit: corresponding account
Credit: main business cost
Credit: tax payable - VAT payable (output tax)
7. Collections (such as advertising fees)
Debit: corresponding account
Credit: other payables
Credit: tax payable - VAT payable (output tax)