Amortized expenses are debited to register an increase and credited to register a decrease.
Enterprise production plant to be amortized expenses, refers to the current month, should be incurred by the current month and the following months of product costs *** with the burden of the cost. Mainly includes: amortization of low value consumables; prepaid insurance premiums; pending fixed asset repair costs; prepaid fixed asset rent, etc..
The amortization period of amortized expenses is up to one year; if the amortization period exceeds one year, it should be accounted for as long-term amortized expenses. Although the benefit period is more than one month, if the amount of the expense is not large, for example, prepaid sporadic newspaper subscriptions, it can also not be treated as an amortized expense, and is directly included in the production costs of the month in which the payment is made.
The payment of amortized expenses should be debited to "amortized expenses" and credited to "bank deposits".
When amortization, debit "manufacturing costs" and credit "amortized expenses".
Expanded Information:
Amortized expenses are expenses that have been incurred, but which should be borne by the current and future periods respectively. The costs, such as amortization of low-value consumables, a large amount of property insurance premiums, sewage charges, technology transfer fees, advertising costs, fixed assets regular repair costs, prepaid rent for fixed assets.
The start-up costs incurred during the preparation of the enterprise unit, and the amortization period of more than one year during the production and operation of the expenses should be treated as "long-term amortized expenses". Expenses that have been paid but cannot be recognized as current expenses, one of the current asset items.
According to China's accounting system, low-value consumables can also be included in amortized expenses. The conceptual basis of amortized expenses is the accrual basis and the requirement of the matching principle. The new Chinese accounting standards have abolished this account.
Reference:
Baidu Encyclopedia-Amortizable Expenses