Accounting entries for accounts receivable
Borrow: accounts receivable
Loan: income from main business
Taxes payable-VAT payable (output tax)
Borrow: cost of main business
Loan: inventory
Collection of accounts receivable
Borrow: Bank deposits
Loan: Accounts receivable
What are accounts receivable?
Accounts receivable refers to the amount of money that should be collected from the purchasing unit due to the provision of labor services, sales of goods, products and other business in the normal course of business, including the tax payable by the receiving unit or the purchasing unit, various transportation and miscellaneous charges advanced on behalf of the purchaser.
Accounts receivable is a claim that occurs along with the sales behavior of the enterprise and then formed. Therefore, the recognition of accounts receivable is closely related to the recognition of revenue. Accounts receivable are usually recognized at the same time as revenue. The account is set up according to the different units of receiving services or purchasing goods to set up a detailed account so as to carry out detailed accounting.
Accounts receivable credits the collection of accounts receivable and recognized bad debt loss (i.e., the amount of reduction); the closing balance in the debit side, that is, the enterprise has not yet collected accounts receivable; if the balance in the credit side, that is, the enterprise receives the money in advance.
What is cost of principal operations?
Costs of principal operations are the costs incurred by a business for operating activities such as selling goods and providing services. Enterprises generally transfer the cost of goods sold and labor provided to the cost of main business when they recognize revenue from main business activities such as selling goods and providing labor services, or at the end of the month.
Cost of main business belongs to the profit and loss account, the debit side indicates an increase in the cost of main business, and the credit side indicates a decrease in the cost of main business. Enterprises should calculate the main operating costs to be carried forward based on the actual costs of various goods sold and labor provided during the month.