Accounting entries for accounts receivable
Borrow: Accounts receivable
Loan: Revenue from main business
Taxes payable - VAT payable (output tax)
Borrow: Cost of main business
Loan: Inventory
In the collection of receivables cash discounts occur:
Borrow: bank deposits
Finance costs
Loan: accounts receivable
In the event of a sales discount or return:
Borrow: revenue from main business
Taxes and charges payable - payable value-added tax (sales tax)
Loan: accounts receivable
To transfer back the cost of:
Borrow: inventory goods
Loan: cost of main business
Do make provision for bad debts:
Borrow: credit impairment loss
Loan: provision for bad debts
At the time of bad debt loss:
Borrow: provision for bad debts
Loan: accounts receivable
Certain accounts receivable and recovered:
Borrow: Accounts Receivable
Loan: Provision for Bad Debts
Borrow: Bank Deposits
Loan: Accounts Receivable
What is Finance Charge?
Finance costs are the costs incurred by an enterprise to raise funds needed for production and operation, etc.. Specific items are: net loss on exchange (the difference between exchange losses less exchange gains), net interest expense (the difference between interest expense less interest income), financial institution fees and other costs incurred to raise funds for production and operation.
Enterprises incurred in the financial expenses debit "financial expenses" account, credit "bank deposits" and other subjects; enterprises incurred interest income, exchange gains debit. At the end of the month, the debit side of the collection of all financial expenses from the "financial expenses" account credit to "profit for the year" account debit, to the current profit and loss. After carrying forward the current service costs, "finance costs" account has no balance at the end of the period.