Accounting entries for gratuitous donation of equipment
1, the donor
donation occurs:
borrow: non-operating expenses
credit: inventory
taxes payable - payable value-added tax (output tax)
2, the receiver
When accepting donated assets:
Borrow: Fixed Assets - ×× Fixed Assets
Loan: Non-Operating Income - Acceptance of Donation Income
What is Non-Operating Expenditure?
Out-of-business expenses are non-operating expenses other than the cost of the main business and other operating expenses. Such as fines, donations, extraordinary losses and so on. For this reason, to set up "non-operating expenses" account for this part of the accounting. Enterprises incur non-operating expenditures, the debit side of this account; the end of the carry-over of profit and loss, from the credit side to the "profit for the year" account debit, carry-over of the account has no balance.
What is non-operating income?
Non-operating income is a component of the financial results of enterprises, mainly refers to the daily business activities with the enterprise does not have a direct relationship with the profits. Non-operating income mainly includes: profit or loss on business combination, profit on inventory, creditors can't pay for the reason of payables, government grants, education surcharge rebate, fine income, donations and so on. In order to reflect and supervise the situation of non-operating income, enterprises should set up "non-operating income" account. The account credit registers the amount of non-operating income, debit registers the end of the period transferred to the "profit for the year" account, after the carry-over of the account at the end of the balance.