Cash discounts are financial expenses, which are included in financial expenses when they occur, which is common sense in accounting and bookkeeping. But executeWith the new revenue standard, cash discounts are treated as variable consideration, i.e., when revenue is recognized, a reasonable amount of cash discounts that may occur is assessed, and then deducted from sales as a liabilityWhen the cash discount is actually incurred, the liabilities are directly written off instead of the income, and they are no longer included in the "finance expense".。When the accounting is actually recorded, there are two accounting methods to evaluate the amount of cash discount that the customer may enjoy when recognizing the revenue from credit sales.
When a company sells on credit, it evaluates the amount of cash discount that may occur and records it according to the actual amount that it is estimated to receiveThis is called the "netting method".。On the contrary, the enterprise does not assess the possibility of cash discounts when selling on credit, and does not consider the occurrence of cash discounts when bookkeepingThe full amount that is not subject to cash discounts is called the "gross method".
01 The "gross method" is not used to evaluate cash discounts
Under the gross sales method, the cash discount that may occur is not considered when calculating the revenue from credit sales, and the amount of cash discount that the customer does not enjoy is included in the total revenue. When the customer pays in advance and enjoys the cash limit, the cash amount enjoyed by the customer will be included in the "finance expense". The accounting process is as follows:
1. Complete the sale on credit
Debit: Accounts receivable (total amount of invoices).
Credit: Income from main business (excluding cash discounts).
Tax Payable - VAT Payable - Output Tax.
2. Customers can enjoy cash discounts for early return
Debit: Bank deposit (actual amount received).
Finance costs (cash discount amount).
Credit: Accounts receivable (amount receivable).
Example 1:Company A sells a batch of A products on credit to Company B, with a total payment of 1 million yuan and a value-added tax of 130,000 yuan, and Company B needs to pay Company A within 3 months. The contract stipulates that if Company B repays the loan in advance, it can enjoy 5 15, 3 30, n 60. On the day of signing the contract, Company A and Company B completed the handover of the goods. On the 15th day of delivery of the goods, Company B paid Company A 1.08 million yuan according to the contract. Company A's credit sales are accounted for by the total amount method, and its accounting treatment is as follows:
1. On the day of credit sales
Debit: accounts receivable 1.13 million.
Credit: main business income of 1 million.
Tax payable - VAT payable - output tax 130,000.
2. Recover the payment
Borrow: bank deposit of 1.08 million.
Finance cost 50,000.
Credit: accounts receivable 1.13 million.
02 Evaluate cash discounts using the "net method".
netting", the customer will be assessed for cash discountThe recognition of the main business income shall be recorded after deducting the amount of cash discount that the customer may enjoy。Does this mean that the cash discount is no longer counted as a "finance charge". Apparently not. Because the amount of cash discounts that customers may enjoy cannot be accurately estimated, the amount of cash discounts enjoyed by customers is assessed and included in other business income when the payment is actually received; The amount of cash discount enjoyed by the customer is deassessed, and the cash discount is separately included in the "finance expense" accounting instead of transferring the cash discount that has already recognized revenue. The specific accounting entries are as follows:
1. Complete the credit business
Debit: Accounts receivable (estimated amount actually received).
Credit: Principal business income (the amount of cash discounts after the customer is assessed).
Tax Payable - VAT Payable - Output Tax.
Focus: If the receivable is a large transaction that is accounted for separately, the assessed cash discount amount is recorded as the account receivable with the greatest probability of receiving the cash discount. In the case of retail sales on credit, accounts receivable are recorded in proportion to the cash discount on the expected receivables. For example, in order to clear the inventory, shopping mall A sells product A on credit, and the customer will pay after using product A for 1 month. In order to encourage customers to return their money early, the merchant also promises a cash discount of 5 to 7. Based on past experience, it is estimated that 60% of customers will choose to use cash discounts. Suppose the sales amount of shopping mall A is 1 million. (excluding tax and not taking into account VAT), the revenue that should be recognized is:
The revenue that should be recognized in shopping mall A this time= 100-100 5% 60% = 970,000.
2. Recover the credit payment
Borrow: Bank deposit.
Credit: Accounts receivable.
3. Recover the credit money- Customers enjoy cash discounts more than withheld.
Borrow: Bank deposit.
Finance Expenses. Credit: Accounts receivable.
4. Recover the credit salesCustomers enjoy less cash discounts than withheld.
Borrow: Bank deposit.
Credit: Accounts receivable.
Other operating income – finance expense not recognized.
Example 2:Continuing from Case 1, Company A's business and cash discount are the same as those in Case 1. Company A's cash discount is calculated on a net basis, and it is estimated that Company B will enjoy the full amount of the cash discount. Company B actually paid within 30 days, and the corresponding cash discount of 30,000 yuan was enjoyed. Company A's accounting treatment is as follows:
1. On the day of credit sales
Debit: accounts receivable 1.08 million.
Credit: The main business income is 950,000 yuan.
Tax payable - VAT payable - output tax 130,000.
2. When the actual payment is received
Borrow: Bank deposit of 1.1 million.
Credit: accounts receivable 1.08 million.
Other business income - unrecognized financial expenses of $20,000.
Income tax linkWhen calculating enterprise income tax, the enterprise income tax shall be calculated according to the date of receipt agreed in the contract as the date of recognition of enterprise income for credit business.
*: Zhang Zhang said the entry.
Author: Zhang Zhangshuo entry.
*Editor: Mu Lin Financial News.