1

Financial Accounting
Prof. Adriana Tiron Tudor - course
Lect. Szilveszter Fekete - practice
att
Agenda course 08-09
1. Objectives
2. Liabilities definition and classification
3. Commercial liabilities
4. Salaries
5. VAT, taxes, others
2
Explain a current liability and identify the major
types of current liabilities.
Describe the accounting for notes payable.
Explain the accounting for other current liabilities.
Identify the types of bonds.
1. Objectives
After studying this chapter, you will be able to:
Identify the requirements for the financial
statement presentation and analysis of
liabilities.
1. Objectives
That their weight in the balance sheet varies
according to the firms activity
3
Liabilities are..
Creditors claims on total assets
Existing debts and obligations
Liabilities must be settled in the
future by transfer of assets or
services.
Current Liabilities
Can reasonably be expected to paid
From existing current assets or through
the creation of other current liabilities.
Within 1 year or the operating cycle,
whichever is longer.
Debts that do not meet both
criteria are Long-Term Liabilities.
4
The liabilities represent the financing
resources of the economic goods.
The liabilities are financial resources
obtained from the owners and the third
parties or resources created by the
enterprise from the developed activity
(through auto-financing).
The classification of the patrimonial
liabilities is made depending on two
criteria:
The constitution manner (nature and
provenience);
Their due date (the reimbursement period
under or over a year)
5
Types of Current Liabilities
Notes Payable
Accounts Payable
Unearned revenue
Accrued Liabilities
Taxes
Salaries and Wages
Interest
Types of Current Liabilities
6
Types of Current Liabilities
Notes Payable are...
Obligations in the form of written notes.
Often used instead of accounts payable - they
give written documentation if needed for legal
remedies.
Used for short-term and long-term financing
needs.
7
Sales Taxes Payable...
Are collected from
customers.
Are expressed as a % of
sales price.
Are required by law.
Must be sent to state often.
Are often rung separately
from sales on the cash
register.
Journal
Mar 25 Cash 12,400
Sales 10,000
Sales Taxes Payable (VAT) 2,400
(To record daily sales and
sales taxes)
8
Sales Taxes...
When sales taxes are not rung up
separately, total receipts are divided by
100% plus the sales taxes percentage.
Total Receipts
100% + 24%
12,400 = $10,000 Sales
1.24
Sales Taxes...
$10,000 x 2.4 = $ 2.400 VAT
Mar 25 Cash 12,400
Sales 10,000
VAT 2.400
(To record daily sales and VAT)
Journal
9
VATs accounting
Concept VAT is an indirect tax owed to the state budget.
Area of appliance In VATs area of appliance are comprised operation which
cumulatively fulfill the next conditions:
Are a goods delivery or services providence with payment;
The place of goods delivery or service providence is considered to be in
Romania;
The delivery of goods and the service providence is realized by a taxable
person;
The delivery of goods and the service providence must result from an
economic activity
VATs accounting
Taxable systems
The taxable operation between the appliance area of the VAT are classified
from the taxable point of view as follows:
A. Taxable operations for which the standard (or reduced) quota is applied;
B. Exempted operations with reimbursement right, for which VAT is not
owed, but is the reimbursement of the owed or paid VAT, for bought
goods and services is allowed.
C. Exempted operations without reimbursement right, for which VAT is not
owed, and the reimbursement of owed or paid VAT for bought goods and
services it is not allowed .
10
VATs accounting
The organizing of the operative evidence of VAT, means making the
next documents:
VATs registration declaration / other peoples mention declaration
Buying journal
Selling journal
Selling register (incomings)
Register containing the assimilated operations of the delivery of goods and
services
VAT reimbursement
Reimbursement demand
Compensation demand
VATs accounting
The synthetic accounting of VAT in realized with the account 442 VAT,
detailed on the next 2
nd
degree accounts:
4423 VAT payable;
4424 VAT receivable ;
4426 Input VAT;
4427 Output VAT;
4428 non-chargeable VAT
11
VATs accounting
The accounting and fiscal mechanism of VAT assumes
Recording the output VAT sat on the domestic sales (exclusive
intracommunitary deliveries and exports ):
=account 4427 output VAT (P)=
The standard accounting formula:
Receivables (usually)= % X
41x Customer and similar accounts
Or
462 Sundry creditors Incomes(usually) X1
70x Net turnover
75x Other operative incomes
4427 Output VAT x2
VATs accounting
The accounting and fiscal mechanism of VAT assumes
Recording the input VAT sat on buying (including intracommunitary
acquisition and imports ):
=account 4426 input VAT(A)=
The standard accounting formula:
% =debts (usually) X
40x suppliers and similar accounts
or
461 Sundry debtors
Buyings (usually) X1
2xx Assets
3xx Inventories
6xx Expenses
4426 Input VAT X2
12
VATs accounting
Registering the VAT collectible at reimbursement which can be concretized in :
Net fiscal debt from VAT, if : Rc4427>Rd4426
account 4423 VAT payable (P)
The standard accounting formula :
4427 = % Rc4427
4426 Rd4426
4423 Rc4427-Rd4426
In the net fiscal receivable from VAT, if : Rc4427<Rd4426
account 4424 VAT receivable(A)
Standard accounting formula:
% = 4426 Rd4426
4427 Rc4427
4424 Rd4426-Rc4427
VATs accounting
Example: An VAT payable entity buys from Romania raw materials,
value 20.000 lei plus VAT 24%. During the month finished products are
delivered at selling price of 30.000 lei, plus VAT. The registration price of
sold products is 23.000 lei. At the end of the month the VAT
regularization is being done, taking into consideration that the entity has
payable VAT from the previous month, unpaid in the legal term, of 2.100.
Later on, the whole dept is regarding the VAT, including affiliated interest,
is paid.
Solution :
1) Registering the raw materials acquisition:
% = 401 suppliers 23.800
301raw materials 20.000
4426input VAT 4.800
2) Registering the delivery of finished goods:
4111 customers= % 35.700
701sales of finished products 30.000
4427 output VAT 7.200
13
VATs accounting
3) Registering the evidence discharge:
711 variation in inventory=345 finished products 23.000
4) Registering the VAT regularization at the end of the month:
4427output VAT= % 7.200
4426 input VAT 4.800
4423 VAT payable 2.400
5)Registering the payment of the owed VAT through order bill:
4423 VAT payable = 5121 cash at bank 3.500
6)Registering the expenses with affiliated delay increases:
(computing the increase: 2.100 x 0.1%/day x 30days = 63 lei )
6581compensations ,fines and penalties=4481other debts payable to the
treasury 63
7)Registering the affiliated delay increases payment with order bill through
bank
4481 other debts payable to the treasury=5121cash at bank 63
Regularization of the VAT
Output VAT > input VAT => payable VAT
Output VAT< input VAT => receiv VAT
14
A. At the end of the period output VAT is
8.000, input VAT is 2.000.
B. At the end of the period output VAT is
5.000, input VAT is 6.000
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding
Accounts
SUMS
D C
A Regularization of
the VAT
4427 = %
Output VAT 4426 Input VAT
4423 VAT payable
8.000
2.000
6.000
B Regularization of
the VAT
% = 4426 Input VAT
4427Output VAT
4424 VAT receivable
5.000
1.000
6.000
15
transaction Supplier acc. Client acc.
Commercial
1.goods,service transfer
2.payment in a short per.
411 A 401,404 P
Credit
1.goods,service transfer
2.bills of exchange
3.payment after a per.
411 A
413 A
401 P
403,405 P
Advance
1. payment
2. goods,service transfer
419 P 409 A
232,234 A
Without invoice 418,4428 408,4428
7. An advance payment from the customers is collected in sum of 500 lei.
8. An advance is paid to the row materials supplier, in sum of 500 lei, from
the bank account.
9. An advance payment is acquitted to a truck supplier from the bank
account, in sum of 3.000 lei.
10. The truck producer collect an advance from a client 3.000 lei
7 1 Advance payment
collected
5121 = 419
Cash at bank in lei Advance
payments
500 500
8 1 Advance payment
acquitted
4091 = 5121
Suppliers - debtors Cash at bank in lei
500 500
9 1 Advance payment
acquitted
232 = 5121 3.000 3.000
10 1 Advance payment
collected
5121= 419 3.000 3.000
16
Salaries and social reimbursements
The accounting of salary and social
reimbursements
The employer payment obligations to the insurance and social security
organisms are composed by:
1. The employers own contributions;
2. The employees contributions, retained from their salary rights through
deductions at source, in the base of a legal letter of attorney
The reimbursement (payment) by the employer of his own contribuitons and
retained by deduction at source, the beneficiary insurance and social
security organisms
Documents regarding the salaries evidence
Documents related to the attendance an work and the volume of work
done
Documents related to the production obtained
Documents related to salaries setting
Documents regarding the employees nominal evidence, their salaries
and the taxes
17
Current accounting of social
reimbursements
The operative evidence and the analytic accounting of salaries reimbursement are being
realized with the help of the pay sheets in which the computing elements of the salary
rights and their reimbursement are systemized as follows:
A. Base gross salary
(+A1) Payroll increases
(+A2) Running allowances
(+A3) Wages indexation (for prices increases)
(+A4) Wages in kind
(+A5) Other salary rights
B. (=) Total gross salary rights
(-B1) Personnel contribution to social security insurances;
(-B2) Employees contribution for health social insurances ;
(-B3) Personnel contribution to unemployment fund;
(-B4) Salary tax
(-B5) Deductions in favor of third parties;
(-B6) Deductions in favor of the entity;
(-B7) Advances for the employees
C. (=) Total payment of net salary rights
Current accounting of social
reimbursements
NOTE:
B Computing formula for salary tax is : B-B1-B2-B2
n (-Dp) Personal deduction
n (-Cs) Union contribution
n (-Cf) Contribution to private pension without the overdraft of the equivalent
in ron of 200 euro
v (=) Total taxable salary rights (taxable income)
18
Salaries
Employers expenses 6 = 4
Payroll deductions 4= 4
Taxes payment 4= 5
net salary payment 4 = 5
The synthetic accounting of the
reimbursement with the employees
Used accounts:
Group 42 Payroll and similar accounts. This group includes the next 1
st
degree accounts:
421 Employees-salaries payable;
423 Other social benefits granted to employees;
424 Profit share payable to employees;
425 Advances to employees;
426 Employee rights not paid;
427 Retentions from salaries payable to third parties;
428 Other employee related debts and receivables ;
19
The synthetic accounting of social
reimbursements
Is being registered in the accounts:
- 431 Social security which is elaborated on the next 2
nd
degree accounts:
4311 Company contribution to social security
4312 Employee contribution to social security
4313 Company contribution to health insurance
4314 Employee contribution to health insurance
-437 Unemployment fund which is elaborated on the next 2
nd
degree
accounts:
4371 Company contribution to unemployment fund
4372 Employee contribution to unemployment fund
- 438 Other employee related social debts and receivables which is
elaborated on the next 2
nd
degree accounts:
4381 Other employee related social debts
4382 Other employee related social receivables
- 444 Tax on salaries
Accounting registering of the salary
reimbursements
The employees contribution at the insurance and social security organisms are being
composed by, mainly from:
CAS The entitys contribution to social insurances;
CASS The employers contribution to health social insurances;
CFS The entitys contribution to unemployment fund;
The bookkeeping of the employers contribution to insurance and social security
organisms implies:
1. The recording of pay obligations:
6451 = 4311 (CAS)
6453 = 4313 (CASS)
6452 = 4371 (CFS)
2. Contributions paid through bank tranfer:
% = 5121
4311 ( CAS )
4313 ( CASS )
4371 ( CFS )
20
Payroll Deductions
Payroll Taxes...
Amount required by law to be withheld from
employees gross pay.
Social Security taxes withheld
income taxes

21
Accounting registering of the salary
reimbursements
1. Granting of salary incomes through bank tranfer:
425=5121 (B7)
2. Registering the gross salary rights:
641=421 (B)
3. Registering of salary retainings:
421= %
4312 (B1)
4314 (B2)
4372 (B3)
444 (B4)
427 (B5)
4282 (B6)
425 (B7)
Accounting registering of the salary
reimbursements
4. Payment of net salary right:
421=5121 (C)
5. Payment of the deductions from the salary rights through bank transfer:
% = 5121
4312 (B1)
4314 (B2)
4372 (B3)
444 (B4)
427 (B5)
NOTE:
If, with the reimbursement of the net salary rights there are non-reimbursed
sums, this are being recorded in a separate evidence, with the formula:
421=426
% = 5121
4312 (B1)
4314 (B2)
4372 (B3)
444 (B4)
427 (B5)
22
Salaries
1.The expenses of the employer with
employees are:
Comp Contrib Social Sec 5.800 lei,
Comp Contrib HI 1.400 lei,
CCUF 400 lei,
commission TWI 150 lei,
fund for guarantee of the salary 50 lei,
other funds 200 lei
Brut Salary 20.000
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding
Accounts
SUMS
D C
1 1 CCSS registration 6451 = 4311
Expenses with Company contribution
5800 5800
2 CCHI registration 6453 = 4313
Expenses with Company contribution
1400 1400
3 CCUF registration 6452 = 4371
Expenses with Company contribution
400 400
4 Commission TWI
registration
622 = 462
Commissions Sundry creditors
150 150
5 Fund for guarantee
registration
6458 = 4381
Expenses with other Other employee.
social security...
50 50
6 Other funds
registration
635 = 447
Other taxes, Special funds taxes...
Charges and similar expenses
200 200
23
Brut salary 641= 421 20.000
Journal
2.The sum of 3.000 lei is withdrawn from the bank and
advance payments are made to the employees.
3. The salaries for the current month are recorded, sum
20.000 lei, ECSS 1.900 lei, ECHI 1.300 lei, contribution to
unemployment fund 200 lei, ratios and rents for the
third parties 910 lei, salary tax 3.500 lei, receivables
over the employees 1.190 lei.
24
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding
Accounts
SUMS
D C
2 1 Cash withdrawn
from the bank
5311 = 5121
Petty cash in lei Cash at bank in
lei
3000 3000
2 Advance payment
to the employees
425 = 5311
Advance to Petty cash in lei
employees
3000 3000
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding
Accounts
SUMS
D C
3 1 Registration of payroll 641 = 421
Salary expenses Employees - salaries...
20000 20000
2 Registration of
salaries contributions
421 = %
Employees - sal. 425 Advance to empl.
4312 Employee contrib.
4314 Employee contrib.
4372 Employee contrib.
444 Tax on salaries
427 Retention from sal.
4282 Other employee...
12.000
3000
1900
1300
200
3500
910
1190
25
4. The necessary sum is withdrawn from the bank
and the second part of the salaries is paid to the
employees, except the sum of 500 lei for the
personnel who is not in the entity.
5. The uncollected salaries are deposited to the
bank.
:
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding Accounts SUMS
D C
4 1 Cash withdrawn
from the bank
5311 = 5121
Petty cash in lei Cash at bank in lei
8000 8000
2 Salaries
payment
421 = %
Employees - sal.... 5311 Petty cash in lei
426 Employee rights..
8000
7500
500
5 1 Cash deposit at
bank
5121 = 5311
Cash at bank in lei Petty cash in lei
500 500
26
6.Payments for illness support are recorded in the
sum of 100 lei, 60% paid by the entity, 40% by the
health insurance, from which 20 lei are retained for
rents and ratios.
7. Material illness supports are paid, uncollected
salaries 400 lei and the rest are recorded as
incomes.
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding
Accounts
SUMS
D C
6 1 Payments for
illness registration
% = 423 Other social benefits
6458 Expenses with other.
4311 Company contribution to social sec.
60
40
100
2 Rent, rations and
tax on salaries
registration
423 = %
Other social ben... 444 Tax on salaries
427 Retentions from...
36
16
20
7 1 The payment of
material illness
supports
% = 5311 Petty cash in lei
423 Other social benefits...
426 Employee rights...
64
400
464
2 Income form
salaries
426 = 7588
Employee rights.. Other operating
incomes
100 100
27
8. The retaining from the salaries and the companys
contributions related to the granted salaries, as well
as other similar obligations are transferred on
destinations.
GENERAL JOURNAL
No
Ec
Op
No
acc
op
Explanation Corresponding
Accounts
SUMS
D C
8 1 Payment of
contributions to the
budget
% = 5121 Cash at bank in
lei
427
4311
4312
4313
4314
4372
444
447
462
4371
4381
930
5760
1900
1400
1300
200
3516
200
150
400
50
15.806
28
Unearned Revenues...
Cash received before revenues are
earned and recorded as liabilities until
they are earned.
Unearned Revenues...
Rent received in advance
Customer deposits for future service
Sale of airline tickets for future travel
Sale to season sporting events
29
Journal
Aug 6 Cash 500,000
Unearned Ticket Revenue 500,000
(To record sale of 10,000 tickets)
Sept 7 Unearned Ticket Revenue 100,000
Ticket Revenue 100,000
(To record ticket revenue earned)
Receivables and liabilities in
foreign currency
Transaction must be expressed in the
entitys reporting currency.
Exchange rate, is the rate for exchanging two
currencies.
Exchange difference, the difference from
reporting a foreign currency in the reporting
currency at different exchange rates.
Closing rate is the spot exchange rate at
the reporting date
30
Initial recognition
A foreign currency transaction is a transactions
denominated in or requiring settlement in a foreign
currency.
Recording on initial recognition of a
foreign currency transaction.
Apply the exchange rate in operation
at the date of the transaction
Reporting at subsequent reporting dates.
At each reporting date,
monetary items should be reported using the
closing rate.
non monetary items carried at historical cost
should be reported using the exchange rate at
the date of the transaction.
non monetary items carried at fair value
use the exchange rate that existed when
the values were determined.
31
Recognition of exchange differences
Recognised as revenue or expenses in
the period in which they arise.
Case study
1.01.01.N Beginning bank account 1.000 Eur 3,5
2.01.02.N Invoice from a service supplier 100 Eur 3,4
3.10.02.N Invoice payment 100 Eur 3,5
4.12.06.N Invoice from a tangible asset supplier500 Eur 3,6
5.15.07.N Invoice payment 200 Eur 3,4
6.20.09.N Service invoice issued to a EU client 100 Eur 3,4
7.31.12.N Eur 3,3 disp.700, liab.300, receiv. 100
8. 01.03.N+1 Invoice payment 300 Eur 3,7
32
1.Beginning bank account 1.000 Eur 3,5 (5124) 3.500
2.Invoice from a service supplier 100 Eur 3,4 628 = 401 340
3.Invoice payment 100 Eur 3,5 % = 5124 350
401 340
665 10
4.Invoice from a tangible asset supplier 500 Eur 3,6 213 = 404 1.800
5.Invoice payment 200 Eur 3,4 404 = % 720
5124 680
765 40
6. Service invoice issued to a EU client 100 Eur 3,4 411 = 704 340
7. At 31.12.N Eur 3,3 disp.700, 665 = 5124 160
liab.300 404 = 765 90
receiv. 100 411 = 756 10
8. Invoice payment 300 Eur 3,7 % = 5124 1110
404 990
665 120
State budget reimbursement
33
The accounting of the state budget
reimbursement
The accounting structure of the state budget reimbursement
Profit/Income tax;
VAT;
Payroll tax;
Subsidies;
Other taxes and payments;
Special funds taxes and payments;
Other debts and receivables to the state budget;
The current accounting its assured with the accounts from group 44 Accounts
payable to the budget, special funds and similar accounts
The accounting of the profit/income
tax
Content: Profit tax its directly applied on the beneficiary obtained from a
economic activity;
The profit tax payers are:
Romanian artificial persons;
Foreign artificial persons who perform activities through a permanent
establishment in Romania;
Foreign artificial persons and non-resident natural persons who perform
some activity in Romania through an association without artificial
personality;
Foreign artificial persons who realize incomes from/or in connection with
immovable properties from Romania or from selling/transferring equity
security kept a Romanian artificial person.
Resident natural persons associated with Romanian artificial persons in
order to realize incomes both in Romania and other countries from without
artificial personality associations
34
The accounting of the profit/income
tax
The computation and determination of the profit tax is being done by
following the next steps:
a)Determining the accounting result, cumulated from the beginning of the
year(RCC) as follows:
RCC= total cumulated incomes-total cumulated expenses
b) Computing the taxable result, cumulated from the beginning of the year
(RIC) as follows:
RIC=RCC + non-deductible fiscal expenses non-taxable incomes
fiscal losses from previous years
c) Determining the owed profit tax, cumulated from the beginning of the year,
until the ending of the quarter for which the computation is being done
(IPC):
IPC=RIC x profit tax rate
d) Determining the profit tax for the quarter for which the computation is being
done (IPT):
IPT = IPC the cumulated profit tax owed at the end of the previous
quarter
The accounting of the profit/income
tax
Income tax for micro-enterprises
Content: Income tax (Iv) is an optional tax for micro-enterprises- the
Romanian artificial persons which, at 31 December the previous fiscal year,
fulfilled together the following conditions:
Realized incomes, without the consulting and management ones, in a
bigger proportion than 50% from the total incomes;
Have from 1 to 9 inclusive employees;
Realized incomes smaller than the lei equivalent of 100.000 euro;
The social capital is fully kept by natural persons, and/or artificial of private
right
The equation for computing the income tax is :
Iv = Turnover x 2%
35
The accounting of the profit/income
tax
The reimbursements regarding the income/profit tax are reflected in the
account:
o 441 Profit/Income tax, which is analytically developed in 2 accounts:
Account 4411 Profit tax;
Account 4418 Income tax
The accounting of the profit/income
tax
Example :In the first quarter of the 200 N financial year, where recorded in the
accounting the following incomes and expenses:
Raw materials expenses : 1.000 lei
Auxiliary materials expenses: 1.200 lei
Consumables expenses: 1.500 lei
Goods expenses: 20.000 lei
Advertising expenses (on written contract): 500 lei
Sponsorship expenses: 50 lei
Delay penalties expenses: 80 lei
Incomes from goods selling: 60.000 lei
Incomes from other activities: 15.000 lei
Incomes from equity security: 400 lei
Fiscal loss from the previous year: 287.54 lei
36
The accounting of the profit/income
tax
Determining the taxable result:
Taxable result=accounting result + fiscal non-deductible expenses non-
taxable incomes
Accounting result= total incomes-total expenses = 75.400-24.330=51.070
lei
Fiscal non-deductible expenses=50+80=130 lei
Non-taxable incomes=400+287.54= 687.54 lei
Computing the profit tax owed for 1
st
quarter: 50.512,46 lei x
16%=8.081,99 lei ~ 8.082 lei
Solution:
1) Registering the profit tax owed for the 1
st
quarter:
691Profit tax expenses=4411Profit tax 8.082
2) Registering the payment of the owed profit tax (until 24 April 200N)with
cash order:
4411Profit tax=5121cash at bank 8.082
The accounting of the profit/income
tax
Example: A micro-enterprise registered in the 1
st
quarter of year N, the next
incomes:
- Incomes from selling finished products: 20.000 lei
- Incomes from producing tangible assets: 300 lei
- Other exploitation incomes: 4.000 lei
- Interest incomes: 600 lei
Determine and register the income tax for this enterprise.
Solution:
1) Determining and registering the income tax
(20.000+4.000+600)x2%=492 lei
698 income tax and other taxes not included above=4418 income tax 492
37
The accounting of other taxes and
payments
The main taxes included in this category are: excise tax, custom taxes,
gasoline tax and natural gases from internal production, dividend tax, local
taxes and other taxes.
The synthetic accounting of debts and other taxes and payments is being
realized through account 446 other taxes, charges and similar liabilities
Example : Firm X registers in its own accounting the building tax of 1.800 lei
635 other taxes, charges and = 446.01 other taxes, charges and similar 1.800
similar expenses liabilities
-analytic building tax
The contribution to special funds
accounting
The patrimonial entities owes to some public organisms sums especially
made with certain destinations provided by the law, which are recognized
under the name of special funds, and this are:
1) Public health special fund;
2) Public roads special fund;
3) Promotion and tourism modernization special funds;
4) Environment fund;
5) Other special funds as:
- Granting fund for salary receivables payment;
- National cultural fund;
- Energetic system developing fund, etc.
38
The contribution to special funds
accounting
Specials funds synthetic accounting is realized through account 447special
fund taxes and similar liabilities
Example: Is recorded in accounting the entitys debt regarding the public health
fund of 1.100 lei, which is being paid later on through bank transfer.
Solution:
1)Registering the debt regarding the public health fund:
635Other taxes, charges and=447 special fund taxes and 1.100
similar expenses similar liabilities
2) Registering the debt payment with order bill through bank transfer
447 special fund taxes and = 5121 cash at bank 1.100
similar liabilities
The accounting of subsidy
receivables
Content: Subsidies, as a reimbursement relation, are receivables (receiving
sums) adjudicated by the economic entities to the government ,the
governmental agencies or other similar national and international
institutions.
The current accounting of subsidy receivables
445 Subsidies
4451 Government subsidies
4452 Irredeemable loans as subsidies
4458 Other amounts received as subsidies
Whole or/and partial financing of some categories (elements) of current
exploitation expenses
Registering the receivable regarding the subsidy 445x=741x
Encashing the subsidy (through bank) 5121=445x
39
The accounting of subsidy
receivables
The whole and/or partial financing of non-current assets
Subsidy adjudication:
445x=13x
Encashing the subsidy (through bank)
5121=445x
The transfer of subsidies share at the end of the period, while using the asset:
13x=7584
Reimbursement accounting inside the
group and with shareholders/associates
The accounting structure of the reimbursements within the group and
with the shareholders looks for:
A. Reimbursements between:
A.1. Affiliated entities;
A.2. Entities between whom there are attendance interests;
B. Reimbursements between the entity and the shareholders regarding:
B.1. Owed sums to shareholders;
B.2. Reimbursements regarding the capital and the payable dividends
C. The current accounting is assured with the accounts from group
45 Group and shareholders
40
Reimbursement accounting inside the group
and with shareholders/associates
A. The reimbursements accounting between group entities
Concerns especially the granting and retaining of financial helps (with or
without moderate interest) between the affiliated entities and/or between
those who have attendance interests
The accounts (451x and 453x) will have the accounting function:
o of asset at the entity as a creditor
o of liability at the entity as a debtor
Reimbursement accounting inside the
group and with shareholders/associates
Commercial entity X gives , through bank transfer a financial help of
5.000.000 lei to entity Y. At the end of the financial period, the interest
computed, but not yet reimbursed from the expirable financial period are of
30.000 lei.
In the next financial period the interest are being reimbursed and 200.000 lei
from the financial help gave are refunded.
In Xs accounting In Ys accounting
In the financial year N In the financial year N
1.Giving the financial help
4511 = 5121 500.000
1.Receiving the financial help
5121 = 4511 500.000
2.Registering the encashing interests
4518 = 766 30.000
2.Registering the paying interests
666 = 4518 30.000
In the financial year N+1 In the financial year N+1
3.Partial encashing of the financial help
and the interests:
5121 = % 230.000
4511 200.000
4518 30.000
3.Partial payment of the financial help and
the interests:
% =5121 230.000
4511 200.000
4518 30.000
41
The accounting of the reimbursements
within the shareholders
B. The accounting of the reimbursements between the entity and shareholders
Mainly endorses:
B1. Private corporations (SNC and SCS) or joint ventures (SRL), in which
frequently appears liquidities insufficiency temporary covered by the
shareholders (with or without modicum interest).
Used accounts : 455x- with liability accounting function
The accounting of the reimbursements
within the shareholders
A limited liability company encashes from his unique associate 50.000 lei for
current finances .At the end of the financial period are computed and
recorded interest of 5.000 lei. In the next financial period are acquitted in
cash the associates interests, together with his withdrawn of 25.000 lei.
In the financial year N
1.Encashing the sum deposited by the unique associate in cash:
5311 = 4551 50.000
2.Registrating the unique associate interests:
666 = 4558 5.000
3.Closing the income and expenses account regarding the interests:
121 = 666 5.000
In the financial year N+1
1.The payment in cash of the interests and the sums withdrawn from the unique
associate
% = 5311 30.000
4551 25.000
4558 5000
42
The accounting of the reimbursements
within the shareholders
B2. The reimbursements with the shareholders regarding the capital and
dividends will be presented and exemplified in the chapter Assets
Accounting
Reimbursement accounting inside the
group and with share holder/associates
C. Reimbursement from shareholding operations
accounting
Endorses associations in participation, without artificial
personality, within they appear, usually, next
reimbursement relations categories:
1. Collections and refunds of sums endorsing the
incorporation liquidation of floating asset's necessary
for shareholding operations development.
2. Income and expenses transfers between co-
participants to realize shareholding operation and
sums representing gross financial result between co-
participants :
Accounts used: 458x
43
Reimbursement accounting inside the
group and with shareholders/associates
Between company X, with active role, and Y, passive role, shareholding
operations accounting, are unrolled the next reimbursements:
a) Y company contribution, pulled out for X company, at
associations floating asset, summing 200.000 ron;
b) Incomes from association operations, from which, according to
the association contract, 60% X Co, and Y Co:
Goods selling incomes100.000 ron
Various activities incomes....10.000 ron
c) Association operations expenses, from which, according to the
association contract, 50% to X Co, and 50% to Y Co:
Water and electricity expenses..1.000 ron
Gods expenses...60.000 ron
Personnel remunerations expenses10.000 ron
Social insurance contribution expenses2.333 ron
Unemployment assistance contribution expenses500 ron
Postal and telecommunications expenses...4000 ron
Other exploiting expenses...2167 ron
Reimbursement accounting inside the
group and with share holder/associates
In X company accounting In Y company accounting
Associations floating asset collection:
5121 = 4581 200.000
Associations floating asset payment:
4582 = 5121 200.000
Giving co-parts from the incomes (40%)
% = 4581 44.000
707 40.000
708 4.000
Receiving co-parts from the incomes (40%)
4582 = % 44.000
707 40.000
708 4.000
Giving co-parts from expenses (50%)
4581 = % 40.500
605 500
607 30.000
641 5.000
6451 1.166
6452 250
626 2.000
658 1.083
Receiving co-parts from expenses (50%):
% = 4582 40.500
605 500
607 30.000
641 5.000
6451 1.166
6452 250
626 2.000
658 1.083
44
Diverse creditors and debtors
reimbursement accounting
Main operations from which are resulting receivables and various
debts are:
Compensations and penalties to receive from third parties or owned to
third parties
Selling of fixed assets and investments papers;
Loans from bond issue
Amounts deserved for concessions, rents, management locations, etc;
Dividends and encashing interests for investment papers;
Debit reactualization ;
Debtors and diverse creditors accounting is realized with group 46
sundry debtors and creditors with the 2
nd
degree accounts:
- 461 sundry debtors
- 462 sundry creditors
Diverse creditors and debtors
reimbursement accounting
Example:
At a patrimonial entity is recorded in the accounting the following:
-encashing dividends of 7.000 lei from a entity which has investment papers;
-debits reactivation of 56.000 lei;
-granting to a debtor a discount of 750 lei;
-buying investment papers of 4.000 lei, with later payment;
-unfavorable difference of exchange rate of 850 lei for a foreign exchange to an
external supplier;
-Receivables for concessions, rents, management locations, license and other
similar rights of 50.000 lei;
-sated debtors, withdrawn from the evidence in amount of 300 lei;
-payment of debts to creditors in amount of 400 lei;
45
Diverse creditors and debtors
reimbursement accounting
1)Registering the encashing dividends in amount of 7.000 lei from an entity at
which investment papers are held:
461sundry debtors=762incomes from short term financial investments 7.000
2)Debits reactivation in amount of 56.000 lei
461sundry debtors=754 incomes from reactivated receivables 56.000
and sundry debtors
3)A discount gave to a debtor in value of 750 lei
667discounts granted expenses=461sundry debtors 750
4)Investments papers are acquired in amount of 4.000 lei with later payment
503shares=462sundry creditors 750
Diverse creditors and debtors
reimbursement accounting
5) At the end of financial year N it is recorded an unfavorable difference of
exchange rate of 850 lei, from a foreign currency debt:
665foreighn exchange losses=462 sundry creditors 850
6)Receivables for concessions, rents, management locations, and other similar
rights in amount of 50.000 lei are recorded
461sundry debtors=706rental and royalty incomes 50.000
7) Sated debtors, withdrawn from the evidence in amount of 300 lei are
recorded:
654bad debts written off=461sundty debtors 300
8) payment of debts to creditors in amount of 400 lei is recorded:
462sundry creditors=5121cash at bank 400
46
The independence incidence of financial
period over accounting reimbursements
The principle of financial periods independence imposes the building of
some reimbursement accounts between the successive financial periods.
More than that, during the period, but especially at the end of it, some
economic operations which should be temporary reflected in the entitys
accounting appear and who, later on, have to be annulled or recorded in
other accounts. Such operations are called regularizations.
The main regularization operations are:
- The delimitation of the incomes and expenses from next financial period
from the ones from the current financial period;
- The separation of the receivables and debts that need accessory research
47 regularization accounts and assimilated ones
471 472 473
The independence incidence of financial
period over accounting reimbursements
In current financial period, the amount of 30.000 lei is paid through bank
transfer, representing the subscription to specialized papers for the next
financial period. (the editor is also a commercial entity)
Subscribers accounting Editors accounting
Financial period N
1) Paying the subscription:
471 = 5121 30.000
Financial period N
1) Encashing the subscription:
5121 = 472 30.000
Financial period N+1
2)Including the subscription in
current expenses
6558 = 471 30.000
Financial period N+1
2)Including the subscription in
current incomes
472 = 702 30.000
47
The independence incidence of financial
period over accounting reimbursements
In an account statement gave by a bank, appears an encashing of 119.000 lei
documents who allow the payer identification to be attached. Later on, it is
seen that the payer is an old client, registered in current accounting at
unsure clients.
1.Encashing through bank transfer the sum from the unidentified payer:
5121 = 473 119.000
2.Encashing the receivable from the unsure client, after the payers
identification:
473 = 4118 119.000
The accounting of reimbursements
within the entity
Relations of reimbursement within the unit, name and reimbursements
within the system, appear inside those economic agents organizations, like
enterprises or trusts, which have in their organizational structure subunits
with internal management, which organize and run their own accounting
until the checking balance sheet.
Accounts used:
- 48 Internal reimbursements
481 reimbursement between the entity and subunits
482 reimbursements between subunits
48
The accounting of reimbursements
within the entity
An entity X, transfers to subunit Y, with his own accounting until the checking
balance sheet, spare parts in amount of 6.000 lei, whose accounting, at
both entities, is kept through permanent inventory.
In Xs accounting In Ys accounting
481=3024 6.000 3024=481 6.000
The accounting of reimbursements
within the entity
A entity X, transfers to subunit Y raw materials in amount of 50.000 lei, both
patrimonial entities having their own accounting until the checking balance
sheet, and practicing permanent inventory for stock evidence.
In Xs accounting In Ys accounting
482=301 50.000 301=482 50.000
49
The accounting of adjustments for
receivables depreciation
Reversible value losses established at the end of the financial period when
their accounting values is compared with their real (actual) value
established at the inventory, and for the found differences (when the
accounting value is bigger then the real one), adjustments for depreciation
are constituted or the existing adjustments are brought to date.
The accounting of adjustments for receivables depreciation in recorded in
group 49 adjustment for impairment of receivables, with the following
accounts:
- 491 Adjustment for impairment of customers;
- 495 Adjustment for impairment of receivables from group companies and
shareholders;
- 496 Adjustments for impairment of sundry debtors;
The accounting of adjustments for
receivables depreciation
Parent company gives to a affiliate a financial help in the amount of 100.000
lei.
Because of the affiliates insolvency, the receivable is found in the possible
situation of impossibility of encashing. Later on , the affiliates situation is
upturned and the receivable is encashed. The reimbursements are made
through bank transfer.
Solution:
1)Recording the gave loan:
4511 Intercompany reimbursements=5121 cash at bank 100.000
2)Recording the constitution of adjustment for receivables depreciation
6864 impairment losses = 495 Adjustments for impairment 100.000
on current assets of sundry debtors
3) Recording the encashing of the receivable:
5121 cash at bank = 4511 Intercompany reimbursements 100.000
4) Registering the annulment of the adjustment for depreciation: