How to make accounting entries for repair costs, and what accounts are included in repair costs

Repair expenses are included in the management expenses and sales expenses. Follow-up expenses such as fixed asset repair expenses incurred by administrative departments and special sales agencies set up by enterprises shall be included in management expenses or sales expenses.

Accounting entries for maintenance costs:

Debit: Administrative Expenses Selling Expenses.

Credit: Bank deposits.

Management expenses refer to the various expenses incurred by the enterprise for the organization and management of production and operation, including the start-up expenses incurred by the enterprise during the preparation period, the company expenses incurred by the board of directors and the administrative department in the operation and management of the enterprise and the company expenses that should be borne by the enterprise (including the remuneration of employees of the administrative department, material consumption, amortization of low-value consumables, office expenses and travel expenses, etc.), the trade union funds borne by the administrative department, the board of directors fees (including the allowances of board members, conference fees and travel expenses, etc.), and the fees for hiring intermediaries, consulting fees (including consulting fees), litigation fees, business entertainment expenses, technology transfer fees, research fees, etc. Follow-up expenses such as fixed asset repair costs incurred by the production workshop (department) and administrative management department of the enterprise are also accounted for as management expenses.

Sales expenses refer to the various expenses incurred in the process of selling goods and materials and providing labor services, including insurance premiums, packaging costs, exhibition fees and advertising costs, commodity maintenance costs, estimated product quality assurance losses, transportation costs, loading and unloading costs, etc., as well as employee salaries, operating expenses, depreciation expenses and other operating expenses of sales agencies (including sales outlets, after-sales service outlets, etc.) specially set up for the sale of the company's commodities. Subsequent expenses incurred by the enterprise in connection with the repair of fixed assets related to the establishment of a special sales organization are also sales expenses.

I do it according to the unit in which the expense is incurred.

1.Repair costs incurred by the management department:

Borrow: overhead repair costs.

Debit: Tax Payable VAT Payable (Input Tax).

Credit: Bank deposits.

2.Machinery and equipment repair costs incurred in the production workshop:

Borrow: manufacturing costs, repair costs.

Tax Payable VAT (input tax) payable

Credit: Bank deposits.

The sales department incurs maintenance costs.

Borrow: Selling Expenses Repair Costs.

Tax Payable VAT (input tax) payable

Credit: Bank deposits.

The repair fee belongs to the management fee.

1. The sales, installation and maintenance of the company's main commodities shall obtain the purchase ticket.

It is a special VAT invoice or general invoice for maintenance costs.

It should be included in the cost of main business.

Subjects. There is also the operating company, the repair cost of the vehicle, and the input ticket obtained is a special VAT invoice or general invoice for the maintenance fee, which should be included in the operating cost account.

2. If the enterprise is for the production and processing industry, the equipment repair cost and the input invoice obtained are the special VAT invoice or general invoice for the maintenance fee, which should be included in the manufacturing cost.

Subjects. Fixed asset.

The purchase invoice obtained is the special VAT source invoice or general invoice for the maintenance cost, which should be included in the management expense account.

3. For the repair costs of the vehicles required for the sale of the required vehicles, the input tickets obtained are the special VAT invoices or general invoices for the maintenance costs, which should be included in the sales expenses.

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The cost of repairs depends on the department it is used for.

If it belongs to the factory department or management department, it is included in the "Management Expenses - Repair Costs" account:

Borrow: overhead repair costs.

Debit: Tax Payable VAT Payable (Input Tax).

Credit: Bank deposits.

If the repair cost belonging to the shop floor is included in the "Manufacturing Cost - Repair Cost" account:

Borrow: manufacturing costs, repair costs.

Tax Payable VAT (input tax) payable

Credit: Bank deposits.

If it belongs to the sales department, the maintenance cost account is incurred:

Borrow: Selling Expenses Repair Costs.

Tax Payable VAT (input tax) payable

Credit: Bank deposits.

Accounting entry refers to a record that predetermines the name of the account involved in each economic transaction, as well as the direction and amount of the account to be credited to the account, referred to as an entry.

Accounting entries are composed of three elements: the direction of debit and credit, the name of the corresponding account (account) and the amount to be credited. According to the number of accounts involved, it is divided into simple accounting entries and compound accounting entries. Simple accounting entries refer to accounting entries that only involve the debit side of one account and the credit side of another account, i.e., the accounting entries of one debit and one credit; Compound accounting entries refer to accounting entries composed of two or more corresponding accounts (excluding two), i.e., accounting entries for one loan for multiple loans, one loan for multiple loans, or multiple loans for multiple loans.

Repair costs are included in different accounts according to different purposes, and can be included in sales expensesManagement fees, manufacturing expenses, production costs, etcLedger accountsThe repair cost of the management department is included in the management expenses, and the repair costs of the sales department are included in the sales expenses.

The accounting entries are as follows:

Borrow: selling expenses, administrative expenses, manufacturing expenses, production costs.

Credit: Bank deposits.

PrecautionsThe new standard stipulates that the repair expenses of fixed assets that do not meet the recognition conditions stipulated in Article 4 of the Fixed Assets Standards shall be included in the profit or loss for the current period when incurred, and it is clearly pointed out in the appendix "Accounting Subjects and Main Accounting Treatment" of the Accounting Standards for Business Enterprises - Application Guide that the subsequent expenses such as the repair costs of fixed assets related to the establishment of special sales agencies shall be accounted for in the "sales expenses" account.

Follow-up expenses such as fixed asset repair expenses incurred by the production workshop (department) and administrative management department of the enterprise shall be accounted for in the "management expenses" account. The expense items related to fixed assets in the Manufacturing Expense account are the consumption of machine materials and depreciation of fixed assets on the production floor.

There is no fixed asset repair cost item.

Repair costs should be included in the sales expenses, administrative expenses, manufacturing expenses, and operating cost accounting accounts (different purposes are included in different accounts).

Generally, minor repair costs are included in the management costs.

Expenditure on major repairs of fixed assets refers to the repair of most or all of the fixed assets in order to restore their performance. When the major repair expenses are not withheld and the expenditure is large, and the income period is more than one year, the major repair expenses should be treated as long-term amortized expenses. The expenditure on major repairs of fixed assets must meet the following conditions at the same time:

1. The repair expenditure reaches more than 50% of the tax base at the time of acquisition of fixed assets;

2. The service life of fixed assets after repair is extended by more than 2 years.

Accounting for expenditure on major repairs of fixed assets.

The major repair of fixed assets is the partial renewal of the company's fixed assets, such as the renovation of houses and buildings. Its characteristics are: large repair range, long interval, small number of repairs, and large repair cost at one time.

The cost of major repairs of fixed assets is generally collected through the "construction in progress" account, and then carried forward to the relevant accounts after the completion of the major repairs. Due to the uneven occurrence of major repair expenditures, in order to balance the cost burden, companies can adopt the method of expense amortization or expense provisioning.

For your own company, the management fee - maintenance fee. If you repair the equipment you sell, you will pay for the sales fee (after-sales service fee).

Under normal circumstances, the small repair cost is treated as the current profit or loss, or the corresponding account classification is carried out according to the use of the repair equipment, and the account is:

Borrow: manufacturing expenses (repairing equipment for production).

Overhead (repairing equipment for day-to-day office work).

Selling expenses (repairing equipment for sale).

Credit: Bank deposit (or other).

If the repair of large-scale equipment (such as fixed assets), that is, the subsequent expenditure of fixed assets, it needs to be accounted for according to whether it meets the capitalization and expense. If the capitalized repair costs are satisfied, they should be included in the cost of fixed assets and deducted from the carrying amount of the replaced part. If the repair costs do not meet the capitalization requirements, they should be expensed and included in the current administrative expenses or selling expenses when they are incurred, depending on the circumstances.

Extended Content:

Manufacturing expenses: Manufacturing expenses refer to the indirect costs incurred by the enterprise in the production of products and the provision of labor services, including water and electricity expenses incurred by the production department of the enterprise (such as the production workshop), depreciation of fixed assets, amortization of intangible assets, employee remuneration of management personnel, labor protection expenses, relevant environmental protection expenses stipulated by the state, and loss of work stoppage during seasonal and repair periods.

Management expenses: Management expenses refer to the various expenses incurred by the administrative department of the enterprise for the organization and management of production and business activities.

Sales expenses: sales expenses refer to the various expenses incurred in the process of selling goods and materials and providing labor services, including insurance premiums, packaging costs, exhibition fees and advertising costs, commodity maintenance costs, estimated product quality assurance losses, transportation costs, loading and unloading costs, etc., as well as employee salaries, operating expenses, depreciation expenses and other operating expenses of sales agencies (including sales outlets, after-sales service outlets, etc.) set up for the sale of the company's goods.