Why paying administrative staff is not a capital expenditure

The payment of administrative salaries is a daily fund payment operation of an enterprise and does not meet the definition of capital expenditure.

Capital expenditures are those expenditures that can be incurred over multiple accounting periods due to the benefits of property or services obtained through them. Accordingly, such expenditures should be capitalized and charged to the asset class account and then transferred to the appropriate expense account in instalments based on the benefits obtained.

In the business activities of an enterprise, assets such as fixed assets, intangible assets, deferred assets, etc., which are intended for long-term use and whose economic life will go through many accounting periods, are regarded as capital expenditures. That is, it is capitalized first to form fixed assets, intangible assets, deferred assets, etc.

Then, along with the benefits they provide to the business, they are resold as expenses in various accounting periods. Such as: depreciation of fixed assets, amortization of intangible assets, deferred assets, etc.

The counterpart to capital expenditure is revenue expenditure, also known as period expense. Article 20 of China's "Accounting Standards for Business Enterprises" stipulates that "accounting should reasonably divide revenue expenditure and capital expenditure.

Where the benefits of the expenditure are related to the current fiscal year, it shall be regarded as a revenue expenditure; Where the benefits of expenditures are related to several fiscal years, they shall be treated as capital expenditures".

Capital expenditure refers to the expenditure incurred by the enterprise unit and its benefits in two or more fiscal years, including the expenditure constituting fixed assets, intangible assets and deferred assets. For example, the expenditure on the acquisition of transport equipment, since the transport equipment can be used for several years, should be charged to the "Fixed assets" account. The expenditure of transportation equipment shall be amortized to the costs and expenses of each year through depreciation according to the degree of wear and tear.

This accounting treatment is called depreciation or amortization. The method of recording expenditures as assets is referred to as capitalization. Capital expenditure is different from cost expenditure, the former is borne by the operating income of each beneficiary year, and the latter is fully compensated by the operating income of the current year Obviously, the salary of administrative staff is to be recorded in the production cost of the current year.

Of course, it is a revenue expenditure, and the expenditure incurred in order to obtain income is a revenue expenditure, and the labor of the management personnel is incurred by providing management services for the company, ensuring the normal operation of the company and obtaining income, and the payment for this kind of situation is of course a revenue expenditure.

It is not only the people who directly produce products who will create profits, but the management of enterprises also creates profits, but it is implicit rather than explicit.

Expense expenditures.

The principle of dividing capital expenditure and revenue expenditure requires that revenue expenditure be included in the expense account and included in the profit and loss statement as current profit or loss; Capital expenditures are recorded in the asset account and included in the balance sheet as assets. The former is called expense-to-expense; The latter is called expenditure capitalization.

This has to be differentiated.

First of all, you have to understand the difference between capital expenditure and expense expenditure, for example, the expenditure of building a factory is capital expenditure, and the purchase of a refill, printing paper and the like is an expense expenditure.

Capital expenditure is the expenditure required for the purchase or production of durable goods with a service life of more than one year, and the capital expenditure is capital, and cannot be included in the current expenses when incurred, but should be amortized into the relevant benefit period in installments, so as to match with the current income, so the benefit of its expenditure is related to more accounting years. Expenditures on the purchase of office supplies are revenue-generating expenditures.

The cost of purchasing office supplies is an administrative expense, and the administrative expense is a profit or loss expense.

Please refer to the ledger account classification table in Accounting Basics.

You can buy low-value consumables and amortize them with 55, which is equivalent to half of the actual re-entry cost after use.

Wages are usually revenue-generating expenditures, but if a house is built, the salary of the management personnel assigned by the construction unit to the construction site should be capitalized and included in the construction in progress; If R&D forms intangible assets, the wages of R&D personnel will also be capitalized. Brigade resistance.

Wages are generally income-generating expenses.

Revenue-generating expenses refer to the expenses incurred by an enterprise in the course of its operations, whose benefits are only related to the current fiscal year, and are therefore compensated by the current year's income. When these expenses are incurred, they should be recorded in the relevant cost account for the current year.

If the benefit of an expenditure is longer than an accounting period, the expenditure is a capital expenditure; An expense is a revenue expense if its benefit is limited to one accounting period.

The earnings period is critical.

In addition, wages are usually revenue-generating expenses, but if a house is built, the salary of the management personnel assigned by the construction unit to the construction site should be capitalized and included in the construction in progress; If R&D forms intangible assets, the wages of R&D personnel are also capitalized.

It is true that the expenses during the preparation period, including wages, belong to the "long-term amortized expenses" and are deferred assets, but this part of the "start-up expenses" is to be fully amortized into the current profit or loss in the first month of the formal operation of the enterprise, and the new accounting standards also stipulate that the enterprise can choose to directly include the expenses in the current period of occurrence.

It should be a capital expenditure, as the salaries of the construction personnel of the construction in progress are also included in the cost of the construction in progress, which is related to several fiscal years.

Select A, and the others are included in the profit or loss for the current period.

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b. The purchase of fixed assets is a capital expenditure, and the payment of wages to production workers, donations for earthquake relief, and payment of general equipment repair costs are revenue expenditures. Therefore, choose B.

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