How to make accounting entries when purchasing instruments?
1. When purchasing instruments that do not need to be installed:
Borrow: fixed assets
Taxes payable-VAT payable (input tax)
Loan: bank deposit (or accounts payable and other subjects)
2. When purchasing the instrument to be installed:
Fixed assets installation stage:
Borrow: Construction in progress.
Taxes payable-VAT payable (input tax)
Loan: bank deposit (or accounts payable and other subjects)
When the fixed assets are installed and reach the predetermined usable state:
Borrow: fixed assets
Loan: Construction in progress.
What are fixed assets and construction in progress?
Fixed assets refer to non-monetary assets held by enterprises for producing products, providing labor services, leasing or operating management, which have been used for more than 12 months and reached a certain standard, including houses, buildings, machines, machinery, means of transport and other equipment, appliances and tools related to production and business activities. Fixed assets are the labor means of enterprises and the main assets that enterprises rely on for their production and operation. From the perspective of accounting, fixed assets are generally divided into productive fixed assets, unproductive fixed assets, leased fixed assets, unused fixed assets, unnecessary fixed assets, financing leased fixed assets and donated fixed assets.
Construction in progress refers to the expenditure on the construction, reconstruction and expansion of fixed assets of enterprises, or unfinished projects such as technical transformation, equipment renewal and major repair projects.
Projects under construction usually include
Independent operation
and
Outside the package
Two ways. Self-operated construction in progress refers to the projects that enterprises purchase engineering materials, construct and manage themselves; Construction in progress refers to projects contracted by other engineering teams or units by enterprises through signing contracts.
Construction in progress belongs to the asset category.