GENERAL ACCOUNTS (EXPENSES –PART2)

Expenses play an important role in determining the profitability of the establishment . Accounting management states a record or an accounting software to calculate the daily expenses of the company and another one for adjustments  which includes all cash expenses of the establishment .

Adjustment of revenues and expenses in general accounting

Accounting entries foe expenses divide every account according to its type :

1 -Wages accounting in general accounts 

This includes all the money a worker receives for his work and it is divided into :

A  ) Cash wages in accounting entries :

that is all the worker receives ( monthly salary – production incentive – additional wage for overtimes – bonuses for feasts or good work or annual bonuses – official or administrative allowances )

B )   Benefits in kind of accounting entries :

The worker benefits from them as an advantage not in cash such as medical treatment or clothing . Cash wages and benefits in kind are accounted in the debtor part of the adjustments as they are considered an expense in the operation and trading or profits and loss accounts each according to its type .

Any premium or insurance is deducted from the total wages and its accounting entry will be as follows:

From           wages     

                     Cash wages

                      Benefits in kind 

  To                    Due wages

                       Social insurances

                        Payroll tax 

                    Deductions

Calculating the due wages for the worker is the due amount that he receives after paying premiums and others .

2- Stock accounting ( incoming goods )

It includes all purchases that can be stored like spare parts ,   materials , petroleum substances  and others . The accounting entry is :

FROM                  stock 

to                              Agent 

On payment 

From                             agent

TO                           bank

3 - electricity and water ( Used commodities)

Electricity and water are called  used commodities  because they aren’t stored but used directly .

The accounting entry is : 

from                    used commodity 

                           electricity 

                           water 

TO                    supplying agents 

On payment 

From                       supplying agents 

 To                               bank

4  - Rentals in adjustment record and accounting entries :

They are the sums that are paid as rentals and adjusted in the creditor part . The accounting entry is :

FROM             rentals

TO                    agent 

ON payment 

From           agent 

To                bank                    

5 – FINES and charges in adjustment software :

All Administrative or official charges and fines are included  .

They are recorded in adjustment software ant their accounting entry is :

FROM                   CHARGES AND FINES 

TO                          TAXES PAID BY THE UNIT

ON PAYMENT 

FROM            TAXES PAID BY THE UNIT

TO                  BANK

6 – What are Services accounts ?

From their name services accounts include all that serving the company internally and externally and they come in the second place after wages . They are many such as (  travel allowances , transport and carrying ,maintenance expenses , mail and phone)

The accounting entry is :

FROM                                            SERVICE EXPENSES

                                                        TRAVEL ALLOWENCE 

                                                        TRANSPORT EXPENCES

    MAINTANANCE EXPENSES

TO                                                    AGENT

ON PAYMENT

FROM                                              AGENT

TO                                               BANK

                                                           

How to determine expenses centers ?

Adjustment record in general accounting system is the basis in preparing concluding accounts because it analyzes  the daily expenses of the company and combines all previous accounts . Then a monthly accounting entry is created  .

Adjustment software is the basis in determining cost centers for each unit of the company .

Large companies depend on external administrative and accounting software through dealing with accounting systems companies in Egypt in order to gat accurate accounts ( revenues , expenses stock value ) and to calculate price changes in the market .

For reservation and price inquiry for the best accounting software in Egypt and The Middle East  contact us now.