Account 21: description, features, requirements and recommendations

Manufacturing enterprises use two methods of reflecting costs in accounting. These are semi-finished and semi-finished options. Until the beginning of the 20th century. in practice, only the latter was applied. The semi-finished method was proposed in 1910. Consider further its features.

general information

A manufacturing company may purchase semi-finished products from third parties or create them independently. Items purchased from suppliers are accounted for by invoice. 10, subch. 02. Semi-finished products released by the enterprise on its own can be attributed to subaccount. 20 or a separate 21 accounting account.

Features of objects

The concept of semi-finished products manufactured by the enterprise on its own, in its economic essence, is similar to the category of work in progress. Like NZP, they do not go through all stages of the process. Accordingly, semi-finished products can not be called the final product. However, their essential feature is that at the previous stage they were brought into a certain state of readiness. Therefore, semi-finished products can subsequently:

1. Implemented by third-party companies.
2. Let go to the next workshop to create the finished product.
3. Transferred to a structural unit (for example, for auxiliary production).

Account 21

As mentioned above, this article can be used to reflect information about semi-finished products of our own production. This means that as soon as the products to be further processed are ready, they are moved to a special warehouse. Transactions will reflect 21 accounts. Postings may be accompanied by some difficulties. In general, the record looks like this: dB cf. 20 cd 21. Analytics are conducted according to names and places of storage. The spread of the semi-finished method was due to psychological reasons. The fact is that managers, accountants, especially those who do not directly work in accounting, sought to see the movement of material assets in the form that it really is. The semi-finished method provides this fully.

The specifics of posting

The key problem in the reflection of semi-finished products of our own production is their assessment. In this case, three approaches are used:

1. Cost of assets. Theoretically, this method is considered the most correct option. But it is accompanied by a rather laborious process of calculation. Moreover, the accuracy of the calculations will be very doubtful.
2. Conditional price. It is determined in accordance with a special price tag, which is introduced at the enterprise.
3. Transfer price. It is used in all cases of internal cost accounting. He suggests that one shop sells semi-finished products, and the other, respectively, acquires them. This method is effective in situations where the selling unit has the right to independently determine the cost. In this case, the second workshop may acquire them internally or externally at its discretion.

Side sale

A new addition to the Instructions for using the Plan is that the implementation of semi-finished products can be carried out not only by enterprises, but also by individuals. If these operations are carried out systematically, then account 21 is not applied. When reflecting the processes used sc. 43, summarizing information about the finished product. However, if this fact is episodic in nature, then write-off of 21 accounts is carried out as follows:

• Db sc 90.2 cd 21 or
• Db sc 91.2 Cd 21.

The choice of account 90 or 91 will depend on whether the sale of semi-finished products is a normal activity of the company or not. Meanwhile, the key entries will be as follows:

1. dB cf. 21 cd 20 - semi-finished products transferred to the warehouse.

2. dB cf. 20 cd 21 - the unit received previously manufactured products for further processing.

Advantages and disadvantages

Using account 21, a specialist can reflect the production cycle. This, in turn, provides tighter control over the work of financially responsible employees. However, the score 21 has several disadvantages. In particular, on account 20 formed "fictitious" momentum (in economic terms). They will expand as the number of processing steps increases. Along with this, account 21 will be used to calculate each intermediate stage of production. This, in turn, will increase the complexity of the specialist. Accordingly, the semi-finished method is complex, cumbersome and economically disadvantageous.

Solution to the problem

The use of management accounting in practice (previously it was known as operational-technical) eliminates the difficulties that arise. With its help, semi-finished products can be accounted for in kind. Meanwhile, experts note that the semi-finished method is preferable. It does not involve maintaining an account 21. The transfer of products to the warehouse is reflected solely in management documentation. At the same time, it is advisable inside the account. 20 show the movement of semi-finished products in kind.

Who can apply the article?

It is not advisable for manufacturing enterprises that produce a single output to separately open an account to reflect the receipts and movements of semi-finished products that they independently create. Such companies may reflect account information. 20, opening a separate article in it. The use of account 21 is considered appropriate if there is a mass production of products involving a large number of positions. In this case, it becomes possible to monitor and adjust costs if necessary, to accurately determine the price of semi-finished products when sold to third parties. As a rule, account 21 is used by enterprises engaged in textile, food, chemical metallurgical production. The process they use includes several processing steps. It is carried out in different workshops. At the same time, at the output, each unit receives products with certain characteristics. This is considered the primary treatment.

With further movement of objects, they acquire qualities that make them suitable for consumption by the end user. At each stage of the process, the product is endowed with such characteristics that bring it closer to the finished product.

Additionally

The company determines the most profitable way of accounting for semi-finished products of its production independently and fixes it in financial policy. The way the company reflects the receipt and movement of products is also established by the company. At the same time, it takes into account the features of the process, regulatory instructions for its industry. The number of stages is not limited.

Off-balance 21 account: 1s

Reflection of funds, the cost of which is up to 3 thousand rubles, excluded from the reporting upon commissioning, is carried out on a special article. To account 21 subaccounts are opened. They correspond to analytical articles cf. 101, on which OS objects were reflected before decommissioning. Subaccounts can be opened to account 21:

1. 04.21 - for machinery and equipment.
2. 05.21 - for vehicles.
3. June 21 - for production and household equipment.
4. 09.21 - for other OS.

According to this article, analytics is carried out in accordance with nomenclature, financially responsible persons and units, types of activities in total and quantitative terms.

Financial statements

Regardless of which method - semi-finished or semi-finished - the company uses, it needs to pay taxes. Buyer enterprise can recover tax. To do this, you must correctly specify the operation code. It is important here not to make a mistake. If the restoration is carried out on the corrective invoice, code 18 is affixed. If this operation is performed with respect to deductions declared for deduction from the listed advances, then the numbers will be different. In particular, code 21 is set. Often, companies confuse these numbers. Companies often indicate a single invoice code - 21.