Account 71 in accounting is used to visually reflect the funds issued from the cash desk to the company employees. Money is allocated for expenses in connection with a business trip or to meet the general business needs of the organization.
Account Assignment
Account 71 is designated for the bookkeeping of the issuance and refund of unspent reporting amounts. Money is issued from the cash desk with the execution of the expenditure cash warrant and only on condition that the employee has submitted advance reporting on the spent reporting funds received earlier.
To receive funds, the employee writes a statement, which must be certified by the head of the company. After the expiration of the period for which the funds were provided, the employee must within 3 days provide reports on the purpose and amount of money spent. Unspent funds are returned to the cashier of the enterprise.
Account Specifications 71
71 account is arranged as an active account, but a balance at the end of the month can be formed both credit and debit. The loan balance will mean the organization’s debt to the employee: the amount issued in the report was not enough for confirmed business expenses. The final balance of the debit indicates the receivable of the employee to the company.
There can be no doubt as to whether he counts 71: active or passive. The account is active-passive in structure closer to the active. An increase in the amount of disbursed funds will be reflected in the debit, and a decrease in accounts receivable - in the loan.
Analytical accounting accounts are opened for each amount issued in the sub-report. Control over the processes of issuance and use of targeted funds allows to reduce the inefficient costs of the enterprise.
Reflection in the balance sheet
At the end of the reporting period, the accountant calculates the balances on the synthetic accounts. Data should be reflected in the balance sheet. The debit end balance is recorded in section II of the balance sheet “Current assets” (“Accounts receivable”).
The loan balance at the end of the period is transferred to the fifth section of the balance sheet “Short-term liabilities” (“Accounts payable”). The values are used as the opening balance of account 71 at the beginning of the next period.
Correspondence with other accounts
Account 71 is debited when the employee issues money under the report. For this, mainly use score 50, if the money was issued from the cash desk, and account 51, if the funds were transferred from the current account.
Account 71 is credited with the following accounts:
- non-current assets;
- production process stocks;
- production process costs;
- goods and products;
- cash equivalents;
- settlements with employees and other operations;
- financial result.
The accounts of sections I – IV of the standard chart of accounts are used in correspondence with the credit of account 71 in the case of issuing accountable amounts for the purchase of materials, stocks and other material values related to non-current assets of the organization or the production and implementation process.
Reporting amounts that are not paid on time are written off to the financial result of the enterprise ("Losses and losses"). In the future, the accountant can reflect the amount of employee debt to the organization in account 70 and write it off from wages.
Accountable travel expenses
An employee going on a business trip has the right to reimburse the amount of travel expenses incurred with the aim of:
- fare to the destination;
- payment of rental housing;
- payment of per diem expenses;
- payment of other expenses agreed with the employer.
It should also be borne in mind that an employee can only qualify for travel payments if he is a full-time employee. The amount of money issued under the report is regulated by collective labor contracts or the charter of the enterprise. Funds issued in foreign currency must be accounted for in separate subaccounts.
Travel allowance postings
The issuance of travel expenses to the employee is accompanied by entries in the accounting records and the execution of the relevant documents. Having paid money from the cash desk to the sub-report, the following is posted: Dt account 71 Kt account 50. If the money was transferred to a corporate payment card, the transaction is executed by entries: Dt 55 Kt 51, Dt 71 Kt 55.
The further accounting procedure depends on the purpose for which the employee was sent on a business trip. If production needs are fulfilled, accounts 20, 23 or 29 are debited with a score of 71. The trip of an administrative and managerial nature is debited to account 26, for the sale of goods - to account 44.
A business trip related to the acquisition of property for an enterprise is included in the cost of the acquired asset and is reflected in the corresponding accounting account inventories non-current assets, goods.
The amount of VAT on business trip payments of a production nature is accounted for by postings:
- Dt "VAT" Kt "Settlements on accountable amounts" - the amount of VAT accepted.
- Dt 68 "Calculations for taxes" Kt 19 "VAT" - a tax deduction of VAT.
It should be remembered that the VAT tax deduction for expenses not related to production is not made. A transaction is drawn up Dt "Other expenses" Kt "VAT", which means the write-off of VAT.
The confirmed expenditures of travel expenses for a large amount shall be reimbursed by the enterprise in favor of the employee, posting - Dt account 71 Kt account 50. If the employee returns unspent amounts, the transaction has the opposite form: Dt "Cash desk" Kt "Settlements on accountable amounts".
Reporting Amounts for other operations
In addition to travel expenses, an enterprise may issue an employee a cash account in order to pay:
- operating expenses;
- purchase of small wholesale goods;
- entertainment expenses.
Household and operating expenses involve the purchase of goods, payment of fuel and lubricants and services. Representation expenses relate to general business expenses and include the costs of receiving foreign representatives, buffet services, translation services, etc. These do not include expenses for entertainment and recreation in dispensaries.
Reflection of representation expenses in accounting
To account for the reported reporting amounts in order to pay for representative events, postings are made to 71 accounts:
- Dt "Settlements on accountable amounts" KT "Cashier" - issued money under the report.
- Dt "General expenses" Kt "Calculations for accountable amounts" - reflects the amount of hospitality expenses.
- Dt "VAT" CT "Settlements on accountable amounts" - the amount of VAT.
- Dt "Cash desk" CT "Settlements on accountable amounts" - unused funds are returned to the cashier of the enterprise.
- Dt "Settlements on accountable amounts" KT "Cashier" - issued funds as compensation to the employee overruns.
- Dt "Retained earnings / loss" Kt "Tax calculations" - in case of excess of the standardized costs, the amount of VAT for overruns is restored.
The amount of hospitality expenses should not exceed 4% of labor costs in the reporting period.
Accounting for operating accountable amounts
Goods purchased for cash issued under the report are recorded on accounts of non-current assets, inventories or goods.
Consider an example: from the cash desk for the purchase of materials issued 3000 r., Of which 2500 r actually spent. The accountant makes the postings:
- Dt "Settlements on accountable amounts" CT "Cashier" - 3000 p. - issued to an accountable person for the purchase of materials.
- Dt "Materials" CT "Calculations on accountable amounts" - 2500 p. - reflects the amount of costs for materials.
- Dt "Cash desk" Kt "Settlements on accountable amounts" - 500 p. - the accountable person returned to the cash desk unused funds.
If the residual reporting amounts are not returned by the employee within the prescribed period, or was not provided expense report about spent funds, posting is carried out: Dt 94 Kt 71. Depending on the method of deducting the amount, the following transactions can be made:
- Dt "Payroll calculations" Kt "Losses and losses" - deduction of the reporting amount from the employee's salary;
- Dt "Settlements with employees for other operations" CT "Losses and losses" - the receivable of the employee for the non-returned accountable amount.
Before using account 71 in accounting for compiling correspondence on the operations of reflection and collection of accountable amounts from an employee, it is necessary to familiarize yourself with the accounting policies of the enterprise. In special cases, with account 71, accounts 91, 99 can also be used.
