Key Aspects of Revenue Acounting

Revenue acccounts should be categorized as:

• Main business revenue (high-tech product sales, technical services, technology transfers)
• Other business revenue (technology transfer income)

Avoid modifying account structures mid-year to prevent accounting software conflicts. Adjustments should be made at year-end when setting up new accounts.

Cost Accounting Principles

Cost accounts must mirror revenue classification:

• Match high-tech/non-high-tech categories
• Align with product/service classifications
• Main cost categories: high-tech product costs, technical service costs

Government Subsidy Accounting

Types of subsidies:

• Industry-specific policy support
• Technology grants
• Tax refunds
• Financial interest subsidies

Net method accounting may create tax differences by reducing asset book values. Revenue-related subsidies go to "Other Income", unrelated to "Non-operating Income".

Tax Accounting Considerations

1. VAT Accounting

   • Standard accounts:

     Tax Payable - VAT Payable
       ├── Input Tax
       ├── Output Tax
       └── Unpaid VAT Transfer
     Tax Payable - Unpaid VAT
     

   • For software companies with VAT refund policies:
     • Create sub-accounts for hardware/software/services
     • Allocate undistinguished input tax monthly based on revenue proportions

2. Additional Tax Calculations

   • Urban construction tax
   • Education surcharges
   • Accounting entries:

     Taxes and Surcharges
       ├── Urban Construction Tax
       └── Education Surcharge
     

3. Corporate Income Tax

   • Account for temporary differences (deferred tax assets/liabilities)
   • Accelerated depreciation impacts deferred tax liabilities

Accounting Process Flow

1. Chronological records → Account balance sheet → Financial statements
2. Ensure strict correspondence between chronological records and account balances
3. Financial statements may require adjustments for proper balancing

Audit Adjustments

1. Account-statement reconciliation
2. Reclassification of negative balances
3. Error correction (including cumulative adjustments)

Taxpayer Classification

• General taxpayers: 6%, 9%, or 13% rates
• Small-scale taxpayers: 1% preferential rate (2023 policy) with quarterly 300,000 CNY exemption

Invoice Handling

• General taxpayers can deduct input VAT from special invoices
• Small-scale taxpayers must include entire invoice amount in costs
• Unused VAT credits appear as negative balances in tax payable accounts