Correspondence 42 accounts and accounting entries examples. Retail trade margin accounting entries
Passive account 42 in accounting is used by retail trade organizations in order to summarize information on the amounts of the trade margin on products sold at sales prices. In addition, discounts from suppliers on the estimated loss of goods and on reimbursement of transportation costs are also taken into account here. Let's figure out how the trade margin is formed in the accounting of retail companies.
Account 42 in accounting
The trade margin (TM) is the monetary value of the gross income added to the initial purchase price of the goods used by the enterprise to compensate for direct and indirect costs in terms of selling products. The company has the right to keep records of goods according to the chosen method approved in accounting policy- at the purchase price or at the sale price (clause 13 PBU 5/01). Moreover, such a right is not given to all trading firms, but only to retailers.
TN arises when accounting for sales prices and, according to Order No. 94n dated October 31, 00, is reflected in the account. 42. The amount of the accrued margin is formed on the loan account. 42 in correspondence with accounts - , , , , . In a special way, debit entries are made on account 42 “Trade margin” - not directly through the debit of the account. 42, but by reversing amounts from the loan. Analytics is conducted separately for goods sold and shipped. The methodology for calculating the TN is established by the companies independently - as a percentage of the sale price, in a fixed amount or in a fixed percentage.
Account 42 "Trade margin" - postings:
- D 41 K 42 - calculated TN.
- D 90.2 K 42 - the reverse of the TN for goods sold is reflected.
- D 91.2 K 42 - reflects the write-off of the excess markdown over the TN.
- D 44 K 42 - reversal reflects the write-off of TN for products used for the needs of the organization.
- D 94 K 42 - reflects the write-off of TN in terms of shortages / damage to products identified during the inventory of property.
42 accounting account - postings with examples
Example 1
A retail company purchased 8 computers for subsequent resale at a price of 21,240 rubles, incl. VAT 3240 rub. The markup is set at 25%. The accrual of TN is reflected in accounting using postings:
- D 41 K 60 for 144,000 rubles. – Computers have been credited to the seller's warehouse.
- D 19 K 60 for 25,920 rubles. - highlighted in the delivery of VAT.
- D 60 K 51 for 166,920 rubles. - payment for the goods was made under the contract with the supplier.
- D 68 K 19 for 25,920 rubles. - the tax is refundable.
- D 41 K 42 for 36,000 rubles. - calculated TN for computers (18000 x 25% x 8 pcs.).
- D 51 K 90.01 for 212,400 rubles. - carried out implementation.
- D 90.2 K 41 for 212,400 rubles. - reflects the implementation of the party.
- D 90.2 K 42 for 36,000 rubles. – storno TN.
- D 90.03 K 68 for 32,400 rubles. - VAT payable.
- D 90.09 K 99 for 144,000 rubles. - reflects the profit from the sale.
Example 2
The retail store spent materials for the repair of its own premises in the total amount of 28,000 rubles, TN is 30%. Postings in accounting:
- D 44 K 41 for 28,000 rubles. - reflects the write-off of building materials.
- D 44 K 42 8400 rub. - reversal reflects the write-off of TN for goods and materials spent on their needs.
One of the types of entrepreneurship is wholesale and retail trade in products and goods. In this case, the seller's profit is considered to be the trade margin, which is the difference between the initial cost of the goods and the final sale price. In the article, we will analyze the meaning and definition of the trade margin, as well as accounting entries on account 42.
The value of the trade margin
In order to obtain the planned profit, the seller, when selling the goods, forms the cost using the amount of the markup on the initial cost. The resulting difference should cover all estimated costs, including the following:
- VAT and other indirect taxes;
- sales costs (third party services, employee salaries);
- other expenses.
At the same time, the markup provides not only coverage of costs, but also the profit of the seller. At the same time, the value of the trade margin should not interfere with the further competitiveness of the product on the market compared to other similar items.
Video lesson. Account 42 in accounting “Trade margin”: examples
Video lesson on accounting for account 42 “Trade margin”. The lesson is taught by the chief accountant, expert, teacher of the site Gandeva N.V. Typical situations, examples and postings are considered ⇓
Determining the trade margin
To determine the final cost of goods in wholesale and retail trade, different algorithms are used.
In case of wholesale sales, the trade margin is the difference between the selling wholesale price and the purchase price.
To account for retail trade, it is allowed to accept goods not only at cost, but also at final selling prices. Such actions are permissible, since sometimes it is impossible to determine the natural value of a unit of goods. An exception is a unit of large production, for example, household appliances. But when selling smaller goods (stationery, food), detailed accounting is not possible. In retail firms, it is preferable in such cases to take into account the goods at selling prices.
The selling price of the goods consists of the cost price and the added margin. The latter value can be set by organizations themselves, with some exceptions indicated below.
It is allowed to set the markup using the Register of retail prices approved by the head. For any type of product, information is given about the supplier, the purchase price, the markup in % terms, and the final market price. For each place of subsequent sale, its own price can be set.
An approved registry might look like this:
Product | Provider | Cost price | markup 1 | Retail price 1 | markup 2 | Retail price 2 |
Pen | LLC "Prestige" | RUB 45.00 | 30% | RUB 58.50 | 35% | RUB 60.75 |
Pen | OOO "Titan" | RUB 54.00 | 30% | RUB 70.20 | 35% | RUB 72.90 |
Pencil | Mechta LLC | RUB 25.00 | 30% | RUB 32.50 | 35% | RUB 33.75 |
The markup can also be the same for all types of goods or depend on their type. The chosen method of determining retail prices is recommended to be fixed in the current accounting policy.
State regulation of pricing
Prices for certain products are controlled by the state. The government determines the allowable value for certain goods that have a special social significance. If the product is on the Price Controlled Products List, then their total cost, including the markup, must be formed in accordance with current laws and regulations. regulations at the federal and local levels.
If there is a steady increase in prices for goods of social importance, the Government has the right to temporarily limit their maximum limit. But it is possible to do this if the level of price increase exceeds 30% over a 30-day period. The maximum allowable value of such goods, set by the Government, may be maintained for up to 90 days.
Socially significant goods include the following: meat, milk, sunflower and butter, flour, eggs, sugar, salt, bread, cereals, potatoes, some types of fruits and vegetables. In addition to food products, the list of goods for which control over selling prices can be established includes children's goods, medicines, medical products, goods intended for sale in the Far North and areas equated to it.
When cases of overpricing for goods regulated by states are identified, responsible persons and organizations are expected to be fined. For management, fines of up to 50,000 rubles are provided, for legal entities - in the amount of twice the amount exceeded as a result of overstatement of revenue for the entire period of overstatement, but with a total duration of not more than a year.
Accounting for the trade margin (account 42: postings)
In the accounting of trade enterprises, the accounting of the trade margin is carried out separately. For these purposes, the Trade Margin account is used. All sorts of discounts and product losses and other data can also be reflected here.
The following transactions can be used to determine the markup:
- Dt 41-2 - Kt 42 - the markup is reflected.
- Dt 90 - Kt 42 - the amount of markup as a result of damage, loss of goods was reversed.
For the balance of goods, the markup is determined as follows: a percentage consisting of the ratio at the beginning of the month of the amount of the markup on the balance of goods and those received during the month to the amount of goods sold and final balances. The amount of goods sold is determined by selling prices.
In organizations paying VAT, the formation and accounting of the markup is different. For example, tax evaders (organizations on the simplified tax system or exempt from VAT) form a margin on account 42 itself.
If a trading company is a payer of this indirect tax, then it must use 2 sub-accounts:
- 42-1 - accrued margin on the price from the supplier;
- 42-2 - VAT on the sale price, which is part of the margin.
When selling goods at retail, the amount of tax is included in the final price.
Example. A trading company that is a VAT payer purchased goods for further sale at a price of 354 rubles per unit, including 18% VAT. Quantity of goods - 80 pieces. The value of the trade margin is 20%. In accounting, the company uses sub-accounts 42-1 and 42-2.
The following transactions will be reflected in the accounting:
Dt 41-2 - Kt 60 - 300*80=24000 rub. ― the goods are received from the supplier.
Dt 19 - Kt 60 - 54 * 80 * = 4320 rubles. ― the input VAT from the supplier is reflected.
Dt 68 - Kt 19 - 4320 rubles. - the amount of tax is accepted for deduction.
Dt 41-2 - Kt 42-1 - 4800 rubles. - trade margin on the price of goods without tax.
Dt 41-2 - Kt 42-2 - 864 rubles. ― VAT is included in the trade margin.
The total markup is 4800 rubles. + 864 rub. = 5664 rubles for common lot incoming goods. At the same time, the selling price of 1 unit of goods is 424.80 rubles.
Under certain circumstances, the trade margin may be reduced. This happens due to the sale, the need for a markdown. The markup reduction operation is reversed by the following posting:
Dt 41 - Kt 42 - reversal of the size of the markup.
Dt 91-2 - Kt 41 - the excess of the amount of the reduction over the margin.
Account 42 "Trade margin" is intended to summarize information on trade margins (discounts, discounts) for goods in retail trade organizations that keep records at sales prices. This account also takes into account discounts provided by suppliers to retailers for possible loss of goods, as well as for reimbursement of additional transportation costs.
Retail trade organizations that keep records of goods at sales prices usually receive goods received from suppliers with an accounting entry on the debit of account 41 “Goods” and the credit of account 60 “Settlement with suppliers and contractors” at purchase prices. In order to bring the purchase price of the credited goods to the value at sales prices, the difference between the cost of purchasing goods and their cost at sales prices is determined, and account 41 is debited to this difference and account 42 "Trade margin" is credited.
As goods are sold or retired for other reasons, “the amount of the trade margin is debited from the credit of account 42 to the debit of accounts 90 “Sales” or 45 “Goods shipped” (when selling goods), 94 “Shortages and losses from damage to valuables” (when damaged and shortage) (94/41; 44/94), 41 "Goods" (in case of natural loss) by the "red reversal" method.
The amounts of trade margins related to the goods remaining in the organization are specified according to the inventory lists by determining the due discount (markup) on goods in accordance with the established sizes.
The amount of discount or markup on the balance of unsold goods can be determined based on the ratio of the amount of discounts or markups on the balance of goods at the beginning of the month and the turnover on the credit of account 42 (excluding reversal entries) to the amount of goods sold for the month and the balance of goods at the end of the month (by sales prices).
Analytical accounting on account 42 should provide a separate reflection of the amounts of discounts (markups) and the difference in prices related to goods shipped and goods remaining in organizations.
Formation and accounting of reserves for the reduction in the cost of goods.
In accordance with paragraph 25 of PBU 5/01, goods that are obsolete, have completely or partially lost their original quality, or whose current market value has decreased, are reflected in the balance sheet at the end of the year, less a reserve for the decrease in the cost of goods.
The reserve for the decrease in the cost of goods is formed at the expense of the financial results of the organization by the amount of the difference between the current market value and the actual value of the goods, if the latter is higher than the current market value.
The formation of a reserve for the decrease in the cost of goods is reflected in the debit of account 91 “Other income and expenses” and the credit of account 14 “Reserves for the decrease in the value of material assets”.
At the beginning of the period following the period in which the above entry was made, the reserved amount is restored by an entry on the debit of account 14 and the credit of account 91, based on the assumption of full consumption of goods in the next reporting period.
Features of using the account $42$ "Trading margin"
Definition 1
Trade margin- this is part of the price of the goods, they will be applied in wholesale and retail trade. This is the value added to the purchase price of the product. Its purpose is to reimburse the costs of selling, receiving a premium, and paying part of indirect taxes.
shopping discount- part of the retail price.
The use of the $42$ account becomes useful in automated retailing. The introduction of such an accounting system makes it possible to simplify and make transparent the balance of goods, their sale and determine profit. Also, such a system allows you to stop abuse. Automation will also allow the introduction of address storage, which will simplify the process of receiving goods, their layout, tracking the expiration dates of goods, and keeping records of certificates of conformity. Until the introduction of the automated system, accounting is kept at retail prices.
The main advantage of using the $42$ account- this is the storage and securing of goods for a materially responsible person. With such accounting, you can daily remove intermediate balances for goods, which is convenient if a trading enterprise has many departments and a wide range of goods.
With all the positive aspects, there are also disadvantages. Namely, with such a system, the process becomes more complicated accounting. Complicated accounting records. However, it is also important to note that retail prices may change frequently. Automation of the accounting process allows you to quickly change the price of the goods, the only thing left is the human factor - to change the price tags for the goods in time to avoid conflict situations with buyers.
Remark 1
Any business transaction is reflected in the primary document, the trade margin will be reflected in the register of retail prices. This document determines the selling price. The price register must be approved by the head of the enterprise; such a register does not have a single form. It should be compiled for each incoming invoice, daily.
Seller Control Scheme
- receipt of goods by quantity, acceptance of goods is noted in the incoming invoice, certified by the signature of the materially responsible person.
- when prices change, the seller is issued a register of retail prices and price tags for the goods;
- waybills are attached to the commodity report, checked;
- the correctness of the reflection of sales is carried out by reconciliation of the sums of the $Z$-report and the sum of the loaded $Z$-report into the automated system. Such an operation can be carried out automatically (a sales receipt is issued in automated system and when posting the document, a cash receipt is automatically printed);
- an inventory is carried out.
Also, the advantage of accounting using the $42 account is tax accounting, which is maintained in purchase prices.
To switch to this system, you must:
- change the accounting policy - perhaps once a year, accounting starts from the new year.
- if an enterprise works with several stores, it is necessary to reflect in the accounting policy which particular divisions will apply such a system.
Accounting methods and correspondence accounts
Goods may come from suppliers, consignors, sponsors, etc. for the receipt of goods from suppliers, it is necessary to make records:
- Dt $41$ – Cr $60$ – acceptance of goods at purchase price
- Dt $19$ - Kt $60$ - reflected VAT on goods received
- Dt $42$ – Kt $41$ – trade margin is reflected
Account $42$ "Trading margin"
Remark 2
This account is used to summarize information about the trade margin (discounts). The account will be credited with $42$ when goods are accepted for accounting in the amount of the trade margin (discount).
The amounts of the trade margin of goods that were sold, released or written off due to marriage, damage, shortages are recorded as a reversal entry:
- Dt $90$ – Ct $42$.
The specifics of the $42$ account is that it is not debited.
Reflection of the $42$ account in the balance sheet
Account $42$, shown on the balance sheet in line $214$ "Finished Goods and Goods for Resale". This line summarizes the account balances $43, 41, 15, 16$, minus $42$ and $41$.
Organization of work with a $42$ account in the $1$C program
A special document is intended to reflect sales transactions. "Retail Sales Report". By default, the program offers the type of KKM operation, it is also necessary to specify the warehouse and cash flow item. The name of the product and its quantity must be indicated. The document automatically generates postings:
- Dt $90.02.1$ – Ct $41.02$
- Dt $50.01$ – Ct $90.01.1$
- Dt $90.03$ – Ct $68.02$
Remark 3
Although according to the document a posting is formed for the receipt of funds at the cash desk, an entry in the cash book is not made out, since it should be formed on the basis of "Incoming cash orders". To form the necessary record, you need to generate a document, it will no longer generate a posting, but cash will be included in the cash book.
Also, in order to organize accounting for this system, the program must reflect the necessary changes in the accounting policy and in the working chart of accounts.
sch. 42 “Trade margin” is widely used by organizations operating in the retail trade to display information about trade margins on products sold, which are accounted for at the enterprise at sales prices.
Account 42 in accounting is a collective information about mark-ups set by enterprises on assets sold to consumers when accounting for available products at retail prices. Used by trading companies to control the difference between the estimated selling price and the purchase price set by suppliers, i.e. there is a generalization of information about the possible income of the organization from the implementation of retail trade.
Attention! The basis of retail is the transfer of assets exclusively to the final consumer.
Account 42 in accounting is one of the components of monitoring the activities of a company in the field of retail trade. Here is the basic information:
- Amounts set by the company in excess of the purchase price of the goods in order to profit from the activities carried out.
- Discounts provided by suppliers to sellers - for possible loss of products or reimbursement of transportation costs.
Attention! With each change in sales prices, information must also be displayed on account 42.
sch. 42 Trade margin is passive. The loan displays information on the amount of amounts established by the organization in excess of the purchase price for goods sold when posting purchased assets from suppliers. When products are sold or written off due to various situations(damage, marriage, natural loss) the amount of the displayed trade margin is canceled from the credit account. 42 in correspondence with the relevant accounts (for example, 90 "Sales").
The amount of the approved discount (markup) on the balance of the products of enterprises operating in the retail trade that were not sold in the period under review can be calculated on the basis of a percentage. The interest, in turn, is defined as the ratio of amounts in excess of the purchase price, accrued on the balance of products at the beginning of the month (credit balance account 42) plus credit turnover account. 42, to the total amount of goods sold in the period (accounted for at selling prices) and the final balance of products in the warehouse at the end of the month (Dt account 41).
Analytical monitoring
The main purpose of the use of 42 - ensuring a separate display of the amounts of markups set by retail organizations for products sold.
Attention! Account 42 is used exclusively in organizations that record purchased goods on account 41 at sales prices.
Normative base
Use of account 42 to display information on the amounts accepted by companies in excess of the purchase price for the goods being sold in order to benefit from activities, is carried out in accordance with the current Chart of Accounts approved by Order of the Ministry of Finance dated October 31, 2000 No. 94, PBU 5/01 “Accounting for inventories » and other legally approved documents.
The main entries in accounting for the use of account 42
- Displaying the established markup by retailers when posting products received from suppliers in selling prices
- Reversing Approved Markup Records
Dt 44 Kr 42 - for goods used to cover the organization's own needs.
Dt 90.02 Kr 42 - for sold products
Dt 94 Kr 42 - for assets retired due to shortages identified during the inventory, or damage.