Into which account should the income from entrepot trade be recorded? Come and help me answer it!
Solved#Entrepot trade#
Our company has recently carried out entrepot trade business, and I'm not quite clear about which accounting subject the income from entrepot trade should be recorded into. Our company mainly purchases goods from overseas and sells them directly to other overseas customers without passing through the territory of our country. Should the income generated in this situation be recorded into the main business income, other business income, or is there any other suitable account? I hope that professional people can help me answer this question so that I can accurately handle the accounting affairs.
Professional consultant answers
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
The income from entrepot trade should usually be recorded into the "Main business income" account. This is because if the entrepot trade is the main business of the company, from the perspective of accounting principles, its income conforms to the definition of main business income. Main business income is the income obtained by an enterprise through its main business activities. Since the entrepot trade is the main business carried out by the company, the relevant income should be accounted for here. This helps to accurately reflect the operating results and scale of the company's core business. Meanwhile, in the financial statements, recording it into the main business income can enable investors, creditors and other users of financial statements to clearly understand the main profit sources of the company. From the tax perspective, recording it into the main business income and declaring and paying taxes normally according to relevant tax policies also facilitates the supervision of the tax authorities and the tax treatment of the enterprise.
Of course, if the entrepot trade only occurs occasionally and is not the main business direction of the company, it can also be considered to be recorded into "Other business income", but generally speaking, it is more appropriate to record it as the main business income.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
If the entrepot trade is the main business in the business scope of the company's business license, then it should be recorded into the main business income. If it is just this kind of business done incidentally and is not the core business, it is also acceptable to record it into the other business income. For example, in Zhongshitong, if the entrepot trade is its core business, the income will be put into the main business income.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
The key to judging which account to record into depends on the nature of the business. If the entrepot trade is carried out continuously and on a large scale and has a great impact on the company's profitability, it should be recorded into the main business income; if it is only a short-term and small-scale attempt and has a small impact on the profitability, it should be recorded into the other business income.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
In addition to considering the priority of the business, we also have to look at the size of the income amount. If the proportion of the income from entrepot trade to the total income is high, it should be recorded into the main business income; if the proportion is low, the other business income is more appropriate, which is convenient for accounting and analysis.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
It can also be combined with the cost accounting method. If the entrepot trade has a special cost accounting system similar to that of the main business, it should be recorded into the main business income; if the cost accounting is simple, it can be recorded into the other business income.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Considering the clarity of the financial statements, if the entrepot trade is closely related to the main business, it should be put into the main business income; if it is relatively independent, it should be recorded into the other business income to make the statements clearer.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
You can refer to industry practices. Look at how companies in the same industry handle the income from entrepot trade. If most of them record it into the main business income, your company can do the same, which is convenient for industry comparison and analysis.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
We also have to look at the business positioning of the management. If the management regards the entrepot trade as a key development business, it should be recorded into the main business income; if it is just a supplementary business, it should be recorded into the other business income.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
From the perspective of internal assessment, if the performance of the entrepot trade is included in the main assessment indicators, it should be recorded into the main business income; if it is not included, the other business income is sufficient.