Basic Accounting Knowledge: Allowance For Additional Accounts

Provision of additional accounts depends on the direction of adjustment of accounts. Different An account used to reduce the balance of the adjusted account or to add an adjusted account balance to obtain the actual balance of the adjusted account.

When adjusting the balance of the account and the adjusted account balance In the same direction, the account has the function of additional account, and the adjustment way is the same as the additional account. For example, when the material is planned according to the planned cost, it is necessary to set up the account of material cost difference. The account is the allowance for the raw material account, and the material cost variance account is "raw material" when the actual cost is planned for the big day. account An additional account; when the actual cost is less than the planned cost, the material cost variance account is the account of the raw material account. The algebraic sum of both is the actual amount of raw material.