Short-term debt is one of the important information in the balance sheet accounting and the business, investors are particularly interested in. However, not everyone understands all the items there. Let's AccNet learn about short-term debt, what is the? How to calculate the indicators in short-term debt just below this article, okay.
1. Learn about short-term debt, what is?
In the operation of business often appear short-term debt to rotate capital business. Short-term debt is defined and specified in circular 200 and accounting standards in Vietnam no. 18.1.1 the Concept of short-term debt, what is?
Short-term debt is the debt business is responsible for paying within a period not exceeding one year or in a production cycle, business casual. This is debt that during the production process business made loans to rotate round capital, such as accounts payable to suppliers of goods, raw materials, bank loans, short-term,... Short-term debts usually are business payment by assets, is often used up within a year. Current assets include cash or accounts receivable of clients.1.2 significance of short-term debt, what is?
In manufacturing operations, business, debt always arise more or less, the problem posed businesses need to good management of short-term debt to limit the risks of payment. So the meaning of short-term debt, what is the? Short-term debt actually intended to supplement funding for the production process, the business of business. Business must regularly monitor the debt and evaluate the possibility of payment in order to optimize cash flow, actively plan and solve problems quickly financially. Solvency is one of the plus points and attract more investors. On the other hand, liquidity is the most important criteria to banks, finance companies, assess the degree of credibility of the business in the loan capital investment.2. The account is ranked in the short-term debt of the business is what?
You just learn the concept and meaning of short-term debt, what is the? In most businesses today, the account is ranked in the short-term debt include:- Bank loans short term
- The salaries of workers
- Negotiable
- Corporate INCOME tax payable periodically
- The account other short-term
3. Accounts accounting short-term debts need to know
Short-term debt is shown in detail in the on-balance sheet accounting, accounts accounting short-term debt, what is the? Refer to the right table below.Account name short-term debt | Code | Content reflection | Data based on |
Liabilities short sellers | 311 | Reflect the amount of money must pay to the seller within a period not exceeding 12 months or the business cycle at the time of reporting | Based on balance Have an account 311 “pay to the seller” is listed details for each seller |
The buyer pays in advance short term | 312 | This item reflects the amount the buyer has paid in advance to purchase a product, service, fixed assets, real estate investment..., Business is obliged to provide within 12 months or a production cycle from the time of reporting | Based on the arising of account 131 “receivable of clients,” is open details for each customer |
Taxes and other payables to the state budget | 313 | The total amount of money that a business must pay to the state, including the taxes, fees and other debts | Based on the balance of account 333 “Taxes and other payables to the state budget” |
Payables to employees | 314 | Indicators reflect the total amount of business has not paid for the employee at the time of the report | Based on the balance of accounts 334 “pay employees” |
The cost to pay short-term | 315 | Reflect the outstanding payments due, received goods or services, but no invoice or the cost of the time the statements are not enough vouchers, records,... | Based on the balance of accounts 334 “pay employees” |
Pay internal short | 316 | Is accounts payable in business insider has a time limit within 12 months | The data of accounting is based on the balance of the account, 3362, 3363, and 3368 |
Pay-in-progress plan construction contracts | 317 | Reflects the expert deviation of the total amount of accumulated customer to pay in-progress implementation of the plan and the total number of cumulative revenue corresponding to the portion of work completed to the end of the reporting period | Based on the balances of accounts 337 “payment-in-progress construction plans” |
Unearned revenue short-term | 318 | Reflect the revenue has not made corresponding with the obligation to implement in the next 12 months or in a manufacturing business | Based on balance Have an account 3387 “unrealized revenue |
Other short-term payables | 319 | Reflect the debt other payables of the business in the next 12 months or within one production cycle and business | based on the balance of the accounts 338, 138, 334 |
Loan and debt finance lease short term | 320 | Is the sum of the loan liabilities of a business for banks, institutions, finance companies, with the term of payment within 12 months | Based on the balance of account 341 |
Prophylactic short-term payables | 321 | Reflect the reserves for the account to be paid within 12 months or in a production cycle and business. For example, prophylactic repair of fixed assets, preventive restructuring business,... | Based on balance have an account 352 “redundancy pay” |
Bonus, benefits | 322 | Reflect the fund, bonus, benefits have not yet used at the time of reporting | based on the balance of account 353 “bonus benefits” |
The price stabilization fund | 323 | Reflect the total price stabilization fund existing at the time of the report | based on accounts 357 “price stabilization Fund” |
Transactions of buying and selling bonds | 324 | Reflects the total value of government bonds of the seller not the end of the term of the contract of sale at the time of the report | Based on the balance of accounts 171 “traded bonds” |
4. Short-term debt increase or decrease mean?
You are clear on the meaning of short-term debt, what is theit reflects the situation of the financial health of the business. So, short-term debt increase or decrease is what?4.1 short-term Debt increase
When short-term debt increase is:- Short-term debt to pay suppliers increase: the reputation and relationships of the business with good partners.
- Taxes and charges payable to the state rising strong: The taxes paid based on the revenue and profitability of the business. This increase shows the company's earnings are increasing is a sign of good business.
- Pay for workers increase: this item increases expression of the scale, increase the resources of the enterprise. If the increase is not too large, does not correspond with the revenue can financial situation are having problems.
- Loan and debt finance lease boost: When this increase is the expansion scale mining areas of new business. However, businesses must pay attention if loans and financial leasing debts too large will affect the profitability of the company.
4.2 short-term Debt reduction
When short-term debt decrease is:- Businesses have to pay when buying goods: can see the trust and the relationship between business partners and not good. Business not be accepted late payment.
- Tax and payments on government reduction: can understand the business is active not good, not effective should tax payable state reduction.
- Account to pay the labor reduction: expressing the cut personnel, narrow-scale production and business.
- Loans and borrowings finance lease up: Business growth is slow and can be a sign of the deterioration, scale production and business't be extended.
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