When receiving the advance payment from the principal:
Debit: bank deposit
Credit: accounts received in advance
When paying wages:
Debit: labor cost
Loan: wages payable to employees.
Upon completion:
Debit: accounts received in advance
Loan: income from main business
Parallel carry-over cost:
Debit: main business cost
Loans: labor costs
Companies with the nature of labor dispatch do not have the complicated cost accounting process as enterprises, and most of them are wage costs and a small amount of management expenses.
According to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Some Policy Issues concerning Business Tax, if a labor service company accepts the entrustment of an employer to arrange labor force for it, and the labor service company issues or handles labor wages and social security payments for the labor force, the turnover shall be the total price charged by the labor service company from the employer minus the wages collected and transferred to the labor force and the balance after handling social security for the labor force (the basis for calculating business tax).