According to the Provisional Regulations of the People's Republic of China on Enterprise Income Tax and its detailed rules for implementation: The payment of enterprise income tax is calculated annually, with monthly or quarterly prepayments. Prepayments must be made within 15 days after the end of each month or quarter, and a final settlement must be conducted within four months after the end of the year, with overpaid taxes refunded and underpaid taxes supplemented. At the same time, the "Regulations" and "Detailed Rules" established a "tax adjustment system," meaning that where there are provisions in the laws, regulations, and policies concerning enterprise income tax, they shall be implemented according to the tax law; where there are no provisions, they are generally implemented according to the financial accounting system. When there are inconsistencies between tax laws and financial accounting systems, adjustments must be made to the pre-tax accounting profits of enterprises according to the provisions of the tax law when calculating and paying enterprise income tax. Enterprises should pay attention to the differences between tax laws and accounting regulations. When filing annual enterprise income tax returns, only the tax return forms need to be adjusted without adjusting the accounts. However, after the final settlement and payment, the necessary account adjustments must be made regarding any accounting treatments found by the tax authorities to violate the unified national accounting system. Otherwise, it may result in falsification of accounting information, causing enterprises to pay taxes repeatedly or evade taxes.
In general, if an enterprise's accounting treatment violates the financial system regulations and affects the gains and losses of previous years, adjustments must be made through the "Adjustment of Gains and Losses of Prior Years" subject. This subject adjusts decreases on the debit side...