How to write the accounting entry of carry forward profit and loss
Carry forward gain/loss refers to the process in which the balance of gain/loss accounts will all be carried forward to "Profit of the Current Year" at the end of the period. After carrying forward, the balance of the gain/loss account will be zero. How to prepare accounting entries for carrying forward gain/loss?
Accounting entry of profit and loss carried forward
1. When carrying forward income:
Debit: main business income
Other business income
Non operating income
Credit: Profit of this year
2. When carrying forward costs, expenses and taxes:
Debit: Profit of this year
Credit: main business cost
Taxes and surcharges
Other business costs
selling expenses
Administrative expenses
Financial expenses
Non operating expenses
Income tax expense
Debit: Profit of this year
Credit: asset impairment loss
3. Annual profit distribution carried forward:
Net profit realized in the current year after offsetting the income and expenditure of the current year
Debit: Profit of this year
Credit: profit distribution - undistributed profit
In case of loss:
Debit: profit distribution - undistributed profit
Credit: Profit of this year
Profit distribution refers to the distribution of the total profits realized by an enterprise and the profits obtained from the associated units within a certain period (usually the year) between the state and the enterprise, and between enterprises according to regulations.
How to understand the profit of this year?
The profit of this year is an equity account. The debit represents the loss of this year, and the credit represents the profit of this year. When an enterprise closes accounts every month, it transfers all the balance of profit and loss accounts into the "Profit of the Current Year" account, and uses the "Profit of the Current Year" account to carry out the total profit or loss of the current month, as well as the cumulative profit and loss of the current year. When transferring the balance of all revenue accounts into the "Profit of the Year" account, debit the "Main Business Income", "Other Business Income", "Investment Income", "Non business Income" and other accounts, and credit the "Profit of the Year" account. When transferring the balance of all expenditure accounts to the "Profit of the Year" account, debit the "Profit of the Year" account and credit the "Tax and Surcharges", "Main Business Cost", "Other Business Expenses", "Administrative Expenses", "Financial Expenses", "Non operating Expenses" and other accounts.
