USA Posting Profit and Loss with a Journal Entry

Joined
Mar 23, 2023
Messages
1
Reaction score
0
Country
United States
I have a client that we post monthly their profit and loss via a journal entry. What account do you use for net income?
 

DrStrangeLove

VIP Member
Joined
May 27, 2022
Messages
173
Reaction score
28
Country
United States
I don't think net income is a postable account. Net income is part of the presentation of the income statement, but it's not an account per se. It falls out of the total of journal entries that affect income statement accounts.

I'm not entirely clear from your description what your journal entry looks like. Maybe I'm misunderstanding your question. Are you posting one summary journal entry that's a total of the client's journal entries affecting their income statement accounts?
 
Joined
Sep 25, 2020
Messages
25
Reaction score
1
Country
United States
I have a client that we post monthly their profit and loss via a journal entry. What account do you use for net income?
Debit Revenue Account
Credit Income Summary Account

Credit Expense account
Debit Income Summary Account

Depending on The Income Summary Account, if the expense side is less than the revenue side than the Income Summary is increase, the opposite will decrease the Income Summary Account.
 
Joined
Apr 10, 2023
Messages
6
Reaction score
0
Country
United States
At the end of the accounting fiscal year, you would close the temporary accounts (revenue, expenses, and dividends accounts), using closing entries. The balance goes into the retained earnings account (showing how retained earnings increased or decreased due to net income / net loss and dividend payments.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Members online

No members online now.

Forum statistics

Threads
11,684
Messages
27,655
Members
21,542
Latest member
hireus4steamcleaning
Top