399 - Net Profit or (Loss)

399 – Net Profit or (Loss)

Net Worth

Synopsis

Account 399

Debits

Credits

The balances at the year-end in the cost of sales accounts, the expense accounts, the other deductions account, and the current year estimated income tax account.
The net profit for the current year (transferred by closing entry).

The balances at the year-end in the sales accounts and the other income accounts.
The net loss for the current year (transferred by closing entry).

Remarks:

The balance in this account, after closing all accounts hereto, represents the net earnings or loss for the current year after provision for income taxes.

There should be no balance in this account at the beginning of the accounting year.

The profit during the year is determined by entering the "net of the balances" of all accounts on the financial statement.

At the end of the accounting year; if the business entity is a corporation, the net profit or loss (balance in this account) should then be transferred to Retained Earnings (Account 370); if the business entity is a limited liability company, a partnership, or a proprietorship, it should be transferred to Investments (Account 380).

Note: