Current Year Profit
Code: 3321Account Information
| Financial Statement | Statement of Financial Position |
| Normal Balance | Credit |
Definition
Represents the net profit achieved during the current financial year before being closed to retained earnings. This account is closed to "Prior Years Retained Earnings" at year end.
Common Journal Entries
Dr. Income Summary
Cr. Net Profit Current Year
Dr. Net Profit Current Year
Cr. Dividends Payable
Dr. Net Profit Current Year
Cr. Retained Earnings
Dr. Net Profit Current Year
Cr. Legal Reserve
Dr. Net Loss Current Year
Cr. Income Summary
Dr. Retained Earnings
Cr. Net Loss Current Year
Dr. Legal Reserve
Cr. Net Loss Current Year
Dr. Share Premium
Cr. Net Loss Current Year
Dr. Income Summary
Cr. Net Profit Current Year
Dr. Net Profit Current Year
Cr. Dividends Payable
Dr. Net Profit Current Year
Cr. Retained Earnings
Dr. Net Profit Current Year
Cr. Legal Reserve
Dr. Net Loss Current Year
Cr. Income Summary
Dr. Retained Earnings
Cr. Net Loss Current Year
Dr. Legal Reserve
Cr. Net Loss Current Year
Dr. Share Premium
Cr. Net Loss Current Year
📐 IFRS vs US GAAP Accounting Treatment
GAAP is the same concept, with the same differences in the presentation of comprehensive income.
❓ Frequently Asked Questions
A: A temporary account used at period end to aggregate revenues and expenses and show net profit or loss before closing to retained earnings.
A: At year end, its balance (net profit) is closed to prior years retained earnings, or net loss is closed to retained earnings.