99 account - "Profit and Loss". Debit and credit of account 99

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

Accounting accounts are designed to record all monetary transactions in them. In this review, 99 Profit and Loss account will be considered in detail. The reader will learn about what functions it performs, whether it can have its own categories, how to work with it and close it. The information is accompanied by examples that help to better understand the topic.

Destination of account 99

Each company works to achieve the main goal - increasing profits. The financial result is the sum of all income from each type of activity. To sell goods or services, you will need to invest money, but how profitable it will be in the reporting period will become known after summarizing all the information on cash costs and receipts. This is what account 99 is intended for, which may reflect:

• increase or decrease in income from the main activity (D90 K99);
• balance of other expenses and income for the reporting period (D91 K99);
• the impact of emergencies on the economicactivities (force majeure, accidents);
• calculation of amounts intended for tax calculation (interaction with account 68).

Is it possible to open new sub-accounts?

According to the instructions, the account in question has no categories. The accountant can independently create them, taking into account the requirements of the enterprise (analysis, control, reporting). In this regard, for example, such a system can be introduced:

• 99/1 "Profit or loss from the sale of goods";
• 99/2 "Remains of miscellaneous income (expenses)";
• 99/3 "Surprise Income";
• 99/4 "Unexpected expenses";
• 99/5 "Income Tax";
• 99/6 “Tax Contributions.”

The last three sub-accounts can have debit and credit balances. You can also open category 99/9 "Net profit or loss", which will show the amount of receipts (deductions) received for the reporting period.

Debit Correspondence

99 account can interact on debit with different categories:

• "Fixed assets" (01).
• "Profitable investments in MC" (03).
• "Devices to install" (07).
• "Contributions to non-current assets" (08).
• "Materials" (10).
• "Animals for cultivation and feeding" (11).
• "Change in MC cost" (16).
• “VAT on acquired valuables” (19).
• "Main production" (20).
• "Overall production and general business costs" (25, 26).
• "Defectiveproducts” (28).
• “Commercial products” (41).
• "Currency and settlement accounts" (52, 51).
• Home-made semi-finished products (21).
• Cashier (50).
• "Finished Goods" (43).
• "Auxiliary production" (23).
• "Shipped products" (45).
• "Service shops and farms" (29).
• "Costs for the sale of goods" (44).
• "Cash investments" (58).
• "Settlements with the state budget and social insurance (security)" (68, 69).
• “Financial transactions with accountable persons, as well as employees for remuneration and other procedures” (69, 70, 73).
• "Retained earnings" (84).
• "Product sales" (90).
• "Other income and expenses" (91).
• "Deferred Costs" (97).
• "On-farm settlements" (79).
• "Financial transactions with creditors and debtors" (76).

What could be the postings

The debit of account 99 reflects the losses of the enterprise for various activities. Examples of business transactions can be found in the table.

D99 K07	Damage to installation equipment due to unpredictable events (fire, hurricane, natural disaster, etc.).
D99 K09	Deferred tax assets written off.
D99 K20	Primary production costs for canceled orders charged toloss.
D99 K19	The amount of VAT on MC (material assets) has been written off.
D99 K21	Production losses due to unpredictable events.
D99 K28	Reflecting costs from marriage.
D99 K41	Loss of finished goods.
D99 K51	Loss on current account.
D99 K68	Charging income tax.
D99 K25	Damage from canceled orders charged to general business expenses.
D99 K93	Identification of the balance of insurance premiums.
D99 K96	Amounts intended for deductions to the fund for preventive measures have been determined.

Loan Correspondence

Account 99 “Profit and Loss” interacts on a loan with the following categories:

• "Materials" (10).
• "Financial transactions with suppliers and contractors" (60).
• "Currency and settlement accounts" (52, 51).
• "Retained earnings" (84).
• "Sale of goods" (90).
• "Shortage and damage from damaged valuables" (94).
• "Reserves for future expenses" (96).
• "Special bank accounts" (55).
• "On-farm calculations" (79).
• "Financial transactions with creditors and debtors" (76).
• "Other expenses and income" (91).
• "Settlements with employees for various operations" (73).

Loan operations

The table shows some examples to help you understand what a 99 credit posting account may have, reflecting the profit (income) of a company.

D10 K99	Detection of excess materials.
D50 K99	Receipt to the cashier of income from unexpected situations.
D52 K99	Credited to a foreign currency account of profits.
D96 K99	Attribution of the excess amount intended for the repair of fixed assets to the results of the reporting period. A similar exception is provided for in some enterprises.
D90/9 K99	Reflection of financial result from intermediary activity (account 99 credit characterizes income).
D90 K99	Write-off of profits from the main activities of the organization.
D95 K99	Identification of balances of insurance reserves.
D84 K99	The closing entry of the last month in the reporting period, which writes off the amount of the net loss.

Features of closing 99 accounts aboutincome statement

The result of the company's activities in monetary terms is reflected when comparing debit and credit turnover. In this regard, it is required to close some accounting accounts (99, 90, 91). In the conditions of modern production, it is very important to correctly determine and economically justify the procedure in question. For the competent performance of tasks, a specialist must be guided by a special rule. First of all, you should close the accounts of industries and companies with the largest number of clients receiving the least number of counter services, and in the opposite situation - last (maximum services and minimum buyers).

Sequence of closing 99 accounts

The operation in question is carried out according to the following algorithm:

1. Closing account 90 "Sales of products". Comparing income and expenses from sales, you can form the final result from the main activities of the company. At the end of the year, the debit reflects the actual cost of goods sold, taking into account all costs. The amount of the sale is formed on the loan. The final value is equal to the difference between the balances on the credit and debit of accounts 90 and 90/3 "VAT". If the debit balance is greater than the credit, make the following posting: D99 K90 (loss), otherwise - D90 K99 (profit).
2. On account 91, the same operations should be carried out as in the first stage. With negative financial results, posting D91 K99 and D99 K91 with positive.
3. Thus, the closing of the 99th account is carried out inlast turn. The result, which was formed when comparing the debit and credit balances of accounts 90 and 91, is retained earnings remaining at the disposal of the organization, or an uncovered loss. The results are credited or debited to account 84.

The final completion of the procedure is carried out by the gradual curtailment of distributive and expense accounts. This allows you to create a preliminary working balance that reflects the real financial situation of the organization.

Knowing all the distinctive features that the 99 Profit and Loss account has, young professionals will be able to understand all the features of accounting. Do not forget about PBU, as well as legal reference systems, without which the legal activity of enterprises is impossible.