The financial expense of the income statement is negative, which means that the enterprise has more interest on deposits, and the interest income is greater than the interest expense. It shows that the enterprise has almost no loans, almost no interest expenses, and there is not much discount on the current notes receivable.
In general, the financial expenses in the income statement are positive, indicating that the expenses are greater than the revenues, that is, the total amount of interest, handling fees and exchange losses of the enterprise is greater than the total amount of deposit interest and exchange income.
If the income is greater than the expenditure, it is negative in the income statement and is stated as a negative number.
Financial expenses are period expenses, which are expenses that are directly included in profit and loss in the current period, and are an important part of the expenses incurred by the enterprise in the current period.
The various financial expenses incurred by the enterprise shall be debited to "financial expenses" and credited to "bank deposits", "withholding expenses" and other accounts; When an enterprise incurs interest income and exchange gains, it debits "bank deposits" and credits "financial expenses".
At the end of the month, when the expenditure is greater than the income, all the financial expenses collected by the debit side will be transferred from the credit side to the debit side of the "profit of the year" account and included in the profit or loss of the current period. When income is greater than expenditure, make reverse accounting entries.
After the current financial expenses are carried forward, there is no balance at the end of the period in the G/L account of Financial Expenses.
For example, in September 2023, an enterprise incurs interest income of 1,250 yuan, remittance handling fee of 450 yuan, discounts the unexpired acceptance bill to the bank of 20,000 yuan, and discounts the interest of 200 yuan.
Make the following accounting entries:
1. Borrow: bank deposit 1250
Credit: Finance Fee 1250
2. Borrow: financial expenses - handling fee 450
Credit: Bank deposit 450
3. Borrow: bank deposit 18000
Debit: Finance fee 200
Credit: Notes receivable 20000
At the end of the month, after collecting financial expenses, the debit is 650, the credit is 1250, and the balance is 600 on the credit side, that is, the interest income is greater than the expenditure, and the difference is 600 yuan.
Carry-forward profits: 4. Debit: financial expenses 600
Credit: Profit for the year 600
There is no balance in the G/L account, and it is cleared.
When filling in the income statement, the column of financial expenses is negative, minus 600 yuan.