The question of making up the deficit of the surplus reserve, what does it mean to make up the defic

Hello friends, in fact, take a look at the accounting treatment of the secondary accounts under the profit distribution, then, in the end, all the secondary accounts must be carried forward to the profit distribution under the undistributed profit account, and the other secondary accounts have no balance after the carryover! Therefore, after the surplus reserve makes up the loss, the final impact is the undistributed profit, and the surplus reserve decreases, then the loss part of the undistributed profit also decreases, and on the other hand, the undistributed profit increases, so one increase and one decrease, does not affect the retained earnings. Here's an example:

Use 500 yuan of surplus reserve to make up for the loss) Borrow: surplus reserve 500 (decrease 500) Credit: profit distribution Surplus reserve to make up for the deficit 500 (increase 500) Borrow:

Profit distribution surplus reserve to make up for the deficit 500 (carry-over, decrease 500) Credit: profit distribution Undistributed profit 500 (increase 500) This question actually needs to understand the final result of accounting treatment, especially the final attribution of the secondary account under profit distribution, that is: undistributed profits are happy.

1. Retained earnings = surplus reserve + undistributed profit 2. Undistributed profit = current year's profit + profit distribution Accounting entries for making up for losses with surplus reserves: borrow: surplus reserve loan:

Profit Distribution - Surplus Reserve Compensation Deficit Why does the use of surplus reserve to make up the deficit not affect the change in retained earnings? From the formula, it can be concluded that the increase and decrease on the right side of formula 1 do not affect the retained earnings.

Surplus reserve is the accumulation of the previous net profit, the purpose of enterprise accumulation is to cope with future difficulties and crises, so the surplus reserve is mainly used to make up for losses, distribute dividends and transfer capital, when the surplus reserve makes up for the loss, the surplus reserve will be reduced, the unmade loss will be reduced, and the accounting entries are:

Borrow; Surplus reserve.

Credit: Profit Distribution - Other Transfers.

The losses incurred by the enterprise need to be compensated, and the ways to make up for the losses are:

1.Generally, the pre-tax profit of the following year is used to make up for it, and if it has not been made up for 5 consecutive years, it can only be made up with after-tax profit after 5 years.

2.If you still lose money in the following years, or if you still can't make up the loss even if you make a profit, you can consider using the surplus reserve or capital reserve to make up the deficit (but the capital reserve cannot make up the deficit from 06 onwards).

Surplus reserve is the accumulation of the previous net profit, the purpose of enterprise accumulation is to cope with future difficulties and crises, so the surplus reserve is mainly used to make up for losses, distribute dividends and transfer capital, when the surplus reserve makes up for the loss, the surplus reserve will be reduced, the unmade loss will be reduced, and the accounting entries are:

Borrow; Surplus reserve.

Credit: Profit Distribution - Other Transfers.

Retained earnings = surplus reserve + undistributed profits.

Surplus reserve to make up for the deficit refers to the net profit accumulated in the past to make up for the loss, because when the surplus reserve makes up for the loss, the surplus reserve will be reduced, and the uncovered loss will be reduced.

When an enterprise incurs a loss, it should be made up by the enterprise itself. There are three main ways to make up for losses:

The first is to make up for it with the pre-tax profit of the following year. According to the current system, when an enterprise incurs a loss, it can make up for it with the pre-tax profit realized in the next five years, that is, the period during which the pre-tax profit makes up for the loss is five years.

The second is to make up for it with the after-tax profit of the following year. If the losses incurred by the laughing selling enterprises are not fully made up after five years, the losses that have not been made up shall be made up by the profits after applying income tax.

The third is to make up for losses with surplus reserves. When an enterprise makes up for its losses with the surplus reserves withdrawn, it shall be proposed by the board of directors of the company and approved by the late meeting of Li Dong Dazao.

1. When an enterprise uses surplus reserves to make up for losses, accounting entries:

1. When the enterprise uses surplus reserves to make up for losses:

Borrow: surplus reserve.

Credit: Profit Distribution - Surplus Reserve to Make Up for Deficit.

2. When carrying forward the surplus reserve at the end of the year to make up for the loss:

Borrow: Profit distribution - surplus reserve to make up for losses.

Credit: Profit Distribution - Undistributed Profits.

2. If there is still a loss in the following years, or even if the profit is still not made up, the surplus reserve can be considered to make up for the loss;Surplus reserve is the accumulation of previous net profits, the purpose of enterprise accumulation is to cope with future difficulties and crises, so surplus reserve is mainly used to make up for losses, distribute dividends and increase capital, when surplus reserves make up for losses, surplus reserves will be reduced, and unmade losses will be reduced.

1.Example 11-25: In 2004, ABC Company used 800,000 yuan of arbitrary surplus reserve to make up for the loss of the previous year. Make the following accounting entries:

1) Recorded in the sub-ledger of "profit distribution - other transfers".

Debit: Surplus Reserve 11 Discretionary Surplus Reserve 800000 Credit: Profit Distribution 11 Other Transfer 800000

2) Carry forward the detailed account of "profit distribution - undistributed profits".

Debit: Profit distribution - one by one other transferred to 800,000

Credit: Profit distribution - undistributed profit 800,000

2.Example 11-26: Company H, a foreign-invested enterprise, was approved to use reserves of 100,000 yuan in 2004 to make up for its losses. Make the following accounting entries:

1) Recorded in the sub-ledger of "profit distribution - other transfers".

Debit: Surplus reserve 100,000 reserves

Credit: Profit distribution one by one other transferred to 100,000

2) Carry forward the detailed account of "profit distribution - undistributed profits".

Debit: Profit distribution one by one other transferred to 100,000

Credit: Profit distribution - 100,000 undistributed profits

Surplus reserve to make up for losses refers to the use of surplus reserve funds to make up for the losses of enterprises. Surplus provident fund includes statutory provident fund and optional provident fund. The company's surplus reserve fund can be used to cover losses, expand the company's operations and increase share capital.

Surplus reserve belongs to the owner's equity account, and from the balance sheet, the assets plus liabilities of the enterprise are equal to the equity. From the perspective of corporate management, enterprises use these assets (from creditor input and shareholder investment) to produce and operate and create profits. The realized operating profits, first pay the interest owed to creditors, and then pay income tax, one part of the after-tax profits retained by the enterprise to form the company's surplus reserve and undistributed profits, and the other part is distributed to shareholders in the form of dividends (called dividends for listed companies).

When the company has after-tax profits, according to the law, it needs to withdraw the statutory reserve fund according to 10% of the after-tax profits, of course, if the cumulative amount of the statutory reserve fund withdrawn by the enterprise has exceeded 50% of the company's registered capital, it does not need to be withdrawn.

In addition to withdrawing the statutory provident fund, the company can withdraw any provident fund at its own discretion, and there is no statutory requirement for the discretionary provident fund, whether to withdraw it, and how much to withdraw, the company decides at its discretion.

When an enterprise has a loss, the first consideration is to use the pre-tax profit of the following year to make up for the loss, under normal circumstances, the tax law allows the maximum deficit period not to exceed 5 years, the 5 years is a continuous year of the concept, but for some high-tech enterprises and technology-based small and medium-sized enterprises have a certain extension, here will not be too much description. Then consider the after-tax profit to make up the deficit or the surplus reserve to make up the loss.

When an enterprise uses surplus reserves to make up for losses, the accounting entries involved are:

Borrow: surplus reserve.

Credit: Profit Distribution - Surplus Reserve to Make Up for Deficit.

Year-end loan: profit distribution - surplus reserve to make up for losses.

Credit: Profit Distribution - Undistributed Profits.

From the entries, it can be seen that the surplus reserve is only the conversion of the internal accounts of the owner's equity, and the total owner's equity has not changed.

In addition to making up for losses, the surplus reserve can also expand the company's operations, such as investing in plant construction, purchasing equipment, etc.; At the same time, it can also be converted into equity capital, and the conversion between the owner's equity will only affect the internal structure of the owner, and the share capital or paid-in capital will increase, and the retained earnings will decrease.

Accounting entries are also known as "accounting formulas". Abbreviated as "entries". It is based on the principle of double-entry accounting, and lists the corresponding accounts of both parties and their amounts for each economic transaction.

How to write accounting entries for covering losses with surplus reserves.

Borrow: surplus reserve.

Credit: Profit Distribution - Surplus Reserve to Make Up for Deficit.

Borrow: Profit distribution - surplus reserve to make up for losses.

Credit: Profit Distribution - Undistributed Profits.

Method: Accounting entry chromatography.

Tomography refers to a method of solving problems that divides the development process of things into several stages and levels, and analyzes them layer by layer, so as to finally obtain results. The use of tomography to compile accounting entries is intuitive and clear, and the ideal teaching effect can be obtained, and the steps are as follows:

1. Analyze and list the accounting subjects involved in economic business.

2. Analyze the nature of accounting accounts, such as asset accounts, liability accounts, etc.

3. Analyze the increase and decrease of the amount of each accounting account.

4. According to the steps, the direction of the accounting account is judged in combination with the economic content (increase or decrease) reflected by the borrower and borrower of various accounts.

5. Prepare accounting entries according to the bookkeeping rules that there must be loans and loans must be equal.

This method is very effective for students to know exactly the accounting subjects involved in the accounting business, and is more suitable for the preparation of individual accounting entries.

Accounting entries business chain method.

The so-called business chain method refers to the formation of a continuous business chain according to the sequence of accounting business, and the preparation of pure return of accounting entries between the accounting entries before and after the business.

This method is more effective for continuous economic business, especially for the direction of bookkeeping that is easy to be mistaken.

Accounting entries bookkeeping rules method.

The so-called bookkeeping rule method refers to the use of bookkeeping rules "there must be a loan, and the loan must be equal" to prepare accounting entries.