You are looking at it correctly.
First the Self-Employment (SE) expenses are applied to SE income.
Then in your example, you would have a -$2,000 for SE net income which would be added to the other income on the return. So it would reduce that other income reported by $2,000.
Note: In the Self-Employed area you may see a "At Risk" question, you must be at risk to have a loss. What this means is that you actually have to pay for the expenses incurred to get the loss.
