Retained Earnings - ENGAGE CPAs

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  • Опубликовано: 13 окт 2024
  • We talked all about the big headings, assets, liabilities, equity, but let's break those down a little further. We're going to dive into some accounts, let's talk about the last equity account on the balance sheet RETAINED EARNINGS.
    Textbook Definition: Retained earnings consist of a business's earnings since it was formed, minus the amount that was distributed to owners as dividends/distributions. In other words, retained earnings is the amount of earnings that the stockholders are leaving in the business to be reinvested.
    Definition You Need to Know: Retained earnings represent your stake in the business at any given time. Negative retained earnings means that your liabilities in the business are more than your assets in the business, make it goal #1 to never have negative retained earnings/equity.
    Where are they on my financials? Retained Earnings is an equity that shows up on the balance sheet.

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