Accounting glossary
What is retained earnings?
The accumulated profits a business has kept rather than paid out — every prior year's net income, netted of dividends, rolled into equity. It is the balance-sheet memory of the P&L's history.
Example
A business earns $24,700 and pays out nothing. Retained earnings rise by $24,700 — profit kept in the business rather than distributed.
It is a cumulative figure: several profitable years build it, and a loss year reduces it.
In SeroBooks
The year-end close posts the roll and locks the year behind it. Year-end close →
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