Oliver S. answered • 10/07/21
MBA Grad for Business and Finance
The retained earnings at the end of a year will be carried over and become the “beginning” balance for the current year. Net income will increase the retained earnings and net loss will reduce it. The subtraction of dividends, when they are paid out, will reduce retained earnings. Retained earnings are the profit the company keeps at the end of an accounting period. The statement of retained earnings takes into account the difference in the beginning amount of retained earnings and the ending retained earnings which is then carried over to the balance sheet.
Oliver S.
Yes10/08/21
Lola P.
which question are you referring to? The one about how the opening balance is the same as beginning balance or that the beginning balance of the current year is the same as last year's ending balance.10/08/21
Oliver S.
Beginning year retained earnings is the same at previous years and is used to calculate current years10/08/21
Lola P.
Hello, and thank you, another question, would the opening balance of retained earnings be the same as the beginning balance? And just to confirm, so the beginning balance of the current year would be from last year's ending balance?10/08/21