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Chapter 19. Equity Accounts > The Retained Earnings Account

The Retained Earnings Account

The Retained Earnings account represents the business earnings that remain in the business. For example, if your company earns $50,000 in the current year and none of the earnings are taken out of the business, the $50,000 represents the retained earnings of the business.

Add a retained earnings account to your chart of accounts to keep track of prior business earnings on your balance sheet. At the end of each fiscal year, you then transfer your business earnings for the year from the Opening Balance Equity account to the Retained Earnings account, as described earlier in the section on “The QuickBooks’ Opening Balance Equity Account.”


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