Changes in Retained EarningsFund Balance Auditor State Oh Form

Instructions and help about Changes In Retained EarningsFund Balance Auditor State Oh

in this video we're going to discuss things that affect the retained earnings account or if the firm doesn't have any retained earnings this would also apply to the accumulated deficit account because accumulated deficit is just what we call retained earnings when it has a debit balance so the three most important things that are going to affect retained earnings are net income net loss and dividends so net income which just occurs when the firm has more revenues and expenses is going to be added to it's gonna be edits the plus sign here this is going to be added to the retained earnings account a net loss on the other hand is going to be subtracted from retained earnings it's gonna make retained earnings lower now if the firm issues certain types of dividends that is going to reduce the retained earnings account as well for example if the firm pays cash dividends to its shareholders what it's doing is saying look we're not retaining earnings we're giving them back we're giving back ea