Retained Earnings

Hey there, Ensobila. I'm here to provide some information regarding the negative retained earnings you're seeing in your report. 

In QuickBooks Online (QBO), retained earnings is an Equity account that represents the company's profits to be reinvested or used later. It is the cumulative net income of a company that is kept by the company at a particular time. If the retained earnings are negative, it means that the balance of retained earnings appearing on the balance sheet under the stockholder's equity is negative.

Negative retained earnings happen when a company's losses exceed its starting retained earnings balance. On the Balance Sheet, for the current year, you will see the Net Income. For prior fiscal years, you will see it as Retained Earnings.  To check your Retained Earnings, you can search it in the Chart of Accounts. Kindly follow these steps: 
 

1. Go to the Gear icon located at the left navigation panel. 
2. Under the Your Company column, click the Chart of Accounts. 
3. In the search bar, type Retained Earnings and double-click it
4. You may customize it according to your preference. 

In addition, I recommend reaching out to your accountant regarding the financial details that could affect your report. Their expertise and guidance can help you resolve this matter. 

You can also utilize these articles to learn more about retained earnings: 

• How to View Retained Earnings Account Details?
• Retained earnings and how to calculate them

Furthermore, you may want to learn about the chart of accounts in QuickBooks Online. 

The comment section is always open for any additional questions or information you may have regarding any QuickBooks-related topics. We'll be right here to assist you.

Hi IrizA,

Thank you for your response. Unfortunately, I have already followed your suggestion to review and check the Retained Earnings account. I'm trying to identify the specific factors contributing to the negative retained earnings and find the best solution to resolve the issue.

Best regards,

I am also encountering the same issue, when I go to my chart of account, I see a 0 balance in QuickBooks , but in my trial balance, Profit& loss statement, you will see a retained earning balance. The worst is that the line item is not active like others to view the content or when the transaction occurred.

Hello there, Chioma. Let me share some details about retained earnings.

Retained Earnings are the accumulated profits of a company after dividends have been paid out. QuickBooks automatically updates this account at the end of each fiscal year by adding the net income or deducting any losses from the previous year's balance.

To fix this, verify the retained earnings account status. Ensure that the Retained Earnings account is not hidden or inactive. Sometimes, accounts may be hidden if they have a zero balance or are not used frequently. Check the account settings to confirm its status.

After that, run a Balance Sheet report to view the Retained Earnings balance. This will help confirm if the balance is accurate and if there are any discrepancies between the Balance Sheet and the Trial Balance.

Also, look for journal entries that might have affected the Retained Earnings account. You can do this by running a General Ledger report or checking the Journal entries for adjustments to Retained Earnings.

If discrepancies are found, you may need to create a journal entry to adjust the Retained Earnings account. This involves debiting or crediting the account to ensure it reflects the correct balance.

Let me know if you need more help with your QuickBooks transactions. I want to ensure everything is taken care of for you.