I'd be pleased to help share some information regarding Retained Earnings and Net Revenue in QuickBooks Online, HelenG1.
Retained Earnings (RE) is the amount of net revenue left over for the business after it has paid out dividends to its shareholders. A business generates earnings that can be positive (profits) or negative (losses). That is, it's money that's retained or kept in the company's accounts.
If you require more information about this, I'd suggest consulting an accountant. They can provide more expert advice regarding an accounting perspective.
The balance sheet's retained earnings for this year is the last year's Profit and Loss (Statement of Financial Activity). You may want to pull up and run the balance sheet (Statement of Financial Position) report and consider the following pointers to evaluate the amount of retained earnings that the company has:
- Age of the company: An older company will have had more time in which to compile more retained earnings.
- Dividend policy: A company that routinely issues dividends will have fewer retained earnings.
- Profitability: A high-profit percentage eventually yields a large amount of retained earnings, subject to the two preceding points.
You can go through this article to know more about how opening balance equity works in QuickBooks: Understanding the Opening Balance Equity Account. It contains in-depth details on why you have retained earnings as well as tips to review your transactions.
If there's anything else you need or have follow-up questions in mind, please let me know. I'm here to provide additional assistance and more than willing to lend you a hand. Have a good one.
