Retained Earnings: Why no balance in Chart of Accounts? Closing Entry details?

Hello there, @Real Estate Partners LLC.

I’d like this opportunity to share some information on how does QuickBooks Desktop handles retain earnings.

Retained Earnings account is an equity account that QuickBooks automatically adds to your chart of accounts when you set up a new company. QuickBooks uses this account to track profits from earlier periods that have not yet been distributed to owners.

At the beginning of a new fiscal year, QuickBooks automatically transfers the net income into your Retained Earnings account.

Since Retained earnings is from the Net Income of the Income and Expense accounts from *previous fiscal year*, it doesn’t track the running balance like Bank accounts. There’s no running balance from the Retained Earnings because this account is just a product of the net income which is the difference of the income and expenses from last fiscal year.

For additional insights, you may check out these articles:

• Year end guide and checklist
• Manage upfront deposits or retainers 

• Close your books in QuickBooks Desktop

Please don’t hesitate to click the Reply button if you have other questions about the information included on your Balance Sheet report. I’m always here to help.

Thanks for the explanation of the Retained Earnings account.  I was able to pull up the Net Income Detail report which included the exact information that I was looking for. It shows me the calculation to get to Net Income.  It seems to be a helpful report, but it's not showing up in the Report Center.  Where can I find that report? 

Should the equity accounts (Member Contributions and Member Draws) for a sole proprietorship be closed out also?  Right now after QB Desktop transferred my net income to RE, the expense accounts and income are still showing in the COA.  How do I get it to clear so expenses and income can be tracked for this next year?

Thank you, I see this in my balance sheet report. But this amount does not show up in my Profit and Loss statement. The net income when comparing the BS to the P&L if off by the amount of the "retained earnings". How do I include this in the P&L? Thank you!

Let me share some info about getting the Retained Earnings details in QuickBooks Online (QBO), @RW101.

Retained Earnings (RE) are the residual net profits after distributing dividends to the stockholders. Thus, to calculate this on the Balance Sheet (BS), you need three items as per the formula:

• Beginning period retained earnings (This can be found in the balance of the previous year, under the shareholder’s equity section on the liability side)
• Current year net profit/loss
• Dividends paid (cash and stock dividends)

For more info, check out this write-up: RE Formula: Definition, Formula, and Example.

This means that your current net profit/loss is only a part of the retained earnings on the balance sheet. This also indicates if there's a difference between the current RE amount and the net profit/loss. You may have entered transactions against this account that only affect the Balance Sheet. You can see these transactions on the account Quick Report. 

Here's how:

1. Go to the Gear icon, then select Chart of Accounts.
2. Locate the Retained Earnings account.
3. From the Action column drop-down menu, select Run Report.
4. From the Report period drop-down list, select All Dates.
5. Select Run report.

You can check out this article for more information about this: How to view Retained Earnings account details.

Fill me in should you need further assistance with calculating the retained earnings. I'm always here to help you.