Bookkeeping

Similarly, the end-of-period equity is the total equity at the end of the period under consideration. This is also derived from the balance sheet and includes the same components as the initial equity calculation. However, it reflects any changes that have occurred during the period, such as profits earned or losses incurred, dividends paid out, […]

Hence, retained earnings are the portion of a company’s net income that is set aside by the company for various operational purposes after dividend payments to its shareholders. Here, we shall discuss retained earnings, debit, and credit so that we can understand how the retained earnings are recorded and if they are debit or credit.