asset equity
Neither. Retained Earnings falls in the Equity section of the Balance Sheet.
assets
Retained earnings are non distributed profit part and hence a liability of the company to payback to the owners of company on case of dissolution that's why retained earning is liability and not the asset.
Retained earnings is that part of profit which is not distributed to the share holders so it is the liability of the business towards its owners and that's why like all liabilities it is also the liability of business and shown in balance sheet.
Sales is generally considered "Revenue" or "Income" and therefore are an Owners Equity Account. Sales affect Retained Earnings and Retained Earnings affects Owners Equity.
Neither. Retained Earnings falls in the Equity section of the Balance Sheet.
assets
Retained earnings are non distributed profit part and hence a liability of the company to payback to the owners of company on case of dissolution that's why retained earning is liability and not the asset.
Retained earnings is that part of profit which is not distributed to the share holders so it is the liability of the business towards its owners and that's why like all liabilities it is also the liability of business and shown in balance sheet.
Sales is generally considered "Revenue" or "Income" and therefore are an Owners Equity Account. Sales affect Retained Earnings and Retained Earnings affects Owners Equity.
retained earnings an asset?
An owner's draw account is not an asset account, but an equity account. It is grouped with other equity accounts, like the owner's investment, and retained earnings.
Assets are increased with a debit and decreased by a credit. Retained earnings is a credit, as they are an owners equity account and increase with credit.Retained earnings is what a company has after all expenses and dividends (if applicable) are paid. Retained earnings is shown on the Statement of Retained Earnings and is a credit which increases OE.
A transaction that only affects asset and/or liability accounts would have no impact on Retained Earnings. Such as paying an Accounts Payable invoice or receiving payment of an Accounts Receivable.
asset equity
Retained Earnings in BS. There are to terms in Finance Net profit and Retained Earnings. Net profit which is earned during the year from the business transactions. where the Retained earnings is carried over from the business over the period of time. which stays either asset or liability side of the balance sheet. Every year the Net profit/Loss is added to the Retained earnings account which is carried forward to the next year and Net profit account is become 0 at the end of the year.
asset liability