Business Accounting and Bookkeeping
Accounts Payable
Financial Statements

What causes retained earnings in a company to increase?

Top Answer
User Avatar
Wiki User
Answered 2007-04-07 20:26:47

profits More specifically, profits that are not distributed to shareholders as dividends are maintained in the retained earnings section of the equity section of the balance sheet. For tax purposes, since dividends are after tax on the company and then taxed again on receipt by the sghareholder, the company must show a compelling business reason to keep them instead of distributing them. This is generally not too difficult to do.

User Avatar

Your Answer


Still have questions?

Related Questions

What causes retained earnings in a company to decrease?

Retained Earnings is decreased by a loss for the year or dividends paid to stockholders.

What are the possible causes fo retained earnings?


What causes retained earnings to increase?

Basically, Net income from the year, is one cause, and perhaps a positive adjustment of net income (from say the prior period) to be added to the beginning balance in the Retained Earnings account. Hope that helps.

Is a credit a decrease in assets retained earnings revenue liabilities?

Credit causes the decrease in assets only because assets has debit balance as a normal balance while all other items has credit balance and credit causes the increase in them.

Why are increase in accounts receivable a cash reduction on the flow statement?

Increase in accounts receivable causes the reduction in cash because if sales are made on cash then there is no increase in accounts receivable and company receives cash which causes the increase in cash while accounts receivable not.

The increase in kinetic causes what?

The increase in the kinetic energy causes the increase in velocity.

Does an increase in interest payable increase or decrease cash flow?

Increase in interest payable increases the cash flow of company as payment is not cleared when due and which causes temporary increase in company's cash flow

Do increases in inventory increase or decrease cash flow?

Increase in amount of inventory causes the decrease in cash flow of company as company pays the cash to acquire inventory and hence reduction in cash flow occurs.

Will resistance increase if the voltage in a circuit is increased?

For most metal conductors, the answer is yes... indirectly. An increase in voltage causes an increase in current which, in turn, causes an increase in temperature. An increase in temperature causes an increase in resistivity, which causes an increase in resistance. This is the reason that Ohm's Law doesn't apply to most conductors!

What causes hurricanes to increase in intensity?

Warm water causes hurricanes to increase intensity.

What causes the greatest increase in the motion of molecules in a system?

One thing that causes the greatest increase of motion of molecules is an increase in temperature.

What causes density to increase and decrease?

The increase in concentration increases the density and decrease causes the decrease in density.

What causes your heart to increase speed when your scared?

In general, an increase of adrenalin causes increased heart rate.

What causes water erosion to increase?

An increase in volume or velocity of the water will increase erosion

What causes deposition to increase?

as rivers move they bring dirt and rock too.As the river moves it causes the increase of deposition.

What causes Deflection?

the main causes of the inflation is increase in the percapita income and this results in increase in the standard of living of the people .. and the other one is increase in the percapita income in our country

What does the greenhouse effect cause an increase in?

It causes an increase in the Earth's temperature.

An increase in wind causes this current to increase What type of current is it?


What happens when Aldosterone increases?

Aldosterone causes sodium to be retained and potassium to be excreted and blood pressure to rise.

What causes a substance to expand?

An increase in temperature of the substance causes it to expand.

What are the causes of deflation?

an increase in demand

What causes static to increase and decrease?


What immigration causes the population to do?


What causes an increase in the value of an option?

An increase in the market price of the item the option is for.

Does having your spleen remove cause an increase in platelets?

It causes a modest increase.