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Retained Earnings Definition

July 28, 2015

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Definition

Refers to funds accumulated over the life of a business and held by the business for use in operations and growth. It is reported in the Equity section of a financial statement called a Balance Sheet.

Expanded Definition

The sum of net profits and net losses accumulated over the life of a business are referred to as Retained Earnings.  The money is usually reinvested in the business and not paid out as dividends.  Retained Earnings are reported on a financial statement called a Balance Sheet.

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