Difference between retained earnings

Retained feedment is the clams generated by a political party that are non distributed to stockholders (shareholders) as dividends but are every reinvested in the business or unplowed as a reserve for limited objectives (such as to pay off a debt or purchase a working capital asset). A balance ragtime envision memorialisen under the heading well-kept earnings is the sum of all gelt contain since the comp boths inception. Retained earnings are cut back by losses, and are also called amass earnings, accumulated profit, accumulated Income, accumulated surplus, acquire surplus, ndistributed earnings, or undivided profits.Profit and loss card is one of the pecuniary disputations of a company and shows the companys revenues and expenses during a particular period. It Indicates how the revenues (money received from the sale of products and services before expenses are taken out, also known as the crown trace) are transformed into the crystalise income (the result after (prenominal) all revenues and expenses take for been accountinged for, also known as concluding profit or the bottom line). It displays the revenues recognized tor a specific period, nd the cost and expenses charged against these revenues, including write- offs (e. . , depreciation and amortization of various assets) and taxes. The purpose of the income statement is to show managers and investors whether the company made or woolly money during the period existence reported. When any step is kept separate by a company out of its profit for early purpose then that is called as common reserves. In other words, the command reserves are the retained earnings of a company which are kept diversion out of companys profits to meet approaching known or unknown obligations.General reserves are the part of Profit and loss Appropriation Account. The general reserve is a free reserve which can be utilized for any purpose after fulfilling certain conditions. The primary differences be tween the retained earnings , profit and loss account and general reserve is as follows manoeuvre of difference Retained earning Account General reserve Definition This is the profit which is not distributed to the stockholders but probably reinvested In the business. This Is the financial statement of a company which shows the tOf2 for future(a) purposes. UsesThis is used or retained as earnings for specific objectives like to pay off debts etc. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. General reserve is certain amount of money kept aside for future need or unexpected expenses. appoint under A balance sheet figure shown under the heading retained earnings is the sum of all profits retained since the companys inception. Found in the final examination accounts statement book General reserves are the part of Profit and blemish Appropriation Account.