Which Types Of Accounts Affect Retained Earnings Account
Retained Earnings Is Affected By Which Kinds / Types Of Accounts And What Are The Major Key Factors Which Cause Retained Earnings To Increase Or Decrease? / What Is The Effect Of Net Income / Expenses / Revenues And Dividends On It? Retained Earnings Account is a Permanent Account or Balance Sheet Account and it is a part of equity account. It is used to expand, grow and to Stabilize The Business . Retained earnings is mostly affected by four (4) types of accounts which are discussed below: (i) Revenue Accounts Revenue accounts positively affect the retained earnings. Revenue accounts are added to retained earnings as these accounts also have normal balance on credit side as retained earnings that is why retained earnings account increases i.e., credit plus credit are added and the account balance of retained earnings surely increases. (ii) Expense Accounts Expenses accounts negatively affect the retained earnings accounts as it is unfavorable for it...