@BeyondTheBox
No one should ever need to make any journal entries into the Retained Earnings account in QB. System automatically makes the annual entry for you on the first day of the new year by zeroing out Income Stmt moving that profit or loss to Retained Earnings on the Balance Sheet. RE account has credit balance if you have a cumulative profit (revenue minus expense = profit or loss).
Distributions are when Retained Earnings are paid to S-Corp Shareholders, usually at year end close. Entry to pay is a debit to Distributions account and credit to cash account so DOES NOT CHANGE Retained Earnings. RE account continues to show cumulative profit or loss for life of the business.
Retained Earnings is Credit balance (ideally) and Distributions are a Debit (if done correctly).
The net of that debit and credit = net equity.
@BeyondTheBox wrote:
Thank you but all of these things are know to me and others, I am trying to determine if I need to be adding journal entries to make the account actually reflect "Retained" earnings which in reality it often does not. I am sure this is just an unfortunate title but it is the source of MANY questions.
