What Is Retained Profit ? How Is It Treated In Profit And Loss Account And In Balance Sheet?


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Steven Vakula Profile
Steven Vakula answered
Retain profit is reflected in the balance sheet under the Liabilities and Owner Equity section. Specifically it is a line item in Owners equity separated from Capital Stock. Retained Profit or Retained Earning reflect the historical profitability of the company from inception and is the accumulation of current earnings or loss since the company started operations. Retained Profit or Earnings is not reflected in the Income statement since the Income Statement is a reflection of the company for a period of time which is either one year or it's operating cycle. This is usually a one year period with few exceptions. The current profit and loss of a company is closed to Retained Profit or Earning at the end of the year or operating cycle and as such is reported in the balance sheet and is zeroed out on the Income statement at the end of the year.
Yasir Baqar Profile
Yasir Baqar answered
R. Profit or Earning is the amount of profit of any Share holders company. It is earned from the amount of share capital.

It is treated as Equity and is shown in the Share holders equity column in balance sheet.

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