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Adjust retained earnings

Retained earnings are profits from earlier accounting periods that have not been distributed to the company's owners. At the end of your fiscal year, QuickBooks computes your profit (or loss) into an equity account named Retained Earnings.

You can make transfers to the Retained Earnings account from the registers of other balance sheet accounts; or you can use Retained Earnings in a general journal entry. Your accountant can advise you if adjustments to this account are appropriate and how to make the adjustment.

While you might adjust the Retained Earnings account to track funds withdrawn by, or distributed to, company owners, Intuit recommends that you create a separate equity account (commonly called Owner's Draw or Distributions) for these transactions. Using this method, you can easily see the total funds withdrawn by the owner as well as the individual transactions that make up the total amount.

See also

KB ID# H_YEG_ADJUST_RETAINED_EARNINGS
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