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
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withdrawn by, or distributed to, company owners, Intuit recommends that you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the total funds withdrawn by the owner as well as the individual transactions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.
Record an owner's draw
What is the Retained Earnings