Definition Definition

Retained earnings

Retained earnings are net income that a corporation retains for future use. Net income is recorded in retained earnings by a closing entry that debits income summary and credits retained earnings.

Retained earnings are net income that a company retains for use in the business. The balance in retained earnings is part of the stockholders' claim on the total assets of the corporation. It does not, though, represent a claim on any specific asset. Nor can the amount of retained earnings be associated with the balance of any asset account.


Retained earnings are profits reinvested in (or plowed back into) a company for improvements and expansion.


The marketing activities involved in selling products to final consumers for personal or household use.

Share it: CITE

Related Definitions

  • Signature Loan
    Signature Loan is the borrowed amount with a set rate...
  • Linear Relationship
    Linear Relationship is a mathematical phrase that describes two different...
  • Grant Deed
    Grant Deed is a legally binding contract that transfers ownership...
  • Annuitization
    Annuitization is a procedure through which installments of an annuity...
  • Sustainable Growth Rate
    Sustainable Growth Rate relates to the greatest pace of development...