Retained Earnings is the amount of net income (or profit) reserved for reinvestment into the business.
At the end of your fiscal year, Core displays the net income of your Profit & Loss account to Retained Earnings on the balance sheet.
To see what makes up your Retained Earnings, you need to run the Profit & Loss report as of the last day of the previous fiscal year.
Run the Profit & Loss report
To run the Profit &Loss report, follow these steps:
- Navigate to the Reports screen in Core.
- Search for the report Profit and Loss Accrual Basis and run it.
- On the Customize Report dialog > Filters tab, select the filter Transaction Date - As Of - <End date of your fiscal year>. For example, if the fiscal year ends 8/31/2021, you need to run the report as of 8/31/2021.
- Click Continue to view the report.
Review and compare the Retained Earnings account
If the amount on the Profit & Loss report differs from the Retained Earnings account on your balance sheet, transactions might have been entered against the Retained Earnings account. You can run a quick report to check these transactions:
- Go to Accounting > Chart of Accounts.
- Search for the account Retained Earnings - 3900.
- Click on the drop-down arrow to the right and select View Report.
The report displays all the transactions affecting the Retained Earnings - 3900 account.