Statement of Retained Earnings
or Equity Statement Explained

The statement of retained earnings might also be known as the equity statement, owners equity statement or statement of net worth. It can stand on it's own, or it can be part of the balance sheet.

This statement lists the difference in the opening balance equity at the beginning of the accounting period and the total equity at the end of the accounting period.

In other words, it shows your personal or business net worth at the beginning and end of a given period of time, and gives a general idea of what has contributed to or deducted from your net worth during that period of time.

Accounts that might affect the difference in equity between opening period and closing period are net income, owners contributions and owners draws.

To read more about what is equity and an explanation of these equity accounts, click here.

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