Retained earnings are the portion of income that a business keeps for internal operations rather than paying out to shareholders as dividends. Retained earnings are directly impacted by the same items that impact net income. These include revenues, cost of goods sold, operating expenses, and depreciation. Retained Earnings (RE) are the accumulated portion of a

Fortunately, you can answer this question by calculating your break-even point. Changing industry regulations or compliance requirements might force you to change operations or invest in different technology or infrastructure. These costs can add to your overall expenses, pushing your break-even point further out. This means the startup would need to sell 750 subscriptions each

The accounting cycle includes eight steps required to record transactions during an accounting period. In this guide, I explain the steps in the accounting cycle in detail, with examples. After you’ve fixed any out-of-balance issues and entered any late entries or accrual entries, you’ll want to run an adjusted trial balance. This will give you