Retained Earnings in BS. There are to terms in Finance Net profit and Retained Earnings. Net profit which is earned during the year from the business transactions. where the Retained earnings is carried over from the business over the period of time. which stays either asset or liability side of the balance sheet. Every year the Net profit/Loss is added to the Retained earnings account which is carried forward to the next year and Net profit account is become 0 at the end of the year.
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