What Account Represents Cumulative Earnings?

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Cumulative earnings have not been distributed to a company's stockholders. Find out what account represents cumulative earnings with help from a banking and financial expert in this free video clip.

Part of the Video Series: Accounting FAQs
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Video Transcript

Hi, I'm Lori Greer from Atlanta, Georgia, and I'm here to answer the question, what account represents cumulative earnings? Generally, retained earnings is a corporation's cumulative earnings, since the corporation was formed, minus the dividends it has declared since it began. In other words, retained earnings represents the corporation's cumulative earnings that have not been distributed to it's stockholders. The amount of retained earnings as of a balance sheet's date, is reported as a separate line item in the stockholder's equity section of the balance sheet. A negative amount of retained earnings is reported as deficit or a cumulative deficit. I'm Lori Greer from Atlanta, Georgia, and we just discussed what account represents cumulative earnings.


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