What is the Statement of Retained Earnings

The video tutorial explains the statement of retained earnings, a financial document that reports changes in retained earnings over time. It defines retained earnings as income not distributed as dividends and explains dividends as transfers of earned assets to owners. The tutorial uses a bank account analogy to illustrate these concepts. It also describes the structure of the statement, including beginning balances, net income, and dividends, and notes that some companies may not distribute dividends.

Describe the relationship between beginning and ending retained earnings.

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What happens to retained earnings if a business does not distribute dividends?

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