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How do you do Retained earnings reconciliation? |



When a company has retained earnings and wants to distribute them, they need to be done in the following way:
– Write down the beginning balance of each account.
– Take any dividends paid out that year.
– Apply all revenue increases or decreases from that year back into accounts at their new value (in this example, every dollar would go back into an account with $1,000).
– Add up all remaining profits/losses for each month and total it up for the whole accounting period. The result is how much profit was earned during an accounting period (for both companies in this case)

The “retained earnings reconciliation worksheet” is a tool that helps you to reconcile your company’s retained earnings. It can be used in conjunction with the “Retained Earnings Reconciliation Worksheet”.

How do you do Retained earnings reconciliation? |

The formula for calculating retained earnings is straightforward. Ending retained earnings = beginning retained earnings, adjusted for adjustments, plus net income, minus dividends. The statement of retained earnings, like the statement of shareholder’s equity, is a fundamental reconciliation.

So, what is the retained profits formula?

The retained earnings are computed by adding net income to the previous term’s retained earnings (or removing net losses from the previous term’s retained earnings) and then deducting any net dividend(s) paid to shareholders. At the conclusion of each accounting period (quarterly/annually), the figure is determined.

What is the retained profits journal entry? Dividends. When a corporation’s board of directors declares dividends, a journal entry is made on the date of declaration to debit Retained Earnings and credit the current liability Dividends Payable. As previously noted, the payment of cash dividends diminishes Retained Earnings.

How can you locate retained profits on a balance sheet, for example?

At the conclusion of each accounting period, retained earnings are recorded on a balance sheet under the shareholder’s equity column. To compute Retained Earnings, first add the initial Retained Earnings amount to the net income or loss, then remove dividend distributions.

What are the three elements that make up retained earnings?

This statement shows the period’s revenues, profits, costs, and losses, as well as the bottom line of net income or loss.

Answers to Related Questions

What happens to a company’s retained earnings?

The percentage of net income or net profit on a company’s income statement that is not paid out as dividends is referred to as retained profits. Rather, these profits are reinvested in the business. Retained profits are often re-invested in the business to fund R&D, replace equipment, or pay off debt.

What happens to Retained Earnings?

To put it another way, retained earnings are the profits that investors leave in the company to be reinvested. The amount of retained profits is shown on the balance sheet in the shareholders’ equity column.

What are the benefits and drawbacks of profit retention?

Retained earnings offer a number of significant advantages: They are inexpensive (though not free) — the “cost of capital” of retained earnings is simply the opportunity cost for shareholders of keeping profits in the firm (i.e. the return they could have obtained elsewhere)

Is there a difference between retained profits and cash?

A company’s retained profits are not the same as its present cash or cash equivalents. It’s a continual count of net profits that haven’t been distributed to shareholders. All of a firm’s retained profits are either paid out in cash or equivalents (such as marketable securities) or reinvested in the company.

What percentage of a company’s profits should be retained?

The optimal retained earnings-to-total-assets ratio is 1:1, or 100%. Most organizations, however, will not be able to attain this ratio. As a result, a more realistic goal is to have a ratio as near to 100 percent as feasible, which is above industry average and improving.

What’s the best way to make a balance sheet?


  1. To create a balance sheet, use the fundamental accounting equation. Assets = Liabilities + Owner’s Equity is the formula.
  2. Select the balance sheet’s due date. The balance sheet is used to illustrate a company’s assets, liabilities, and equity on a certain day of the year.
  3. Prepare the balance sheet’s heading.

Is net income the same as retained earnings?

The profit produced by a corporation during a certain time period, such as a month, quarter, or year, is referred to as net income. Retained Earnings are the company’s cumulative earnings from its establishment, minus any dividends paid out. Profits that have been reinvested in the firm are referred to as retained earnings.

Is it a credit or a debit to have retained earnings?

The Normal State of Retained Earnings

When equity accounts are positive, they have credit balances, and when they are negative, they have debit balances. Retained earnings often has a credit balance, getting a credit when it rises and a debit when it falls.

Where do you look for the first retained earnings?

Retained Earnings at the Start of the Period

Retained earnings are presented on the balance sheet at the end of each accounting period as the cumulative income from the preceding year (including the current year’s income) less dividends paid to shareholders.

Are you able to make changes to your retained earnings?

Changes in your income, dividends, and modifications to the previous period’s accounts all affect your retained profits. To account for changes in income and dividends, you must adjust your retained profits at the end of the accounting period.

How do you make adjustments to your retained earnings?

To change the balance of the retained profits account, you may apply an accounting formula. Locate the current retained profits account on the balance sheet to compute the new amount. To the initial retained profits amount, add the current net income or net loss shown on the income statement.

How do you figure out how much money you have left over after closing entries?

In a nutshell, the change in retained profits in each period equals the net income for that time less the dividends issued for that period. Calculate the net income of the company for the time period in question. The income statement shows net income, which is equal to revenues minus costs.

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Personal Finance

Instant Money Transfers: How to Speed Up Your Financial Transactions?




People today are no longer limited to using traditional banking methods and payment options like cash or checks for their financial transactions. With digital payment options becoming increasingly popular, money transfers have become easier. However, while these solutions offer convenience, they only sometimes guarantee a speedy transaction of funds from one party to another. If you need an instant transfer solution that allows you to move your funds without any hassles quickly, keep reading. Here are some tips to help you get started with an instant money transfer:

Find a Trustworthy Money Transfer Provider

Finding a trustworthy money transfer provider is paramount in ensuring your money’s safe and efficient transfer. Start by researching different providers, particularly their reputation, customer reviews, and transaction security protocols. The team at Paysend can help you send money to the Philippines from the USA in just a matter of seconds. A reliable provider should have a robust security framework to guard against fraud and hacking attempts. Additionally, consider the speed of their service, the fees they charge, and the exchange rates they offer.

Some providers may offer attractive transfer rates but compensate with hidden charges, so read the fine print. Customer service is another important factor; a good provider will have a responsive and knowledgeable support team to promptly address any issues or concerns. Regulatory compliance is also crucial – ensure the appropriate financial authorities regulate the provider. Remember, a trustworthy provider prioritizes the security and satisfaction of its customers above all else.

Select Your Preferred Payment Method

Choosing your preferred payment method is a critical step in instant money transfers. Several payment methods are available, and the best choice often depends on one’s circumstances and preferences. The most common payment options include bank transfers, debit or credit cards, and digital wallets. Bank transfers, while reliable, may provide a different speed than some users require. Debit or credit card payments are typically faster but may carry higher fees.

Digital wallets like PayPal or Apple Pay offer speed and convenience, allowing you to transfer funds digitally without requiring bank account information. The factor to consider here is not just the convenience of the payment method but also its transaction speed, security, and associated charges. Always select a payment method that suits your needs regarding these factors.

Sign Up for an Account

Once you have selected the ideal payment method and provider, it is time to sign up for an account. Most providers will require personal information such as your name, address, email ID, and phone number, so make sure the details you provided are accurate. You might also be asked to supply additional documents, such as identification proof and bank statements, to verify your identity.

Sometimes, you may need to link your bank account with the transfer provider’s platform; read through their documentation carefully to understand what steps you need to take. Once the registration process is complete, you can access and use the money transfer service for quick transfers.

Initiate the Money Transfer

Most providers will require you to register on their platform with valid ID documents before proceeding. Enter all the necessary details correctly and accurately, including recipient information and account numbers. Additionally, make sure that you double-check the amount of money being transferred and the associated fees.


Confirm everything is correct before hitting ‘Send’ to avoid costly mistakes or delays in transfer processing. You should receive an email or text message confirming the transfer with your transaction details, including the recipient’s account information and a tracking number. You can use this tracking number to monitor the progress of your money transfer.

Complete the Money Transfer Process

This usually requires providing basic information such as the recipient’s name, address, and contact details. Depending on your provider, you may also need to specify what currency you’re sending and offer additional security authentication. Once this is done, enter the amount you wish to transfer, verify the transaction details, and approve it. After that, your money should be on its way to the recipient’s account immediately.

Some providers offer extra features such as tracking services or reminders for upcoming transfers for added security and convenience. These features can come in handy when sending payments regularly or tracking the status of a transaction. Additionally, look out for any special offers, discounts, or rewards available to loyal customers. Many money transfer providers offer these incentives as a way of showing appreciation and encouraging loyalty among their customers.

Monitor the Status of Your Transfer

Most providers will allow you to monitor the progress of your transfer in real time. Some may even send notifications via email or text message when the money reaches its destination. If you sense any delays, contact customer support for assistance. Money transfers can take a few minutes to several hours, depending on the selected payment method and recipient country.


Finally, always save all records related to your money transfers, including emails and receipts. If there are any discrepancies or disputes, you can refer to these documents for clarification. With the help of a reliable provider and modern payment methods like digital wallets, you can now easily make instant money transfers. So get started today and experience the convenience of instant money transfer services.

Receive and Verify the Transaction

Once the money has been transferred, you or the recipient should receive a notification of completion. At this point, ensuring the transaction was successful, and all details were correct is important. For security purposes, some providers may ask for additional verification from either party to avoid fraud and other malicious activities. This process could include providing a digital signature or proof of identity.

Once the verification is complete, the funds should be available in the recipient’s account almost immediately. If you have any concerns, contact customer support to get assistance or help resolve any issues. Remember that reliable providers prioritize customer satisfaction and security above all else. With these steps, you can now easily and safely transfer money with instant money transfer services.

Nowadays, it’s more important than ever to employ secure digital payment methods in your daily financial transactions. That’s why researching which providers offer the best services regarding speed, security, transaction fees, and customer support pays off. With the right provider, you can have peace of mind knowing that your money transfers will be conducted instantaneously and securely.

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Personal Finance

The Ins and Outs of Getting a Loan With Bad Credit




If financial difficulties or uninformed decisions have left you with bad credit, you may not know where to turn for a loan. While borrowing money with a low credit score may take additional research or work, it’s likely still within your reach.  

Many lenders offer bad credit loans for people who need extra cash but may not have the best credit background. Applying for a loan with bad credit may feel intimidating, but the following considerations could make the process easier.

Start by Checking Your Credit

Before you begin shopping for loans, check your credit report. Some creditors require specific scores for each loan product, even those designed for bad credit, so knowing your score saves you time.

It’s also important to check your credit report for errors that may drag your score down and limit your loan options. You can access this information from Equifax and TransUnion for free online.

Compare Your Options

While a lower credit score likely disqualifies you from some personal loans, you may still have many options. Some lenders offer loans specifically for people with low credit scores who struggle to qualify for other options.


Bad credit loans may require a deposit or other fees, have higher interest rates than other loans, or include income requirements. However, they may also offer a wide range of payment terms and options like online portals that make managing your loan easier. With some research, you could find the right fit for your circumstances.  

Whenever possible, take advantage of loan prequalification. Many lenders allow you to check your potential eligibility for a loan by providing personal and financial information. They use that to run a soft credit check, which doesn’t affect your credit score. If you pre-qualify, they’ll provide information about possible rates and terms. You could complete prequalification forms for multiple loans to help you find your best option.

Improve Your Application

Some financial decisions improve your loan eligibility. A friend or family member with better credit may agree to co-sign your loan. In that case, their financial information influences your eligibility for a loan.

Cosigners take on substantial risk. If you fail to repay your loan, your cosigner becomes responsible. Likewise, issues with the loan could hurt their credit score and put a strain on your interpersonal relationship.  


If multiple lenders have declined your applications for unsecured loans, consider a secured loan instead. Secured loans require collateral, like a deposit, car, or other property. If borrowers don’t repay their loans, lenders may seize the collateral. Lending institutions don’t take on as much risk with secured loans as unsecured loans so they may have more lenient credit requirements for borrowers.

Avoid Scams

Unfortunately, fraudulent lenders often exploit consumers who have limited loan options. Before providing a lender with any personal or financial information, ensure they’re legitimate. Otherwise, you risk having your identity stolen or paying fees for a loan you never receive.

Be wary of anyone offering guaranteed approval or soliciting your business via cold calls. Always verify loan servicers’ contact information and check their reviews on trusted third-party websites.

The Bottom Line

If you have bad credit, you could still qualify for a personal loan. Remember to check your credit score, investigate your options, and confirm a lender’s legitimacy before applying. If you still struggle to qualify, you may need a cosigner or collateral to boost your application.

By taking some extra steps, you can make getting a loan easier and safer.

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Personal Finance

Four Ways to Save on Fuel in 2023





From increasing energy bills to price hikes at online stores and supermarkets, all individuals globally feel the need to make their money to go further and do more. And there has never been a perfect time to know how to save more on fuel than now.

From getting fuel cards with great deals and driving more efficiently to using telematics and keeping your vehicle in good condition, here are different ways to save money on fuel.

Get a Fuel Card

A fuel card can provide you with more than the ability to purchase fuel from a good station. With a fuel card, you can control your business’s fuel spend by getting discounts on fuel pump rates, setting spending limitations, and increasing your cash flow – all enabling you to save a significant amount of money.

Fuel cards allow savings on fuel, which means that the price you pay is always less compared to the one indicated on the fuel pump machine. With numerous fuel cards available out there, find the right partner with excellent deals.

Use Telematics/Advanced Route Planning

Digital telematics solutions come with real-time GPS tracking as well as remote automobile diagnostics helping individuals and company owners to thoughtfully plan the most efficient routes depending on different data points. A high-quality telematics solution also integrates with route optimisation systems to plan the most efficient routes and offer turn-by-turn directions and navigations.


Well-planned routes allow automobiles to get from point C to D efficiently, significantly minimising time spent and distance covered, saving on fuel. Heavy-duty automobiles can avoid routes with steep hills. You can also re-plan a hilly route for a light and medium-duty automobile.

But as you do that, ensure the route you choose doesn’t take your drivers too far. Side-step all congested routes and those that require excessive stopping and starting or cause unnecessary idling.

Drive More Efficiently

One of the proven ways to save on fuel is to manage driver behavior. Whether you’re a driver or fleet manager, you need to keep yourself or drivers accountable for how they utilize their fuel cards.

You should also reinforce ways to conserve fuel through safety training – many of the behaviors that are taught as techniques of safe driving, such as driving more efficiently. Most businesses and individuals use telematics to control driver behavior, such as harsh accelerating or braking, to maximize return on investment by minimizing fuel spend.

Keep Your Vehicle in Good Condition

If you keep your automobile in excellent condition by servicing it in line with the guidelines of the manufacturer, it’ll help you save on fuel costs. Fix any faults quickly to make sure your vehicle is operating efficiently.


When you keep your car in excellent condition, you’ll enjoy numerous benefits, saving fuel being one of them. A vehicle that isn’t serviced based on the guidelines of the manufacturer can increase the consumption of fuel by approximately 50%.

Integrate these four ways into your automobile’s daily activities, and you’ll be able to save on fuel.

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