Accounting › Section M · Corporation accounting › Topic M.4
Owners' equity versus retained earnings
Owners' equity is the owners' whole claim on a business, while retained earnings is only the part the business has earned and kept. Telling them apart, and knowing what can change retained earnings, is how readers judge where a company's equity came from.
In this topic
- Equity in every business form
- Contributed capital and earned capital
- What retained earnings is
- Restricted retained earnings
- Appropriated retained earnings
- Prior period adjustments
- Worked example: a statement of retained earnings
- The statement of stockholders' equity
- Worked example: tracing total equity
- IFRS terms
- Common mistakes to avoid
- Key takeaways
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