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3.2. Accounting Equations tainedearnings=Beginningretainedearnings+Netincome−DividendsEndingretainedearnings=Beginningretainedearnings+ Netincome−Dividends
Or, substituting Equation 3 for Net income, equivalently:
Equation (4b)
<span>Endingretainedearnings=Beginningretainedearnings+Revenues−Expenses−DividendsEndingretainedearnings=Beginningretainedearnings+Revenues− Expenses−Dividends
As its name suggests, retained earnings represent the earnings (i.e., net income) that are retained by the company—in other words, the amount not distributed as dividends t
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