Earned Surplus
Financial Dictionary — Equity & Reserves
Definition
Retained earnings means retained earnings are profits that have been withheld during financial periods and not disbursed to partners or shareholders
Detailed Explanation
Earned surplus (retained earnings) represents accumulated profits kept in the business after dividends/distributions; it increases equity and can be used to fund operations or expansion.
Common Uses
- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.
- Used when training staff or documenting procedures and policies.
Practical Example
- Example: Teams reference **Earned Surplus** when defining terms in manuals, policies, or training materials.
Why This Term Matters
- Why it matters: Improves clarity and consistency across documentation and decision-making.