Financial statements serve the purpose of presenting economic activity and status related to a particular date and over a particular time frame. Accountants record monetary transactions and via financial reports present the information in an easy to understand format. The financial statements for a small business do not have to comply with those of publicly traded operations.
Statement of Retained Earnings
The statement of retained earnings is one of the four financial statements making up the financial statements. It identifies the beginning balance at the start of the accounting period reported and adds any earnings and subtracts any distributions/dividends/draws to the owners to end up with the ending balance. It is recommended that the this statement have notes attached to identify the type of ownership and corresponding management hierarchy.