What is Retained Earnings on my Balance Sheet?

Retained Earnings are the summation of all prior years' Net Income. At the end of each fiscal year, your Net Income for that fiscal year on your Income Statement closes out to Retained Earnings on your Balance Sheet. For example, if your Net Income for the following years was:

2020 Net Income of ($8,000) → this is a loss of $8k

2021 Net Income of $10,000 → this is a profit of $10k

Then on your 2022 Balance sheet starting on January 1st, 2022, you’ll see Retained Earnings of $2,000