Laba ditahan, cadangan, atau saldo laba

Summary

This video explores the concept of retained earnings in accounting, explaining how it refers to the profits a company holds back instead of distributing to shareholders. It discusses the process of closing accounts at the end of an accounting period, how retained earnings are impacted by net income and dividends, and the factors influencing the decision to retain earnings, such as legal constraints or creditor agreements. The video also highlights the importance of correcting accounting errors from previous periods by adjusting retained earnings, and emphasizes how financial statements should include additional information for clarity, not just account balances.

Takeaways

• 😀 Retained earnings, also known as accumulated earnings or reserves, refers to profits that a company retains rather than distributing to shareholders.
• 😀 Retained earnings are a component of shareholders' equity and arise from closing profit and loss accounts at the end of an accounting period.
• 😀 The main steps in closing the profit and loss accounts include debiting the income, crediting the profit and loss account, and adjusting the retained earnings accordingly.
• 😀 Companies may retain earnings due to various restrictions, such as legal regulations, third-party agreements with creditors, or voluntary decisions by the company itself.
• 😀 Accounting errors can occur for various reasons, such as calculation mistakes or deliberate misstatements, and must be corrected when discovered, either in the current period or through adjustments to retained earnings from previous periods.
• 😀 If accounting errors are found from prior periods, adjustments must be made to the beginning balance of retained earnings in the current period.
• 😀 A practical example involves correcting an overreported net income from the previous year due to incorrect inventory values, which impacts the retained earnings of the new period.
• 😀 Dividend declarations reduce retained earnings, as dividends are paid out of the profits retained by the company.
• 😀 Treasury stock sales, if resulting in a loss, can also decrease retained earnings, as this involves a reduction in shareholders' equity.
• 😀 The presentation of shareholders' equity on the balance sheet often includes various components such as preferred and ordinary shares, share premiums, retained earnings, and treasury stocks, with relevant disclosures about each component.

Q & A

What does the term 'retained earnings' or 'saldo laba' refer to in accounting?

Retained earnings or 'saldo laba' refers to the profits or earnings of a company that are not distributed to its owners but are kept within the company. These funds are used for reinvestment or other company needs.

What is the accounting process for transferring net income to retained earnings at the end of an accounting period?

At the end of an accounting period, the income statement is closed, with revenues being debited and expenses credited. The net income (or loss) is then credited to the income summary account, and finally, transferred to retained earnings.

Why can retained earnings decrease, and what are some reasons for this?

Retained earnings can decrease due to the distribution of dividends to shareholders, losses incurred by the company, or adjustments such as correcting accounting errors from previous periods.

How do legal regulations affect the distribution of retained earnings?

Legal regulations may limit how much of the net income can be distributed as dividends to shareholders, ensuring that companies retain enough capital for business operations and obligations.

What role do creditors play in determining the retention of earnings within a company?

Creditors may impose restrictions on dividend distribution in contracts, ensuring that enough earnings are retained to cover outstanding loan obligations. This is often included as a covenant in loan agreements.

What is the impact of accounting errors found in previous periods on retained earnings?

When an accounting error from a prior period is discovered, it must be corrected by adjusting the opening balance of retained earnings in the current period, as the error would have affected the net income reported in that earlier period.

How would an overstatement of inventory in the previous year affect the financial statements?

If inventory is overstated in the previous year, it results in an understatement of the cost of goods sold (COGS), which in turn inflates net income. This error would need to be corrected by adjusting the opening balance of retained earnings.

How is the correction of an accounting error reflected in financial statements?

The correction of an accounting error is reflected by adjusting the retained earnings balance at the beginning of the current period, and this adjustment is disclosed in the notes to the financial statements.

What does the term 'treasury stock' refer to, and how does it affect equity?

Treasury stock refers to shares that a company has repurchased from the market. These shares are considered a contra-equity account and reduce the overall equity of the company.

How is the equity section of a balance sheet typically presented for a limited liability company?

In a limited liability company's balance sheet, the equity section includes components such as preferred stock, common stock, additional paid-in capital, retained earnings, and treasury stock, with detailed disclosures provided for each component, including terms and characteristics of preferred stock.