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Stuart
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The 'profit and loss account' is called the income statement in the US. It shows the profit or loss over a certain period of time.
Retained earnings means the portion of net income that is retained by the company rather than paid to the owners as dividends. If the company takes a loss, then the loss is retained. Retained earnings and losses are cumulative from year to year and losses offset earnings. Retained earnings are shown on the balance sheet.
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