Accumulated Income

DEFINITION of 'Accumulated Income'

The portion of net income that is retained by a corporation instead of being distributed as dividends. Any accumulated income is typically used by the corporation to reinvest in its principal business or to pay down its debt. Accumulated income appears under shareholder's equity on the corporation's balance sheet.

Also called "retained earnings".

BREAKING DOWN 'Accumulated Income'

Accumulated income refers to the percentage of net income that is accumulated and used for reinvestment purposes or to pay down debt rather than being paid out in the form of dividends. Accumulated income is often invested in areas within the corporation that will create growth opportunities, such as research and development, new technology or machinery, and other forms of capital expenditures.

RELATED TERMS
  1. Accumulated Other Comprehensive ...

    Expenses, gains, and losses reported in the stockholder’s equity ...
  2. Accumulation

    1. An individual investor's cash contributions to invest in securities ...
  3. Accumulated Earnings and Profits

    An accounting term applicable to stockholders of closely held ...
  4. Accumulated Fund

    The capital fund of a nonprofit organization. Money is directed ...
  5. Accumulation Unit

    1) In the case of a variable annuity, a measurement of the value ...
  6. Accumulated Value

    The total amount an investment currently holds, including the ...
Related Articles
  1. Investing

    What's Accumulated Other Comprehensive Income?

    Accumulated other comprehensive income lists gains and losses a firm has yet to settle.
  2. Financial Advisor

    Understanding How Mutual Funds Pay Dividends

    The process by which mutual fund dividends are calculated, distributed and reported is fairly straightforward in most cases. Here's a look.
  3. Retirement

    Should Retirees Reinvest Their Dividends?

    Find out why dividend reinvestment may or may not be the right choice for retirees, depending on their financial needs and investment goals.
  4. Personal Finance

    Explaining Double Taxation

    Double taxation refers to income taxes being imposed twice on the same source of earned income.
  5. Retirement

    Understanding How Dividends Are Taxed

    Learn how dividends are taxed by the IRS, and understand the different types of dividend income as well as the capital gains tax rates.
  6. Retirement

    Reinvesting Dividends Pays in the Long Run

    Find out why dividend reinvestment is one of the easiest ways to grow wealth, including how this tactic can increase your investment income over time.
  7. Personal Finance

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  8. Financial Advisor

    Got Dividends? Here's How to Reinvest Them

    Reinvesting dividends is almost always a good idea if you intend to hold your shares for the long term, and there are several ways to do it.
  9. Managing Wealth

    How Will Your Investment Make Money?

    Discover the basic types of investment income and which asset classes pay them.
  10. Investing

    Why Do Some Companies Pay A Dividend, While Other Companies Do Not?

    Rapidly growing companies usually don’t pay dividends. Instead, they reinvest earnings to fund growth and increase their value.
RELATED FAQS
  1. What is the difference between earnings and income?

    See how earnings and income are different and when they are used in relation to personal finance versus a business' financial ... Read Answer >>
  2. Is there any advantages or disadvantages on how often a fund pays out dividends ...

    I am looking for a mutual fund for an IRA. I would like at least +30 years of growth. In my situation, I will not be looking ... Read Answer >>
  3. What is the impact of retained earnings on stockholders equity?

    Learn about the relationship between retained earnings and stockholders' equity for a corporation and how it is reported ... Read Answer >>
  4. How does accumulated depreciation affect net income?

    Learn why accumulated depreciation does not directly affect a company's net income; understand where a company accounts for ... Read Answer >>
  5. How is accumulation area calculated?

    Explore the use of accumulation areas in the analysis of traded securities. Learn about on-balance volume and its role in ... Read Answer >>
  6. How do you calculate retained earnings per share?

    Research the amount of retained earnings per share compared over time to understand whether or not a company uses its profits ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center