Accumulated Income

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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.

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RELATED FAQS
  1. Which transactions affect the retained earnings statement?

    Retained earnings are the portion of a company's income that management retains for internal operations instead of paying ... Read Full Answer >>
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    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
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