This video lists the various things that increase or decrease the Retained Earnings (or Accumulated Deficit) account. The three most common things are Net Income (increases Retained Earnings), Net Loss (decreases Retained Earnings), and Dividends (decreases Retained Earnings if it is a cash, scrip, property, or stock dividend). Prior period adjustments due to accounting errors and certain changes in accounting principle (e.g., switching from FIFO to LIFO) can cause Retained Earnings to increase or decrease. If the firm engages in a quasi-reorganization this would increase Retained Earnings, as the purpose of a quasi-reorganization is to eliminate a deficit. Retained Earnings may decrease if the firm sells Treasury Stock for less than its cost; the difference is first drawn down against the Treasury Stock Paid-in Capital account with any remainder reducing the balance of Retained Earnings.