Final answer:
Revenue accounts increase retained earnings, while expense accounts decrease retained earnings.
Step-by-step explanation:
Retained earnings represents the accumulated profits of a company that have not been distributed to its shareholders as dividends. The effect of each account on retained earnings depends on whether it contributes to the company's profitability or decreases it. For example, revenue accounts such as sales or service revenue increase retained earnings because they represent income generated by the company. On the other hand, expense accounts like salaries or utilities decrease retained earnings because they represent costs incurred by the company to generate revenue.