Retained Earning Account is necessary for bringing forward the profits and losses to next year. You could have one or more retained earning accounts. They will be offset accounts to the revenue and expense profit and loss accounts.
IMG Path: Financial Accounting (New) -> General Ledger Accounting (New) -> Master Data -> G/L Accounts -> Preparations -> Define Retained Earnings Account
When you enter into the transaction, fill the necessary fields.
Even though you don’t have retained earning account, you will be able to define it here with warning message.