If Retained Earnings Decreased During the Year, and No Dividends

question 50

Multiple Choice

If retained earnings decreased during the year, and no dividends were paid, which of the following statements must be true?

• A)Expenses for the year exceeded revenues.
• B)The company did not have enough cash to pay its expenses.
• C)Total stockholders' equity decreased
• D)Liabilities increased during the year.

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Definitions:

Poor Quality Materials

Materials that fail to meet the prescribed standards for production, causing potential defects in the final product.

Incorrect Instructions

Guidance or directives given that are wrong or inaccurate, potentially leading to errors or negative outcomes.

Process Cost System

An accounting method used to track production costs for continuous manufacturing processes, assigning costs to units of output on an average basis.

Job Order Cost System

An accounting method used to assign manufacturing costs to individual units or batches of products, tracking the material, labor, and overhead costs for each job.