Assume That No Dividends Were Declared During the Current Year

question 67

Multiple Choice

Assume that no dividends were declared during the current year.Which of the following statements about the effect of a net loss on the closing process is correct?

• A)If a company has a net loss during the current accounting period,then the ending Retained Earnings will be smaller than the beginning Retained Earnings.
• B)When closing entries are prepared,Common Stock is debited if a company has a net loss.
• C)If a company has a net loss,the closing entry will include debits to the revenue accounts,credits to the expense accounts,and a credit to Retained Earnings.
• D)If a company has a net loss,the amount of revenues to be closed will be greater than the amount of expenses to be closed in the closing process.

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Definitions:

Morale

Overall mood of an individual or group, based on attitudes and satisfaction.

Stretchable

Capable of being extended or stretched without breaking or losing shape.

Comfort Zone

A behavioral state within which a person operates in an anxiety-neutral condition, using a limited set of behaviors.

Individual Job Performance

The level at which an employee fulfills their job responsibilities and tasks, often measured against predefined standards.