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.

---

Definitions:

Pleadings

Documents filed with a court by parties to a legal action that detail their respective claims, defenses, and other material information relevant to the case.

English Courts

The judicial system in England and Wales, responsible for interpreting and applying English law in civil and criminal matters.

Equity

Refers to fairness or justice in the way people are treated or in the distribution of resources; in a financial context, it represents ownership interest in an asset or company.

Decree

A formal and authoritative order, often used in a legal context, such as a court decision or judgement.