A Debit Balance in the Retained Earnings Account Can Result

question 72

Multiple Choice

A debit balance in the retained earnings account can result from:

• A)expenses exceeding revenues.
• B)a loss exceeding the amount of profit previously recorded in retained earnings.
• C)dividends being greater than accumulated earnings.
• D)All of the choices are correct.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash and securities, owned by an individual or organization, especially those used to start or operate a business.

Market Value

The current quoted price at which an asset or service can be bought or sold in a public marketplace.

Economic Condition

Refers to the current state of the economy in a particular area or globally, often evaluated based on factors like GDP, employment rates, and inflation.

Credit Risk

The possibility that a borrower may default on any type of debt by failing to make required payments.