The Term Deficit Is Used to Refer to a Debit

question 210

Multiple Choice

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

• A) Retained Earnings
• B) Treasury Stock
• C) Organizational Expenses
• D) Common Stock

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Definitions:

Owner's Equity

The residual interest in the assets of a company after subtracting liabilities, often referred to as shareholder's equity in a corporation.

Liabilities

Financial obligations or debts that a company or individual owes to others.

Asset

A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

General Ledger

A record of all financial transactions divided into accounts and usually compiled at the end of each month.