A Deficit Occurs When a Company Has Reoccurring Losses And/or

question 109

True/False

A deficit occurs when a company has reoccurring losses and/or declares dividends in excess of retained earnings.

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Definitions:

Accounting Cycle

The series of steps in processing financial transactions, from the initial recording to the presentation of financial statements.

Recording Business Transactions

The process of documenting the financial activities of a business in accounting records according to established principles.

Operating Cycle

Average time it takes to buy and sell merchandise and then collect accounts receivable.

Financial Statements

Financial statements are formal records that outline the financial activities and condition of a business, entity, or individual, encompassing the balance sheet, income statement, and cash flow statement.