Which of the Following Describes a Retained Earnings Deficit

question 62

Multiple Choice

Which of the following describes a retained earnings deficit?

• A)When the retained earnings is less than the total share capital
• B)When the retained earnings is a negative amount
• C)When the company records a loss for the year
• D)When the company does not pay out any dividends

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Definitions:

Ceramic Tile

A durable, hard flooring material made from shaping and firing clay, often used for floors and walls.

Budgeted Unit Sales

An estimate of the number of units a company expects to sell over a certain period, often used for planning and strategic purposes.

Inventory Policy

A set of guidelines a company follows to determine the optimum levels of inventory to hold.

Direct Materials

Raw materials that are directly attributable and integral to the manufacturing of a product.