Which of the Following Statement Year,Valley Packaging Company's Adjusted Trial

question 3

Multiple Choice

Which of the following statement year,Valley Packaging Company's adjusted trial balance showed a zero balance in retained earnings.Which of the following is the most likely explanation for this?

• A)Valley reported zero net income in the current year.
• B)Valley's trial balance will be out of balance until closing entries are recorded.
• C)The current year was Valley's first year in business.
• D)An error must have been made in preparing Valley's trial balance.

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Definitions:

Operating Departments

Units or sectors within a business that are directly involved in performing the main function or activity of the organization.

First-In, First-Out Method

An accounting method for valuing inventory that assumes goods are sold in the order in which they are purchased or produced.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, treated as if they were whole units.

Assembly Department

A section within a manufacturing facility where components are assembled together to create a finished product.