Asked by Angelica Serrano on Jun 19, 2024
Verified
A debit balance in retained earnings is called a
A) loss.
B) capital surplus.
C) deficit.
D) contributed surplus.
Retained Earnings
Funds that are not distributed as dividends but are reserved by the company to reinvest in its business, pay off debt, or save for future use.
Deficit
The amount by which expenses exceed income or liabilities exceed assets.
- Acquire knowledge on the principle of shareholders' equity and its ingredients.
- Evaluate the influence of fiscal decisions on shareholders' equity.
Verified Answer
MF
Madison FearsJun 23, 2024
Final Answer :
C
Explanation :
A debit balance in retained earnings indicates that a company has incurred more losses than profits over time, which is referred to as a deficit.
Learning Objectives
- Acquire knowledge on the principle of shareholders' equity and its ingredients.
- Evaluate the influence of fiscal decisions on shareholders' equity.