A debit balance in retained earnings is referred to as a retained earnings deficit.

Retained Earnings Deficit

A negative balance in retained earnings, indicating that a company has more accumulated losses over time than accumulated profits.

Debit Balance

A situation where the total debits in an account exceed the total credits, indicating an excess of expenses or assets over income or liabilities.

Comprehend the principle of retained earnings, encompassing the restricted retained earnings and the deficit in retained earnings.

Verified Answer

Final Answer :

True

Explanation :

A debit balance in retained earnings means that the company has accumulated losses and is referred to as a retained earnings deficit.

Learning Objectives

Comprehend the principle of retained earnings, encompassing the restricted retained earnings and the deficit in retained earnings.