If a firm incurs a loss during a particular year,or if the firm had positive net income but paid out dividends more than the net income,its retained earnings for that year will most likely be
A) a large positive number.
B) a small positive number.
C) zero.
D) a negative number.
E) It cannot be determined from the information given.

Question

Quizplus · Accepted Answer

If a firm incurs a loss or pays out more dividends than net income, it will decrease its retained earnings from the previous year, potentially resulting in a negative balance for that current year.

If a Firm Incurs a Loss During a Particular Year,or