A net loss
A) occurs if operating expenses exceed cost of goods sold.
B) is not closed to Retained Earnings if it would result in a debit balance.
C) is closed to Retained Earnings even if it would result in a debit balance.
D) is closed to the paid-in capital account of the stockholders' equity section of the balance sheet.

Question

Quizplus · Accepted Answer

A net loss is closed to the Retained Earnings account, regardless of whether it results in a credit or debit balance. This is because Retained Earnings represents the cumulative earnings (or losses) of the company since its inception.

A Net Loss