If expenses have exceeded sales revenue during the life of the company, the accumulation of these losses will result in an accumulated deficit in retained earnings.

Question

Quizplus · Accepted Answer

If expenses exceed sales revenue, the company will have a net loss for that period, which will reduce the retained earnings. If the losses continue to accumulate over time, the accumulated deficit in retained earnings will reflect the total amount of losses that have been incurred.

If Expenses Have Exceeded Sales Revenue During the Life of the Company