assume the balance in the retained earnings account at january 1, 2025 is zero, and no dividends are…

assume the balance in the retained earnings account at january 1, 2025 is zero, and no dividends are declared in 2025. if a debit balance of $13,000 exists in retained earnings after closing out revenues and expenses at the end of 2025, this indicates:\n\na. the company had a net loss of $13,000.\nb. a decrease in cash of $13,000.\nc. an increase in cash of $13,000.\nd. that the company had net income of $13,000.

assume the balance in the retained earnings account at january 1, 2025 is zero, and no dividends are declared in 2025. if a debit balance of $13,000 exists in retained earnings after closing out revenues and expenses at the end of 2025, this indicates:\n\na. the company had a net loss of $13,000.\nb. a decrease in cash of $13,000.\nc. an increase in cash of $13,000.\nd. that the company had net income of $13,000.

Answer

Brief Explanations:

Retained Earnings is a stockholders' equity account. A debit balance in Retained Earnings (after considering no dividends) implies that expenses exceeded revenues. Net loss occurs when expenses > revenues. Cash is not directly related to the Retained Earnings balance (in this context of just closing revenues and expenses). Net income would credit Retained Earnings.

Answer:

A. the company had a net loss of $13,000.