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:\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:\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 closing revenues and expenses and with no dividends) implies that expenses exceeded revenues. When expenses > revenues, the company has a net loss. Net loss is closed to Retained Earnings as a debit. Cash is not directly related to the Retained Earnings balance in this context (since no information about cash transactions is given in relation to this balance). Net income would result in a credit balance in Retained Earnings.

Answer:

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