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

Question

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If a firm incurs a loss or pays out more dividends than its net income, its retained earnings will be negative for that year. This means that the company has accumulated losses over time and may have to find alternative sources of funding to continue its operations. A low positive number or zero would only be possible if the firm had positive net income and did not distribute all of it as dividends.

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