If Llama Company has paid out more in dividends than it has had in net income, over the lifetime of the company, then the balances in the Stockholders' Equity should show:

Question

Quizplus · Accepted Answer

If Llama Company has paid out more in dividends than it has had in net income, it means that the company has been using funds from the Retained Earnings account to pay dividends. This results in a negative balance in the Retained Earnings account, which is represented by a debit balance. Therefore, the balances in the Stockholders' Equity should show a debit balance in the Retained Earnings account.

If Llama Company Has Paid Out More in Dividends Than