If the balance in Retained Earnings on January 1, 2020 was zero, then a credit balance in Retained Earnings on December 31, 2020 (after closing revenue and expense accounts) represents net income for the accounting period providing that no dividends were declared.

Question

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A credit balance in Retained Earnings indicates that the company has generated net income during the accounting period after deducting all expenses. If no dividends were declared, this credit balance in Retained Earnings represents the amount of net income that has been retained by the company.

If the Balance in Retained Earnings on January 1, 2020