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Assume the Beginning Balance in the Retained Earnings Account Is

Question 9

Multiple Choice

Assume the beginning balance in the Retained Earnings account is zero. If a debit balance of $5,000 exists in Retained Earnings after closing out revenues and expenses at the end of the current period, it indicates:


A) the company had net income of $5,000.
B) the company had a net loss of $5,000.
C) a decrease in cash of $5,000.
D) an increase in cash of $5,000.

Correct Answer:

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