Financial deficits are created when:
A) profits and retained earnings are greater than the capital-spending requirement.
B) profits and retained earnings are less than the capital-spending requirement.
C) profits and retained earnings are equal to the capital-spending requirement.
D) All of these.
E) None of these.

Question

Quizplus · Accepted Answer

Financial deficits are created when profits and retained earnings are less than the capital-spending requirement. This means that a company is spending more than it is earning and will need to find alternative sources of funding or make adjustments to their spending in order to avoid further deficits.

Financial Deficits Are Created When