Assume the balance in the Retained Earnings account at January 1,2015 is zero,and no dividends are declared in 2015.If a debit balance of $5,000 exists in Retained Earnings after closing out revenues and expenses at the end of 2015,this indicates:

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A debit balance in Retained Earnings indicates the company had a net loss, meaning expenses were greater than revenues, resulting in a decrease in equity. A positive balance in Retained Earnings would indicate net income or profits. An increase or decrease in cash is not necessarily related to the Retained Earnings account.

Assume the Balance in the Retained Earnings Account at January