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:

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A debit balance in the Retained Earnings account indicates that the company had a net loss of $5,000 for the period, as the account is used to accumulate the profits or losses of a company over time. If the Retained Earnings account had a credit balance, it would indicate that the company had a net income. The balance in Retained Earnings does not directly affect cash, so options B and D are not correct.

Assume the Beginning Balance in the Retained Earnings Account Is