Which of the following statement year,Valley Packaging Company's adjusted trial balance showed a zero balance in retained earnings.Which of the following is the most likely explanation for this?
A)Valley reported zero net income in the current year.
B)Valley's trial balance will be out of balance until closing entries are recorded.
C)The current year was Valley's first year in business.
D)An error must have been made in preparing Valley's trial balance.

Question

Quizplus · Accepted Answer

The retained earnings balance in an adjusted trial balance will be its beginning balance because temporary accounts have not yet been closed.A beginning balance in retained earnings of zero is most likely due to the current year being the company's first year in business.

Which of the Following Statement Year,Valley Packaging Company's Adjusted Trial