Asked by Tyesha Valles on Jun 10, 2024
Verified
The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?
A) Retained Earnings
B) Treasury Stock
C) Organizational Expenses
D) Common Stock
Deficit
A debit balance in the retained earnings account.
Retained Earnings
The portion of net earnings not distributed as dividends but retained by the company to reinvest in its core business or to pay debt.
Treasury Stock
Shares that were once issued and outstanding but were subsequently repurchased by the company, reducing the number of shares on the market.
- Understand the principle of stockholders' equity and its elements.
Verified Answer
KP
Karmdeep PurewalJun 14, 2024
Final Answer :
A
Explanation :
Deficit refers to a debit balance in the Retained Earnings account of a corporation. This occurs when the company has accumulated losses over time, or when it pays out more in dividends than it earns in profits.
Learning Objectives
- Understand the principle of stockholders' equity and its elements.