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If a Firm Incurs a Loss During a Particular Year

Question 70

Multiple Choice

If a firm incurs a loss during a particular year, or if the firm had positive net income but paid out dividends more than the net income, what happens to the RE amount?


A) It increases.
B) It is unchanged.
C) It decreases.
D) It doubles.
E) It cannot be determined from the information given.

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