Question: When a company continuously reports Net Loss from its operations, what may happen to its Retained Earnings (R/E)? Group of answer choices It increases because
When a company continuously reports Net Loss from its operations, what may happen to its Retained Earnings (R/E)? Group of answer choices It increases because losses are negative in nature. When negative value (loss) is subtracted, the actual result is increasing. It keeps decreasing until the net amount of R/E reaches zero (0), and stops decreasing. In other words, the Retained Earnings on the Balance Sheet cannot have negative value. It is not affected by the Net Loss, because Net Loss is an Income Statement item, while R/E is a Balance Sheet item. It keeps decreasing by the amount of Net Loss of each year. The result may be negative Retained Earnings amount on the Balance Sheet
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