If a company has paid more in the dividends than it has in net income then in that case it will have a negative balance in the earning account.
Any company will distribute the dividends to the stakeholders only from the profit that it have earned, the dividend is the profit or surplus amount that company have earned and company is able to pay the a proportion of profit to the stakeholders.
And amount which is not distributed in the dividend is reinvested in the business which is called retained earning.
For more detailed information about dividends please refer to https://brainly.com/question/28044310
#SPJ4
