Final answer:
A credit balance in Retained Earnings is normal for a corporation and signifies that its lifetime earnings surpass any losses and dividends paid. Retained Earnings reflect the profits reinvested in the company and a credit balance indicates a profitable history.
Step-by-step explanation:
A credit balance in Retained Earnings is normal, indicating that the corporation's lifetime earnings exceed lifetime losses and dividends.
Retained Earnings is an equity account found on a company's balance sheet that represents the accumulated portion of net income that has been retained by the company rather than distributed to its shareholders as dividends.
Essentially, it is the total profits that the company has reinvested in itself since its inception and has not paid out in dividends. A credit balance in the Retained Earnings account is normal and reflects that a company has been profitable over time.
Conversely, a debit balance would indicate that the company has experienced more losses than profits, or has distributed more dividends than its earnings, which might be a concern for company's financial stability.