In Preparing Closing Entries

question 6

Multiple Choice

In preparing closing entries

• A)each revenue account will be credited.
• B)each expense account will be credited.
• C)the Retained Earnings account will be debited if there is net income for the period.
• D)the Dividends account will be debited.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders, often used for reinvestment in the business.

Dividends Account

An account that records the amount of dividends declared by a company to be distributed to its shareholders.

Long-term Investments

Long-term investments are assets that a company intends to hold for more than one fiscal year, including stocks, bonds, real estate, and other securities.

Future Expansion

Planning and preparing for growth in business operations, often involving strategic investments in facilities, technology, or workforce.