The Final Step When Preparing Closing Entries Is to Close

question 20

True/False

The final step when preparing closing entries is to close the Dividends account to the Retained Earnings account.

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Definitions:

Net Income

After accounting for all costs and paying taxes, the remaining revenue that constitutes a company's profit.

Marginal Tax Rates

The rate at which your last dollar of income is taxed, representing the percentage of tax applied to your income for each tax bracket in which you qualify.

Eligible Dividends

Dividends designated by a corporation to be eligible for a reduced tax rate in the hands of individual Canadian shareholders.

Interest Income

Income earned from deposit accounts or investments through the receipt of interest payments.