After Preparing the Financial Statements for the Current Year, the Accountant

question 67

Multiple Choice

After preparing the financial statements for the current year, the accountant for Exquisite Gems closed the Dividends account at year-end by debiting Income Summary and crediting the Dividends account. What is the effect of this entry on current-year profit and the balance in the Retained Earnings account at year-end?

• A) Profit is overstated and the balance in the Retained Earnings account is correct.
• B) Profit is correct and the balance in the Retained Earnings account is correct.
• C) Profit is understated and the balance in the Retained Earnings account is understated.
• D) Profit is understated and the balance in the Retained Earnings account is overstated.

Recognize the successful traits and responsibilities of entrepreneurial leaders.

Acknowledge the complexities and necessity of managing change effectively in rapidly growing firms.

Understand how virtual teams and the Internet facilitate collaboration in new ventures.

Acquire knowledge on acquiring expertise and building an effective management structure in new ventures.

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Definitions:

American Pharmacists Association

A professional organization that represents pharmacists across the United States, advocating for the profession and patient care.

Family Practitioners

Family Practitioners are medical doctors who provide comprehensive healthcare for individuals and families across all ages, genders, and diseases, focusing on preventative care and chronic disease management.

Internists

Medical doctors specializing in internal medicine, focusing on the diagnosis and non-surgical treatment of diseases in adults.

Cardiologists

Medical specialists who diagnose and treat diseases or conditions of the heart and blood vessels.