At the end of the fiscal period, the balance of Dividends is closed to
A) Retained Earnings.
B) Income Summary.
C) Dividends Payable.
D) none of these.

Question

Quizplus · Accepted Answer

Dividends are distributions of earnings to shareholders and are subtracted from retained earnings at the end of the fiscal period. They are not an expense of the business but a distribution of the earnings, hence they reduce the retained earnings.

At the End of the Fiscal Period, the Balance of Dividends