Use this end-of-period spreadsheet to answer the questions that follow.

-The entry to close the dividends account would be
A) debit Retained Earnings, $3,000; credit Dividends, $3,000
B) debit Retained Earnings, $12,000; credit Dividends, $12,000
C) debit Dividends, $3,000; credit Retained Earnings, $3,000
D) debit Dividends, $12,000; credit Retained Earnings, $12,000

Question

Use this end-of-period spreadsheet to answer the questions that follow.
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-The entry to close the dividends account would be
A) debit Retained Earnings, $3,000; credit Dividends, $3,000 
B) debit Retained Earnings, $12,000; credit Dividends, $12,000 
C) debit Dividends, $3,000; credit Retained Earnings, $3,000 
D) debit Dividends, $12,000; credit Retained Earnings, $12,000

Quizplus · Accepted Answer

The correct entry to close the dividends account involves debiting Retained Earnings and crediting Dividends for the same amount, which transfers the dividend expense from the Dividends account to Retained Earnings, reducing the equity.

Use This End-Of-Period Spreadsheet to Answer the Questions That Follow