The first step in the closing process is to close
A) the drawing account.
B) the capital account.
C) the revenue accounts.
D) the expense accounts.

Question

Quizplus · Accepted Answer

The first step in the closing process is to close the revenue accounts. This involves transferring the balances of all revenue accounts to the income summary account. This is necessary to determine the net income or loss for the period. After the revenue accounts are closed, the next step is to close the expense accounts, then the income summary account is closed to the retained earnings account. Finally, the dividends account is closed to the retained earnings account. Therefore, the correct answer is C.

The First Step in the Closing Process Is to Close