Which of the following is a true statement about closing the books of a corporation?
A) Expenses are closed to the Expense Summary account.
B) Only revenues are closed to the Income Summary account.
C) Revenues and expenses are closed to the Income Summary account.
D) Revenues, expenses, and the dividends account are closed to the Income Summary account.

Question

Quizplus · Accepted Answer

When closing the books of a corporation, both revenues and expenses are closed to the Income Summary account. This is done to determine the net income or net loss for the period, which is then transferred to the retained earnings account. The dividends account is not closed to the Income Summary account, as it is a separate account used to record the payment of dividends to stockholders.

Which of the Following Is a True Statement About Closing