The closing entries
A) Must debit or credit one income statement account and one statement of financial position account.
B) Include closing the dividends account to income summary.
C) Are posted to the appropriate general ledger accounts.
D) All of these choices are correct.

Question

Quizplus · Accepted Answer

Closing entries are made to transfer the balances from temporary accounts to permanent accounts and are posted to the general ledger accounts to update the account balances for the new accounting period. Choices A and B are incorrect because closing entries typically involve transferring all income statement account balances to retained earnings (not to one income statement account and one statement of financial position account), and dividends are closed directly to retained earnings, not to the income summary account.

The Closing Entries