There are four closing entries. The first one is to close revenues, the second one is to close expenses, the third one is to close ____, and the last one is to close the ____.
A) Income Summary; dividends account
B) Income Summary; common stock account
C) Income Summary; assets
D) dividends account; Income Summary

Question

Quizplus · Accepted Answer

The third closing entry is to close the Income Summary account. This is done by transferring the balance of the Income Summary account to the appropriate capital account. The fourth closing entry is to close the dividends account by transferring the balance to the retained earnings account or directly to the common stock account. Therefore, choice A is the correct answer as it includes both the correct third closing entry and the correct fourth closing entry.

There Are Four Closing Entries