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

Question

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

Quizplus · Accepted Answer

The entry to close Dividends would be a debit to Retained Earnings and a credit to Dividends. This is because Dividends are a distribution of profits to shareholders, and therefore reduce the amount of retained earnings available to the company.

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