Which of the following statements about the Retained Earnings account is correct?
A)Retained Earnings is a permanent account;income statement accounts are temporary.
B)Retained Earnings and income statement accounts are all temporary accounts.
C)Retained Earnings and income statement accounts are all permanent accounts.
D)Retained Earnings is a temporary account,while income statement accounts are permanent accounts.

Question

Quizplus · Accepted Answer

The Retained Earnings account,like all other balance sheet accounts,is considered a permanent account because its ending balance from one year becomes its beginning balance for the following year.In contrast,the income statement accounts (revenues and expenses)and the Dividends account are temporary accounts because they are used to track only the current year's results and then are closed before the next year's activities are recorded.

Which of the Following Statements About the Retained Earnings Account