Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Name: Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Closing entries transfer the balances of temporary accounts (like Dividends, Revenues, and Expenses) to Retained Earnings, not directly into net income or net loss. Net income or loss is calculated before this process and affects the Retained Earnings balance.

Closing Entries Result in the Dividends Account Being Transferred into Net