To close revenue accounts, a company must debit Retained Earnings because Revenue has a credit balance and debits must equal credits.

Name: To close revenue accounts, a company must debit Retained Earnings because Revenue has a credit balance and debits must equal credits.
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Question

Quizplus · Accepted Answer

To close revenue accounts, a company credits the revenue accounts to reduce their balance to zero and debits an income summary or directly debits Retained Earnings, not the other way around.

To Close Revenue Accounts, a Company Must Debit Retained Earnings