Monet's Paint Co. had closing entries which included $7,300 of revenues, $3,000 of expenses, and $300 of dividends. The net change in retained earnings was $4,000.

Question

Quizplus · Accepted Answer

The net change in retained earnings is calculated as follows:
Net change in retained earnings = Revenues - Expenses - Dividends
= $7,300 - $3,000 - $300
= $4,000
Since the net change in retained earnings is equal to $4,000, the closing entries are correct.