The entry to close the expense accounts includes:
A)a debit to Retained Earnings and credits to the respective expense accounts.
B)a debit to Dividends and credits to the respective expense accounts.
C)debits to the respective expense accounts and a credit to Retained Earnings.
D)debits to the respective expense accounts and a credit to Dividends.

Question

Quizplus · Accepted Answer

The correct entry to close expense accounts involves debiting Retained Earnings and crediting the respective expense accounts to transfer the expense balances to Retained Earnings, reducing the retained earnings by the total expenses.

The Entry to Close the Expense Accounts Includes