Closing entries move all the yearly data for revenues,expenses,and dividends into the Retained Earnings account.

Question

Quizplus · Accepted Answer

Closing entries are journal entries made at the end of an accounting period to transfer the balances of temporary accounts such as revenues, expenses, and dividends to the Retained Earnings account. This is done in order to start the next accounting period with a zero balance in the temporary accounts and to update the balance of the Retained Earnings account with the net income or loss of the period. Therefore, the statement "Closing entries move all the yearly data for revenues, expenses, and dividends into the Retained Earnings account" is true.

Closing Entries Move All the Yearly Data for Revenues,expenses,and Dividends