There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____.
A) revenues, expenses, income summary, dividends
B) expenses, assets, income summary, capital stock
C) retained earnings, dividends, income summary, assets
D) dividends, income summary, expenses, revenues

Question

Quizplus · Accepted Answer

The first closing entry is to close revenues, which involves transferring the balance of all revenue accounts to the income summary account. The second closing entry is to close expenses, which involves transferring the balance of all expense accounts to the income summary account. The third closing entry is to close income summary, which involves transferring the balance of the income summary account to the retained earnings account. The last closing entry is to close dividends, which involves transferring the balance of the dividends account to the retained earnings account. Therefore, choice A is the best answer as it correctly identifies the four closing entries in the order they should be made.

There Are Four Closing Entries