The entry to record revenue earned on account includes a debit to accounts receivable and a credit to retained earnings.

Name: The entry to record revenue earned on account includes a debit to accounts receivable and a credit to retained earnings.
Brand: Quizplus
Rating: 4.9 (23 reviews)

Question

Quizplus · Accepted Answer

This is false. Recognizing revenue includes a credit to the revenue account, not retained earnings. At closing, the balance in revenue will be transferred to retained earnings, but transactions are not recorded directly to the retained earnings account.

The Entry to Record Revenue Earned on Account Includes a Debit