Question

The closing entry for expenses includes_____________.

a. A debit to Revenues and a credit to all expense accounts.
b. A debit to Dividends and a credit to all expense accounts.
c. A debit to Retained Earnings and a credit to all expense accounts.
d .A debit to Revenues and a credit to Retained Earnings.

Answer 1

c. A debit to Retained Earnings and a credit to all expense accounts.

Step-by-step explanation:

At the end of the year, the revenue and expenses are closed into the retained earnings account.

The revenue account usually has a credit balance and as such is closed by debiting it and crediting retained earnings.

The expense account is ordinarily a debit balance and as such is closed by crediting it and debiting the retained earnings account.