The most efficient way to accomplish closing entries is to
A) credit the income summary account for each revenue account balance.
B) debit the income summary account for each expense account balance.
C) credit the dividends account balance directly to the income summary account.
D) credit the income summary account for total revenues and debit the income summary account for total expenses.

Question

Quizplus · Accepted Answer

The most efficient way to accomplish closing entries is to credit the income summary account for total revenues and debit the income summary account for total expenses. This consolidates all revenue and expense accounts into one account, making it easier to determine the net income or loss for the period. The dividends account balance should be closed separately by crediting it directly to retained earnings rather than through the income summary account.

The Most Efficient Way to Accomplish Closing Entries Is to