Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.

Name: Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.
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Question

Quizplus · Accepted Answer

Closing the dividends account to Retained Earnings is necessary regardless of whether net income is greater than dividends, as it ensures that the dividends paid are properly accounted for and reflected in the Retained Earnings balance.

Closing the Dividends Account to Retained Earnings Is Not Necessary