Closing entries included debits to revenues for a total of $5,000,credits to expenses for a total of $3,000,and a credit to dividends for $1,000.The net change in Retained Earnings for the month was:
A)$1,000.
B)$2,000.
C)$3,000.
D)$4,000.

Question

Quizplus · Accepted Answer

The net change in Retained Earnings is equal to the total debits to revenues minus the total credits to expenses and dividends. In this case, the total debits to revenues are $5,000, the total credits to expenses are $3,000, and the credit to dividends is $1,000. Therefore, the net change in Retained Earnings is $5,000 - $3,000 - $1,000 = $1,000.

Closing Entries Included Debits to Revenues for a Total of $5,000,credits