Which of the following is correct?
A)Retained Earnings normally has a debit balance.
B)Retained Earnings normally has a credit balance.
C)Retained Earnings is closed at the end of the fiscal year.
D)Retained Earnings is a nominal account.
E)None of these answer choices is correct.

Question

Quizplus · Accepted Answer

Retained Earnings is a part of the owner's equity, and it represents the accumulated profits of the business from the beginning, net of any dividends paid to the shareholders. Since it is a part of the owner's equity, it has a credit balance, which increases by profits earned and decreases by dividends paid. Retained Earnings is a permanent account that is not closed at the end of the fiscal year. Only temporary or nominal accounts (such as sales, expenses, dividends) are closed at the end of the fiscal year.

Which of the Following Is Correct