Balances in the revenue and expense accounts will affect retained earnings at the end of the period.

Name: Balances in the revenue and expense accounts will affect retained earnings at the end of the period.
Brand: Quizplus
Rating: 4.8 (43 reviews)

Question

Quizplus · Accepted Answer

Revenue and expense accounts are closed at the end of the period and their balances are transferred to the retained earnings account, which is a component of shareholders' equity. Therefore, changes in revenue and expense accounts directly impact the retained earnings balance.

Balances in the Revenue and Expense Accounts Will Affect Retained