The closing entry process results in the balance of the Profit and loss summary account being closed to the:
A) Retained earnings account.
B) Total assets account.
C) Share capital account.
D) Total liabilities account.

Question

Quizplus · Accepted Answer

Revenue and expense accounts are closed to the Profit and loss summary account. The balance in the Profit and loss summary account is then closed to the Retained earnings account. The Dividends paid account is closed to the Retained earnings account.

The Closing Entry Process Results in the Balance of the Profit