Answer each of the following questions (a-c)with a separate short paragraph per question.

(a)What is the difference between a real account and a nominal account? Give an example of each type of account.Why is this distinction important for the closing process?
(b)What two purposes are served in making closing entries?
(c)Why is the Dividends account closed directly to Retained Earnings rather than to the Income Summary account?

Question

Answer each of the following questions (a-c)with a separate short paragraph per question.
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(a)What is the difference between a real account and a nominal account? Give an example of each type of account.Why is this distinction important for the closing process?
(b)What two purposes are served in making closing entries?
(c)Why is the Dividends account closed directly to Retained Earnings rather than to the Income Summary account?

Quizplus · Accepted Answer

The Answer of Answer each of the following questions (a-c)with a separate short paragraph per question.
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(a)What is the difference between a real account and a nominal account? Give an example of each type of account.Why is this distinction important for the closing process?
(b)What two purposes are served in making closing entries?
(c)Why is the Dividends account closed directly to Retained Earnings rather than to the Income Summary account?

Answer Each of the Following Questions (A-C)with a Separate Short