To close the books of a company, you should:

Question

Quizplus · Accepted Answer

To close the books of a company, we need to transfer the balances of revenue and expense accounts to the income summary account, which is then closed by transferring the balance to the retained earnings account. The dividends account is also closed by transferring its balance to the retained earnings account. Therefore, we need to debit each revenue account (to transfer the balance to the income summary account), credit each expense account (to transfer the balance to the income summary account), and credit the dividends account (to close it). Option C is the only choice that follows this process.

To Close the Books of a Company, You Should