Awn Services paid a dividend of $8,700 during the current year.The entry to close the dividend account at the end of the year is:
A) $$\begin{array} { | c | r | r | }
\hline \text { Dividends } & 8,700 & \
\hline \text { Cash } & & 8,700 \
\hline
\end{array}$$
B) $$\begin{array} { | c | c | c | }
\hline \text { Retained earnings } & \mathbf { 8 } , 700 & \
\hline \text { Dividends } & & \mathbf { 8 , 7 0 0 } \
\hline
\end{array}$$
C) $$\begin{array} { | l | r | r | }
\hline \text { Dividends } & 8,700 & \
\hline \text { Retained earnings } & & 8,700 \
\hline
\end{array}$$
D) $$\begin{array} { | c | c | c | }
\hline \text { Common Stock } & 8,700 & \
\hline \text { Dividends } & & 8,700 \
\hline
\end{array}$$
E) $$\begin{array} { | c | c | c | }
\hline \text { Income Summuary } & 8,700 & \
\hline \text { Retained earnings } & & 8,700 \
\hline
\end{array}$$

Question

Awn Services paid a dividend of $8,700 during the current year.The entry to close the dividend account at the end of the year is:
A) $$\begin{array} { | c | r | r | } 
\hline \text { Dividends } & 8,700 & \
\hline \text { Cash } & & 8,700 \
\hline
\end{array}$$
B) $$\begin{array} { | c | c | c | } 
\hline \text { Retained earnings } & \mathbf { 8 } , 700 & \
\hline \text { Dividends } & & \mathbf { 8 , 7 0 0 } \
\hline
\end{array}$$
C) $$\begin{array} { | l | r | r | } 
\hline \text { Dividends } & 8,700 & \
\hline \text { Retained earnings } & & 8,700 \
\hline
\end{array}$$
D) $$\begin{array} { | c | c | c | } 
\hline \text { Common Stock } & 8,700 & \
\hline \text { Dividends } & & 8,700 \
\hline
\end{array}$$
E) $$\begin{array} { | c | c | c | } 
\hline \text { Income Summuary } & 8,700 & \
\hline \text { Retained earnings } & & 8,700 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The entry to close the dividend account at the end of the year is to debit the Retained Earnings and credit the Dividends account for the same amount. Therefore, the journal entry to close the dividend account for Awn Services would be:

Retained Earnings       $8,700
    Dividends                      $8,700

Option B is the only option that correctly shows the debit and credit accounts for the entry.

Awn Services Paid a Dividend of $8,700 During the Current Dividends 8,700 Cash 8,700\begin{array} { | c | r | r | } \hline \text { Dividends } & 8,700 & \\\hline \text { Cash } & & 8,700 \\\hline\end{array} Dividends Cash ​8,700​8,700​​

Awn Services Paid a Dividend of $8,700 During the Current $\begin{array} { | c | r | r | } \hline \text { Dividends } & 8,700 & \\\hline \text { Cash } & & 8,700 \\\hline\end{array}$