Which of the following account titles would not be debited in the process of preparing closing entries for Andrew's Auto Shop?
A)Income Summary.
B)Fees Earned.
C)Dividends.
D)Retained Earnings.

Question

Quizplus · Accepted Answer

The account title "Dividends" would not be debited in the process of preparing closing entries since dividends are paid out to the owners and do not affect the company's net income. The other three account titles - Income Summary, Fees Earned, and Retained Earnings - would be debited in the process of preparing closing entries. Income Summary is used to transfer the revenues and expenses to Retained Earnings, Fees Earned is a revenue account that must be closed out, and Retained Earnings is used to record the company's net income (or loss) for the period.

Which of the Following Account Titles Would Not Be Debited