Edgar needs to close out $670 in the dividends account at the end of the year....

Edgar needs to close out $670 in the dividends account at the end of the year. What closing entry will he use? a. Income summary (debit) 670; dividends (credit) 670 b. Retained earnings (debit) 670; dividends (credit) 670 c. Dividends (debit) 670; income summary (credit) 670 d. Revenue (debit) 670; dividends (credit) 670 e. Cash (debit) 670 ;dividends (credit) 670

Expert Solution

Correct answer ---(b) Retained earnings (debit) 670; dividends (credit) 670

Dividends has a debit balance, in order to close dividend account it needs to be credited. Dividend Is charged on retained earnings so retained earnings will be debited .

ekkarill92 answered 2 years ago

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