Question

Which of the following is a true statement about closing the books of a corporation?A)Expenses are closed to the Expense Summary account.B)Only revenues are closed to the Income Summary account.C)Revenues and expenses are closed to the Income Summary account.D)Revenues, expenses, and the Dividends account are closed to the Income Summary account.

Answer 1

Answer:

The correct answer is letter "C": Revenues and expenses are closed to the Income Summary account.

Explanation:

Closing the accounting books of a company implies leaving in zero (0) the revenues and expenses in the income summary account and then recording the net profit or losses of the period in the balance sheet. The assets, liabilities, and retained earnings accounts are not closed yet.

Answer 2

Answer: The answer is C)Revenues and expenses are closed to the Income Summary account.  

Explanation: