Asked by
Patricia Celine
on Dec 16, 2024
Verified
Which permanent account is affected by the closing entries?
A) Income Summary
B) Common Shares
C) Retained Earnings
D) Cash
Retained Earnings
The portion of net earnings not distributed as dividends to shareholders, but retained by the company to be reinvested in its core business or to pay debt.
Permanent Account
Accounts that carry their ending balances over into the next accounting period, typically including assets, liabilities, and equity accounts.
- Comprehend the aim and procedure involved in the formulation of closing entries within the accounting cycle.
- Comprehend the impact of closing entries on the shareholders' equity section of the statement of financial position.
Verified Answer
JS
Learning Objectives
- Comprehend the aim and procedure involved in the formulation of closing entries within the accounting cycle.
- Comprehend the impact of closing entries on the shareholders' equity section of the statement of financial position.