Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $6,000 in dividends during the current year. The entry to close the dividends account at the end of the year is:
Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $6,000 in dividends during the current year. The entry to close the dividends account at the end of the year is:
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 18EB: Tart Restaurant Holdings, Incorporated began the year with a retained earnings balance of $950,000....
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Transcribed Image Text:Multiple Choice
Debit Retained earnings $6,000; credit Dividends $6,000
Debit Dividends $6,000; credit Cash, $6,000
Debit Dividends $6,000; credit Retained earnings $6,000
Debit Income Summary $6,000; credit Retained earnings $6,000
Debit Retained earnings $6,000; credit Salary Expense $6,000
20
Noxt
Transcribed Image Text:Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $6,000 in dividends during the current year. The entry to close the
dividends account at the end of the year is:
Multiple Choice
Debit Retained earnings $6.000; credit Dividends $6,000
Debit Dividends $6,000; credit Cash, $6,000
Debit Dividends $6.000, credit Retained earnings $6,000
Dehit Incnme Summan $6 000credit Retained earninge C6000
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Solution:
Closing entries are prepared at the end of accounting period to close temporary accounts to income summary or retained earnings.
Temporary accounts are those accounts that are not carried to next accounting period and same is not part of balance sheet.
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