For 2016, NestorCompany had revenues in excess of expenses. Which statement describes Nestor's closing entries at the end of 2016 (assume there is only one closing entry for both revenue and expenses) ?

A. Revenues will be debited, expenses will be credited, and retained earnings will be debited.

B. Revenues will be debited, expenses will be credited, and retained earnings will be credited.

C. Revenues will be credited, expenses will be debited, and retained earnings will be credited.

D. Revenues will be credited, expenses will be debited, and retained earnings will be debited.

Question

Business

Kelton Jarvis

18 July, 12:06

For 2016, NestorCompany had revenues in excess of expenses. Which statement describes Nestor's closing entries at the end of 2016 (assume there is only one closing entry for both revenue and expenses) ?

A. Revenues will be debited, expenses will be credited, and retained earnings will be debited.

B. Revenues will be debited, expenses will be credited, and retained earnings will be credited.

C. Revenues will be credited, expenses will be debited, and retained earnings will be credited.

D. Revenues will be credited, expenses will be debited, and retained earnings will be debited.

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Answers (1)

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Kenley Carr · Answer 1

Which statement describes Nestor's closing entries at the end of 2016 (assume there is only one closing entry for both revenue and expenses) ?

Explanation:

A. Revenues will be debited, expenses will be credited, and retained earnings will be debited.

Closing entries, also called closing journal entries, are entries made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts. In other words, the temporary accounts are closed or reset at the end of the year