For 2018 , Broadview Company had revenues in excess of expenses. Which statement describes Broadview 's closing entries at the end of 2018 ? (Assume there is only one closing entry for both revenue and expenses.)

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

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

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

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

Question

Business

Beau Koch

21 September, 16:12

For 2018 , Broadview Company had revenues in excess of expenses. Which statement describes Broadview 's closing entries at the end of 2018 ? (Assume there is only one closing entry for both revenue and expenses.)

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

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

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

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

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Answers (1)

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Monteen · Answer 1

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

Explanation:

It is provided that, revenues are much more than expenses, therefore the net difference of revenues and expenses will be transferred to retained earnings.

Retained earnings balance will increase as the net income is more.

Therefore, retained earnings will be credited.

further to reverse and close the entire revenues and expenses account it will be reversed, that is

Revenues will be debited and expenses will be credited.

Therefore, correct answer is

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