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Asked by Paulina Martinez on Jun 14, 2024

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Which of the following accounts should be closed to Retained Earnings at the end of the fiscal year?

A) Service Revenue
B) Equipment
C) Prepaid Insurance
D) Unearned Rent

Retained Earnings

The accumulated net income of a company that is retained and reinvested in the business rather than paid out as dividends.

Service Revenue

Income earned by a company for providing services rather than selling physical goods.

Equipment

Equipment consists of the fixed assets a company uses in its operational activities to produce goods or provide services, not intended for sale.

  • Implement the method of modifying and concluding entries for income, expenditure, and dividends accounts.
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Sylvia ElenaJun 15, 2024
Final Answer :
A
Explanation :
Service Revenue is closed to Retained Earnings at the end of the fiscal year because it is an income statement account, and all income statement accounts (revenues, expenses, gains, losses) are closed to Retained Earnings to reflect the period's net income or loss. Equipment and Prepaid Insurance are asset accounts, and Unearned Rent is a liability account; none of these are closed to Retained Earnings.

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