The dividends account is a permanent account.

Dividends Account

An account in the general ledger that records payouts to shareholders from the company's earnings.

Permanent Account

An account that is not closed at the end of the accounting period and carries its ending balance into the next period, typically including assets, liabilities, and equity accounts.

Identify the differences between temporary and permanent accounts and their importance in the context of financial reporting.

Verified Answer

Yevheniia SikirynaMay 22, 2024

Final Answer :

False

Explanation :

The dividends account is a temporary account used to track dividend payments during an accounting period and is closed to retained earnings at the end of the period.

Learning Objectives

Identify the differences between temporary and permanent accounts and their importance in the context of financial reporting.

The dividends account is a permanent account.

Definitions

Learning Objectives

Learning Objectives

Related questions