Why is the Dividends account not closed to the Income Summary account when closing entries are prepared?

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Accounting Introduction To Financial Accounting

ISBN: 9781517089719

1st Edition

Authors: Henry Dauderis, David Annand

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Question Posted: Apr 26, 2016 09:31 AM

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The payment of dividends reduces cash. If the Cash account is reduced with a credit, why is the Dividends account debited when dividends are paid?
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Why is the Dividends account not closed to the Income Summary account when closing entries are prepared?

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Accounting Introduction To Financial Accounting

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