Which of the following accounts is NOT generally closed at the end of the accounting cycle?

• A. Service Revenue
• B. Dividends
• C. Salaries Expense
• D. Retained Earnings

Answer: (D)

Verified step by step guidance

1. Understand the concept of closing entries: Closing entries are made at the end of the accounting cycle to transfer the balances of temporary accounts (e.g., revenues, expenses, and dividends) to permanent accounts (e.g., Retained Earnings). Temporary accounts are reset to zero for the next accounting period.
2. Identify temporary accounts: Temporary accounts include Service Revenue, Dividends, and Salaries Expense. These accounts are closed because they pertain to a specific accounting period and need to start fresh in the next period.
3. Recognize permanent accounts: Permanent accounts, such as Retained Earnings, are not closed at the end of the accounting cycle. These accounts carry their balances forward to the next accounting period.
4. Analyze the question: The problem asks which account is NOT generally closed at the end of the accounting cycle. Based on the explanation above, Retained Earnings is a permanent account and is not closed.
5. Conclude the reasoning: Service Revenue, Dividends, and Salaries Expense are temporary accounts and are closed, while Retained Earnings is a permanent account and remains open, making it the correct answer to the question.