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The closing entry for dividends involves a debit to Retained Earnings and a credit to Dividends Declared. The debit to Retained Earnings causes a(n) in the balance of the account.

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As a result of a debit to the Retained earnings account, the balance would decrease.

What happens when Dividends are declared?

  • They are taken from the profits of the business.
  • These profits are represented by the retained earnings account.

Retained earnings are an equity account which means that they are credited when they increase. When they are debited therefore, they will see a decrease.

In conclusion, the balance would decrease.

Find out more on retained earnings at https://brainly.com/question/26251019.

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