Final answer:
In closing entries, Revenue accounts and sometimes Dividend accounts are credited to transfer their balances to the Retained Earnings, recognizing income earned and distribution of profits to shareholders. Expense accounts are debited to reflect costs incurred.
Step-by-step explanation:
Regarding closing entries in accounting, they are part of the end-of-period processing which helps to reset the balances of temporary accounts. Temporary accounts include Revenue, Expense, and Dividend accounts, among others, and are used to track transactions during an accounting period. At the end of the period, their balances are transferred to permanent accounts so that temporary accounts start the new period with a zero balance.
The specific accounts which are credited during closing entries are Revenue and sometimes Dividend accounts. Revenues are credited to transfer their balances to the Retained Earnings, which forms part of the Equity account in the balance sheet. This is done to recognize the income made during the period. Dividend accounts, when used, may also be credited to reflect the distribution of profits to shareholders, which affects Equity but is not retained in the business.
Expense accounts, on the other hand, are debited in closing entries to transfer their balances out of the accounts and reduce the overall equity, reflecting the costs incurred during the period.