Multiple Choice
Which of the following accounts would NOT appear on Almway Corporation's December 31, 2024, post-closing trial balance?
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3. Accrual Accounting Concepts
Post-Closing Trial Balance
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Which of the following types of accounts are included on the post-closing trial balance?
A
Only cash and capital accounts
B
Only permanent accounts such as assets, liabilities, and owner's equity
C
Both permanent and temporary accounts
D
Only temporary accounts such as revenues and expenses
Verified step by step guidance1
Understand the purpose of a post-closing trial balance: It is prepared after closing entries are made to ensure that the ledger is balanced and only permanent accounts remain.
Identify the types of accounts: Permanent accounts include assets, liabilities, and owner's equity. Temporary accounts include revenues, expenses, and withdrawals, which are closed to the owner's equity at the end of the accounting period.
Recognize that temporary accounts are not included: Temporary accounts are closed to the owner's equity and their balances are reduced to zero, so they do not appear on the post-closing trial balance.
Focus on permanent accounts: The post-closing trial balance includes only permanent accounts such as assets, liabilities, and owner's equity because these accounts carry their balances forward to the next accounting period.
Verify the correct answer: Based on the explanation, the correct answer is 'Only permanent accounts such as assets, liabilities, and owner's equity.'
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