Multiple Choice
Which of the following accounts would NOT appear on the post-closing trial balance?
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3. Accrual Accounting Concepts
Post-Closing Trial Balance
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Which of the following accounts will NOT appear on the post-closing trial balance?
A
Service Revenue
B
Accounts Payable
C
Retained Earnings
D
Equipment
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 (balance sheet accounts) remain. Temporary accounts (income statement accounts) are closed to retained earnings.
Identify the types of accounts listed in the problem: Service Revenue is a temporary account, while Accounts Payable, Retained Earnings, and Equipment are permanent accounts.
Recall that temporary accounts, such as revenue, expenses, and dividends, are closed at the end of the accounting period and do not appear on the post-closing trial balance.
Recognize that permanent accounts, including assets, liabilities, and equity accounts, remain open and are included in the post-closing trial balance.
Conclude that Service Revenue will NOT appear on the post-closing trial balance because it is a temporary account that has been closed to Retained Earnings.
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