Multiple Choice
Which of the following accounts may appear on a 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 would NOT appear on the post-closing trial balance?
A
Service Revenue
B
Retained Earnings
C
Equipment
D
Accounts Payable
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 and do not appear on this trial balance.
Identify the types of accounts listed in the problem: Service Revenue is a temporary account, while Retained Earnings, Equipment, and Accounts Payable are permanent accounts.
Recall that temporary accounts, such as revenue, expenses, and dividends, are closed at the end of the accounting period. These accounts are reset to zero and do not appear on the post-closing trial balance.
Recognize that permanent accounts, including assets (e.g., Equipment), liabilities (e.g., Accounts Payable), and equity (e.g., Retained Earnings), remain open and are included in the post-closing trial balance.
Conclude that Service Revenue, being a temporary account, would NOT appear on the post-closing trial balance, while Retained Earnings, Equipment, and Accounts Payable would appear.
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