Multiple Choice
Which of the following accounts is listed in 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 may appear on a post-closing trial balance?
A
Dividends
B
Rent Expense
C
Accounts Payable
D
Service Revenue
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 total debits equal total credits and to confirm that only permanent accounts (balance sheet accounts) remain open.
Identify the types of accounts: Permanent accounts include assets, liabilities, and equity accounts. Temporary accounts, such as revenues, expenses, and dividends, are closed to retained earnings during the closing process.
Analyze each account provided in the problem: Dividends, Rent Expense, and Service Revenue are temporary accounts and are closed at the end of the accounting period. Accounts Payable is a liability account, which is a permanent account and remains open.
Conclude that only permanent accounts, such as Accounts Payable, will appear on the post-closing trial balance. Temporary accounts will not appear because they have been closed.
Verify your understanding by reviewing the classification of accounts and the closing process to ensure you can identify which accounts are permanent and which are temporary in future problems.
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