Multiple Choice
Which account is typically listed first in 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 would appear in a post-closing trial balance?
A
Service Revenue
B
Retained Earnings
C
Accumulated Depreciation
D
Dividends
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 and dividends) are closed to retained earnings.
Identify permanent accounts: Permanent accounts include assets, liabilities, and equity accounts such as Retained Earnings and Accumulated Depreciation. These accounts are not closed and will appear in the post-closing trial balance.
Recognize temporary accounts: Temporary accounts include revenue, expenses, and dividends. These accounts are closed to Retained Earnings during the closing process and do not appear in the post-closing trial balance.
Analyze the given accounts: Service Revenue and Dividends are temporary accounts and will not appear in the post-closing trial balance. Retained Earnings and Accumulated Depreciation are permanent accounts and will appear in the post-closing trial balance.
Conclude the solution: The accounts that would appear in the post-closing trial balance are Retained Earnings and Accumulated Depreciation, as they are permanent accounts.
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