Multiple Choice
Which financial statement is typically prepared last in the accounting cycle?
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3. Accrual Accounting Concepts
Post-Closing Trial Balance
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following account categories are included in a post-closing trial balance?
A
Both permanent and temporary accounts
B
Only permanent accounts (assets, liabilities, and equity)
C
Only asset and expense accounts
D
Only temporary accounts (revenues, expenses, and 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 remain.
Recognize the difference between permanent and temporary accounts: Permanent accounts include assets, liabilities, and equity, while temporary accounts include revenues, expenses, and dividends.
Note that temporary accounts are closed to the retained earnings account during the closing process, meaning they will not appear in the post-closing trial balance.
Identify the accounts that remain in the post-closing trial balance: These are the permanent accounts, which include assets, liabilities, and equity.
Conclude that the post-closing trial balance includes only permanent accounts, as temporary accounts are closed and their balances are reset to zero.
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