Multiple Choice
Select the statement below that best describes 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 Almway Corporation's December 31, 2024, post-closing trial balance?
A
Service Revenue
B
Cash
C
Accounts Payable
D
Retained Earnings
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 debits equal credits and to confirm that only balance sheet accounts remain open.
Identify the types of accounts that appear on a post-closing trial balance: Only permanent accounts (assets, liabilities, and equity accounts) are included, as temporary accounts (revenues, expenses, and dividends) are closed to Retained Earnings.
Analyze each account listed in the problem: Service Revenue is a temporary account, while Cash, Accounts Payable, and Retained Earnings are permanent accounts.
Recognize that temporary accounts like Service Revenue are closed to Retained Earnings during the closing process, meaning they will not appear on the post-closing trial balance.
Conclude that the account that would NOT appear on Almway Corporation's December 31, 2024, post-closing trial balance is Service Revenue.
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