Multiple Choice
Which of the following accounts would appear on the post-closing trial balance?
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3. Accrual Accounting Concepts
Post-Closing Trial Balance
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A post-closing trial balance would show a zero balance in which one of the following accounts?
A
Retained Earnings
B
Cash
C
Service Revenue
D
Accounts Payable
Verified step by step guidance1
Step 1: 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 all temporary accounts (revenues, expenses, and dividends) have been closed to retained earnings.
Step 2: Identify the types of accounts that are temporary. Temporary accounts include revenue accounts, expense accounts, and dividend accounts. These accounts are closed at the end of the accounting period.
Step 3: Recognize that permanent accounts (assets, liabilities, and equity accounts like Retained Earnings) are not closed and will have balances carried forward to the next accounting period.
Step 4: Analyze the given accounts. Service Revenue is a temporary account and would have a zero balance in the post-closing trial balance because it is closed to Retained Earnings. Cash, Accounts Payable, and Retained Earnings are permanent accounts and will retain their balances.
Step 5: Conclude that the account with a zero balance in the post-closing trial balance is Service Revenue, as it is a temporary account that has been closed.
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