Multiple Choice
Which of the following accounts may appear on 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 appear on the post-closing trial balance?
A
Retained Earnings
B
Service Revenue
C
Salaries Expense
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 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, while temporary accounts include revenues, expenses, and dividends.
Analyze each account provided: Retained Earnings is a permanent equity account and would appear on the post-closing trial balance. Service Revenue, Salaries Expense, and Dividends are temporary accounts and are closed to Retained Earnings during the closing process.
Recall the closing process: Temporary accounts are closed by transferring their balances to Retained Earnings. This ensures that these accounts have a zero balance and do not appear on the post-closing trial balance.
Conclude that the post-closing trial balance will only include Retained Earnings from the given options, as it is a permanent account that remains open after the closing process.
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