Multiple Choice
Which of the following accounts would appear in a post-closing trial balance?
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3. Accrual Accounting Concepts
Post-Closing Trial Balance
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Which financial statement is typically prepared last in the accounting cycle, after the post-closing trial balance?
A
Balance Sheet
B
Post-Closing Trial Balance
C
Income Statement
D
Statement of Owner's Equity
Verified step by step guidance1
Understand the accounting cycle: The accounting cycle is a series of steps that businesses follow to record and report financial transactions. It includes journalizing transactions, posting to the ledger, preparing trial balances, and creating financial statements.
Identify the sequence of financial statements: The typical order of preparation is the Income Statement, followed by the Statement of Owner's Equity, and then the Balance Sheet. These statements are prepared before the post-closing trial balance.
Clarify the purpose of the post-closing trial balance: The post-closing trial balance is prepared after all closing entries are made. Its purpose is to ensure that debits equal credits and that all temporary accounts (e.g., revenues, expenses) have been closed to the owner's equity account.
Determine the financial statement prepared last: Since the post-closing trial balance is prepared after all financial statements, the Balance Sheet is typically the last financial statement prepared in the accounting cycle.
Conclude the sequence: The correct answer is the Balance Sheet, as it is prepared last in the accounting cycle before the post-closing trial balance is finalized.
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