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 may appear on a post-closing trial balance?
A
Service Revenue
B
Salaries Expense
C
Dividends
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 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. Temporary accounts, such as revenues, expenses, and dividends, are closed to retained earnings during the closing process.
Analyze each account provided in the problem: Service Revenue, Salaries Expense, and Dividends are temporary accounts. These are closed to Retained Earnings and do not appear on the post-closing trial balance.
Recognize that Retained Earnings is a permanent equity account: After closing entries, the updated balance of Retained Earnings reflects the net income or loss and dividends for the period. It remains open and appears on the post-closing trial balance.
Conclude that the correct account to appear on the post-closing trial balance is Retained Earnings, as it is a permanent account and not closed during the closing process.
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