After all closing entries are made and posted, the balance in the owners' capital accountin the ledger will be equal to:
A)Zero.
B)The beginning balance in owners' capital in the statement of changes in equity.
C)The balance of owners' capital on the post-closing trial balance.
D)The balance of owners' capital on the pre-closing trial balance.
E)Profit or loss for the year.

Question

Quizplus · Accepted Answer

The balance of owners' capital on the post-closing trial balance will be equal to the ending balance in the owners' capital account after all the closing entries have been made and posted. This balance reflects the cumulative net income or losses, as well as any capital contributions or withdrawals, for the period covered by the financial statements. Choice A is incorrect because the owners' capital account should not be zero after closing entries are made, as it represents the owners' investment in the business. Choices B, D, and E are also incorrect as they do not reflect the actual balance of owners' capital after closing entries have been made.

After All Closing Entries Are Made and Posted, the Balance