An error is indicated if the following account appears on the post-closing trial balance with a positive balance.

Question

Quizplus · Accepted Answer

Depreciation expense should not appear on the post-closing trial balance as it is a temporary account that is closed at the end of the accounting period. A positive balance in this account indicates that some of the depreciation expense has not been properly allocated to the related assets, resulting in an overstatement of the expenses and an understatement of the assets on the financial statements. Therefore, this error should be corrected by adjusting the account and transferring the unallocated depreciation to the respective assets.

An Error Is Indicated If the Following Account Appears on the Post-Closing