Question 1

Which of the following accounts would NOT appear on a post-closing trial balance?

Accepted Answer

Dividends are distributed to shareholders after the closing of the accounting period, so they would not appear on the post-closing trial balance. However, the other three accounts (Common Stock, Sales Tax Payable, and Accounts Receivable) could potentially have balances that carry over to the next accounting period and would therefore appear on the post-closing trial balance.

Question 2

Closing entries are prepared for which of the following reasons?

Accepted Answer

The purpose of closing entries is to transfer the balances of temporary accounts (revenue, expense, and dividends) to the permanent capital account so that these accounts start fresh in the next accounting period. This prepares the accounts for the next accounting period.

Question 3

Which of the following do NOT appear on the post-closing trial balance?

Accepted Answer

Dividends do not appear on the post-closing trial balance because they are temporary accounts that are closed to retained earnings at the end of the accounting period.

Question 4

A company had a normal $50,000 cash balance on their adjusted trial balance.If revenues,expenses and dividends respectively were $90,000;$18,000 and $2,000 what amount of cash will be found on the post-closing trial balance?

Accepted Answer

The post-closing trial balance reflects the cash balance after closing entries. Revenues, expenses, and dividends do not affect the cash account directly in the post-closing trial balance. Therefore, the cash balance remains at $50,000.

Question 5

The account balances on the post-closing trial balance should match the balances in the:

Accepted Answer

The general ledger contains all the individual account balances, which should match the account balances on the post-closing trial balance. The general journal is where transactions are first recorded and is not used to determine account balances. The Income Statement and Statement of Retained Earnings show information about the company's performance and changes in equity, but do not contain detailed account balances.

Question 6

Which of the following accounts appear on the post-closing trial balance?

Accepted Answer

Accounts that appear on the post-closing trial balance are the permanent accounts, which include all asset, liability and equity accounts, but not temporary accounts such as revenues, expenses, and dividends. "Cash" is an asset account and is a permanent account, so it would appear on the post-closing trial balance.

Question 7

The entry to close the Dividend account includes:

Accepted Answer

The answer of The entry to close the Dividend account...

Question 8

The entry to close the expense accounts includes:

Accepted Answer

The answer of The entry to close the expense accounts...

Question 9

The entry to close the revenue accounts includes:

Accepted Answer

Revenue accounts have a credit balance, so to close these accounts, we need to debit them to bring the balance to zero. The balancing entry is a credit to Retained Earnings, as revenue increases the earnings of the company. Therefore, the correct entry to close the revenue accounts is debits to the respective revenue accounts and a credit to Retained Earnings.

Quiz 3: Adjusting and Closing Entries