Which of the following statements is correct?
A)Preparation of the post-closing trial balance is the last step in the end-of-period routine.
B)Closing entries are entered directly on the worksheet.
C)The balance of the owner's drawing account will appear on the post-closing trial balance.
D)The Balance Sheet section of the worksheet contains the data that is used to make closing entries.

Question

Quizplus · Accepted Answer

Preparation of the post-closing trial balance marks the end of the accounting cycle and is the last step in the end-of-period routine. Therefore, statement A is correct.

Statement B is incorrect as closing entries are made in the general journal and then posted to the ledger accounts, not directly on the worksheet.

Statement C is incorrect as the owner's drawing account is a temporary account that is closed at the end of the accounting period and does not appear on the post-closing trial balance.

Statement D is incorrect as the Balance Sheet section of the worksheet contains the balances of the permanent accounts, which are not affected by closing entries. Closing entries are made to the temporary accounts, which are listed in the Income Statement section of the worksheet.

Which of the Following Statements Is Correct