Which of the following accounts will be included in a post - closing trial balance? f the following accounts wil OA. Service Revenue OB. Interest Expense OC. Utilities Expense D. Interest Payable

Step 1 of 4

Service revenue account is of temporary nature and all the temporary accounts are closed at the closing of each accounting period. Thus, service revenue will not be included in the post-closing trial balance.

Interest expense account represents the interest expense incurred on the company’s debt obligations during the year. It is of temporary nature and all the temporary accounts are closed at the end of each accounting period. Thus, interest expense will not be included in the post-closing trial balance.

Utility expense is relevant for a particular accounting cycle. These expenses are not carried forward to the next accounting cycle. As a result, it will not appear in the post-closing ledger.

Explanation | Hint for next step

Accounts in the post-closing ledgers are carried forward to the next accounting cycle as opening balances. The post-closing trial balance is prepared after the closing entries are made. The accounts that are not closed at the end are considered the permanent account and these accounts are shown in the balance sheet (BS). 

Service revenue represents the revenue earned from providing services during an accounting cycle. Thereby, it has nothing to do with the next accounting cycle. In accordance with the matching concept, the utility expense and the interest expense related to the expenses incurred against the revenue earned during a particular accounting cycle and has nothing to do with the revenue/loss of the next accounting period.

Step 2 of 4

Interest payable represents the interest expense outstanding for payment. In other words, it refers to the interest expense that becomes due but is not paid. As a result, they are outstanding for payment in the next accounting cycle.

Interest Payable account will be included in the post-closing trial balance.

Explanation | Hint for next step

Accounts whose balances will appear as opening balance in the next accounting cycle are shown in the post-closing ledger. Interest payable represents the amount of interest outstanding for payment and thus the balance in interest payable account is relevant for the next accounting cycle. Therefore, the interest payable account will be included in the post-closing trial balance.

Step 3 of 4

Dividends are an appropriation of profit and are related to the accounting cycle for which they are declared. Dividend account is of temporary nature and all the temporary accounts are closed at the end of each accounting period. Thus, the dividend account will not be included in the post-closing trial balance.

Supplies expense is relevant for a particular accounting cycle and therefore cannot be carried forward to the next accounting cycle. As a result, it will not appear in the post-closing ledger.

Salaries expense account represents the salaries paid during the year. This account is of temporary nature and all the temporary accounts are closed at the end of each accounting period. Thus, salaries expense will not be included in the post-closing trial balance.

Explanation | Hint for next step

Accounts in the post-closing ledgers are carried forward to the next accounting cycle as opening balances. Once the closing entries are made, subsequently the post-closing trial is prepared. The accounts that are not sealed at the end are considered the permanent account and these accounts are shown in the balance sheet (BS). 

The dividend is a temporary account; it represents the amount distributed to the shareholders out of net profit earned during the period. Therefore, net income increases the amount of earnings the company can retain, and dividends reduce the amount that they did retain. 

Supplies expense represents the payment made for supplies in a relevant accounting period. Thus, it is a temporary account and is shown in the income statement. The supplies expense account will be closed down to zero.

Salaries account represents the cost incurred on human resource, it will be charged as an expense on the income statement.

In accordance with the matching concept, the supplies expense and the salaries expense incurred by the company for earning the revenue for an accounting period must be recorded in the same period. These expenses have nothing to do with the revenue/loss of the next accounting period.

Step 4 of 4

Common stock refers to the equity of the company. As a result, it is not related to one particular accounting cycle. Rather it is the foundation of the entity and will appear in the books of accounts every year.

Common Stock will be included in the post-closing trial balance.

Explanation

Post-closing trial balance represents those accounts whose balances will appear in the books of accounts of the next accounting year. The common stock refers to the equity of the entity. The common stock will be shown in the books of accounts of every accounting cycle. Therefore, common stock will be included in the post-closing trial balance.