The correct answer is D. Prepaid insurance is an asset account which fluctuates on an annual basis but is never closed. The security system for this website has been triggered. Completing the challenge below proves you are a human and gives you temporary access.
Learn how to write closing journal entries for revenue, expense, and dividend accounts. Comprehend income summaries. Example – As of 31st March, YYYY if the ABC and Co. had Cash at Bank amounting to 2,50,000, then that amount will be carried forward (c/f) as opening bank balance in next accounting year.
d-Adjusted Trial Balance
A post-closing trial balance lists the assets, liabilities, and equity accounts alone. Closing entries are made on an annual basis to transfer balances from temporary accounts to permanent accounts. Temporary accounts are profit and loss statement accounts or member or shareholder distributions of equity which are offset to retained earnings. A snippet of the cash account will help to develop an understanding of all personal and real accounts whose balances are carried forward to the next accounting period. Explore what post-closing trial balance is, see its purpose and the difference from adjusted and unadjusted trial balance, and see examples of post-closing entries. Understand closing entries in accounting.
If the bank balance increased by 2,00,000, then at the end of the accounting year Cash at Bank would become 4,50,000. This amount will be again c/f onto the next accounting period and the cycle keeps going. The debit and credit rules for the three types of accounts are dictated by the golden rules of accounting. These accounts are called personal accounts, real accounts, and nominal accounts.