After the closing entries have been posted, all temporary accounts should have ____.   Select one: a. either a debit or credit balance b. a zero balance c. a debit balance d. a credit balance

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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After the closing entries have been posted, all temporary accounts should have ____.
 
Select one:
a. either a debit or credit balance
b. a zero balance
c. a debit balance
d. a credit balance
Expert Solution
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Answer)

The correct answer in the given question is (B) a Zero balance.

 

Justification

Temporary accounts are those accounts whose balances are either transferred to Income Summary Account or Directly to Retained earnings account or Capital Account. Since the balance of these accounts (debit or credit) is entirely transferred to permanent accounts, their balance is “Zero” after all closing entries are done.

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