It is obvious that an error occurred in the preparation and/or posting of closing entries if:
A)all revenue and expense accounts have zero balances.
B)the Retained earnings account is debited for the amount of the net loss for the period.
C)the income summary account is debited for the amount of net income for the period.
D)all balance sheet accounts have zero balances.
E)only permanent accounts appear on the post-closing trial balance.

Question

Quizplus · Accepted Answer

Balance sheet accounts should not have zero balances after closing entries because they are permanent accounts that carry their balances into the next accounting period. Closing entries primarily affect temporary accounts (revenues, expenses, dividends, and income summary), not permanent accounts like assets, liabilities, and equity.

It Is Obvious That an Error Occurred in the Preparation