Which Of The Following Account's Balance Will Change Between The Adjusted Trial Balance And The Post-Closing Trial Balance?

The correct option of this multiple choice question (mcq) is D, as Retained Earnings are affected by Closing Entries. After the preparation of Adjusted Trial Balance, the closing entries are recorded to close all the Temporary Accounts (Revenues, Expenses, Dividends) and all the Permanent Accounts (Assets, Liabilities and Equity) are recorded in Post-Closing Trial Balance in order to transfer these accounts’ balances to the next accounting period.

Net Income for the current accounting period and Dividends are transferred to Retained Earnings during closing entry process. Net income is added to opening retained earnings while dividends is deducted. If there is net loss, then it is deducted from beginning retained earnings. The final balance is ending retained earnings which is transferred to balance sheet under equity section.

The option A i.e., Common Stock is not affected by closing entry process. It is an equity account which is transferred to post-closing trial balance.

The option B i.e., Prepaid Rent is also not affected between the adjusted trial balance and the post-closing trial balance. Prepaid rent is affected after the adjusting entries are recorded. But as these are current assets, so its balance is transferred to post-closing trial balance at the end of the current accounting cycle. If prepaid rent is fully expired, then it is removed from Books of Accounts of the company’s business as all the benefits associated with it are utilized by the company during the period.

The option C of this multiple choice question is not correct choice here as Unearned Service Revenue is a current liability which is affected by adjusting entry, but it is not affected by closing entries. Unearned service revenue is transferred to post-closing trial balance to be shown in the balance sheet on liabilities & equity side or right side of the next accounting period.