Question

select all that apply
which statements below are true regarding permanent and temporary accounts?
temporary accounts will appear on a post-closing trial balance.
temporary accounts are reported on the income statement.
permanent accounts are reported on the balance sheet.
permanent accounts will appear on a post-closing trial balance.
temporary accounts have a balance for one period only.
retained earnings is a permanent account, but dividends is a temporary account.

Explanation:

1. Temporary accounts (revenues, expenses, dividends) are closed at the end of each period, so they do not appear on a post-closing trial balance.
2. Temporary accounts track activity for a single accounting period and their balances are used to prepare the income statement before being reset to zero.
3. Permanent accounts (assets, liabilities, equity including Retained Earnings) carry balances across periods, are reported on the balance sheet, and are the only accounts included on a post-closing trial balance.
4. Dividends are a temporary account because they are closed to Retained Earnings at the end of the period, while Retained Earnings is a permanent equity account that accumulates over time.

Answer:

• Temporary accounts are reported on the income statement.
• Permanent accounts are reported on the balance sheet.
• Permanent accounts will appear on a post-closing trial balance.
• Temporary accounts have a balance for one period only.
• Retained Earnings is a permanent account, but Dividends is a temporary account.