Which account will have a zero balance after a company has journalized and posted closing entries?

a. Service revenue.

b. Advertising Supplies.

c. Prepaid Insurance.

d. Accumulated Depreciation.

Expert Solution

The advertising supplies are reported in the balance sheet of the company. So, it will not have zero balance after recording entries and posting of the closing entries. So, this option is incorrect.

The prepaid insurance is shown in the balance sheet of the company. So, this will not have zero balance after the entries have been recorded and posted. So, this option is incorrect.

The accumulated depreciation is reported in the balance sheet of the company. So, it will not have zero balance after recording entries and posting of the closing entries. So, this option is incorrect.

Part a.

Service revenue will have a zero balance after closing entries have been journalized and posted.

Explanation

The advertising supplies are considered as current assets for the company. So, it is reported in the balance sheet. The amount of advertising supplies remaining at the end of the period is shown in the balance. So, this account will not have zero balance.

Those expenses for which payment is made in advance but their benefits will accrue to the future are known as prepaid expense. Prepaid expenses are treated as the assets of the entity. They are recognized as expense according to their period of usage. This type of expense is common in every type of business. So, prepaid insurance is reported as current asset in the balance sheet and thus will not have zero balance.

The total amount of depreciation expense that is the sum of depreciation expense that has been charged from the beginning of the useful life of the asset is the accumulated depreciation. It is shown in the balance sheet of the company and is deducted from the plant assets. So, the accumulated depreciation will not have zero balance.

Service revenue is reported in the income statement of the company and represents the amount of sales made by the company during a period. It is not reported in the balance sheet and thus will have zero balance.

The advertising supplies

Junaid answered 2 years ago

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Chapter 4-The following is the adjusted trial balance for Baker Services.AccountsDebitCreditCash$31,100Accounts Receivable30,000Prepaid Insurance3,500Office Supplies3,200Land49,000Building150,000Accumulated Depreciation—Building$14,500Equipment77,000Accumulated Depreciation—Equipment7,000Accounts Payable25,000Salaries Payable2,000Unearned Revenue26,000Mortgage Payable106,000Baker, Capital24,500Baker, Withdrawals23,000Service Revenue275,000Salaries Expense64,000Depreciation Expense—Building and Equipment5,600Supplies Expense11,000Insurance Expense14,600Utilities Expense18,000 Total$480,000$480,000There were no new capital contributions during the year. After the closing entries are posted, what is the balance in Baker, Capital? Please show your calculations:

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