Final answer:
The after-closing balance in a revenue account will indeed always be zero because closing entries transfer the balances of all revenue accounts to a permanent equity account, making them start with a zero balance for the new period.
Step-by-step explanation:
The statement "The after-closing balance in a revenue account will always be zero" is true. In accounting, closing entries are made at the end of an accounting period to transfer the balances in temporary accounts, which include revenues, expenses, and dividends, to a permanent equity account, such as retained earnings. This process ensures that the revenue accounts start the next accounting period with a zero balance.
After a company has completed its income statement for the fiscal year, it will make closing entries by debiting all revenue accounts and crediting a summary account, which is often the income summary account. The income summary account is then closed to the retained earnings account, which is part of shareholders’ equity. Consequently, all revenue accounts reflect a zero balance after the closing process.
This zero balance in the revenue accounts reflects that the revenues earned in a specific accounting period have been accounted for and are ready to begin the new period afresh. It helps in avoiding the double counting of revenues and provides a clear view of the revenues generated in the new fiscal period.