What is a post-closing trial balance?

What is a post-closing trial balance?

• A. A trial balance prepared before the closing entries are posted
• B. A trial balance prepared after the closing entries are posted
• C. A balance of permanent accounts
• D. A balance of all accounts

Answer: (B)

A post-closing trial balance is prepared after closing entries have been posted to confirm the ledger is in balance for the next period and to show that only permanent accounts remain open. After closing, revenue, expense, and withdrawal (or drawing) accounts are transferred to the owner’s equity and their balances are zeroed, so they do not appear on the post-closing trial balance. What’s left are the permanent accounts—assets, liabilities, and equity—with their ending balances. This helps verify that debits equal credits and that the books are ready for the new accounting period. If the totals don’t match, it signals an error that needs investigation. The post-closing balance is not prepared before closing (that would be an unadjusted or adjusted trial balance) and it does not include all accounts—only permanent ones.

A post-closing trial balance is prepared after closing entries have been posted to confirm the ledger is in balance for the next period and to show that only permanent accounts remain open. After closing, revenue, expense, and withdrawal (or drawing) accounts are transferred to the owner’s equity and their balances are zeroed, so they do not appear on the post-closing trial balance. What’s left are the permanent accounts—assets, liabilities, and equity—with their ending balances. This helps verify that debits equal credits and that the books are ready for the new accounting period. If the totals don’t match, it signals an error that needs investigation. The post-closing balance is not prepared before closing (that would be an unadjusted or adjusted trial balance) and it does not include all accounts—only permanent ones.