Which document is prepared after the closing entries are posted to ensure all accounts balance for the new period?

Which document is prepared after the closing entries are posted to ensure all accounts balance for the new period?

• A. Trial Balance
• B. Post-closing trial balance
• C. Closing entries
• D. Permanent accounts

Answer: (B)

After closing entries are posted, a post-closing trial balance is prepared to confirm the books balance for the new period. The closing entries transfer the totals from revenue, expense, and drawing (or withdrawals) accounts to retained earnings, so those temporary accounts start at zero in the next period. The post-closing trial balance then includes only permanent accounts—assets, liabilities, and equity (including retained earnings)—and it shows that debits still equal credits after closings. This step ensures the ledger is in proper balance before new transactions begin.

After closing entries are posted, a post-closing trial balance is prepared to confirm the books balance for the new period. The closing entries transfer the totals from revenue, expense, and drawing (or withdrawals) accounts to retained earnings, so those temporary accounts start at zero in the next period. The post-closing trial balance then includes only permanent accounts—assets, liabilities, and equity (including retained earnings)—and it shows that debits still equal credits after closings. This step ensures the ledger is in proper balance before new transactions begin.