the purpose of the post closing trial balance is to

The Post Closing Trial Balance shows the balance of each active account for the period. Rather than the Debit and Credit columns of the standard Trial Balance, a single total amount column is provided labeled Debit/. Here are a few key differences between the adjusted trial balance and closing-trial balance. Both represent journal ledger accounts and essential bookkeeping information. The sum of all debit and credit accounts should always be the same. Now you will use a three-column trial balance sheet which should closely resemble this one. However, if that’s not the case, look at your subsidiary ledgers to make sure that all of your transactions have been properly posted.

It also verifies that debits still equal credit amounts after the closing entries, which ensures that you start the next accounting period with the correct amounts. This process closes out the revenue, expense, drawing or dividend accounts.


It accounts for prepaid and depreciation expenses, what the company has paid for insurance and accumulated depreciation, among other line items. Just like with the unadjusted trial balance, its purpose is to see if the debits and credits are equal once you include all the adjusting entries. The unadjusted trial balance is the first trial balance you’ll prepare for the accounting period after you’ve recorded and posted all transactions to the ledger.

the purpose of the post closing trial balance is to

For information, see Financial Report Builder and Financial Statement Layouts. DebitsDebit represents either an increase in a company’s expenses or a decline in its revenue. Rebekiah has taught college accounting and has a master’s in both management and business. The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

What is a post closing trial balance?

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If there are any temporary accounts on this trial balance, you would know that there was an error in the closing process. After preparation of financial statements, last step of accounting cycle is the closure of books of account for an accounting period. This involves posting closing entries and preparing a post-closing trial balance to ensure that all temporary accounts have been closed appropriately. The unadjusted trial balance is the first trial balance youll prepare for the accounting period after youve recorded and posted all transactions to the ledger.

What is the purpose of the post-closing trial balance?

Temporary accounts are accounts whose balances are zeroed out at the end of each accounting period. When a new accounting period opens, these accounts are used again and will accrue balances until the accounting period comes to an end. At that time, the accounts will be closed to permanent accounts and once again have a zero balance. When preparing the post-closing trial balance, you’ll include a header that details the company’s name, what you’re naming the balance sheet and the closing date of the accounting period. Underneath, you’ll include columns for account title, debit totals and credit amounts with a total of the debit and credit columns at the bottom. At closing day of fiscal year, the business transfers temporary account balances to the permanent owner’s equity account or capital account.

An accountant prepares this trial balance after passing the adjusting entries. Its purpose is to test the equality of debits and credits after the adjusting entries. It also serves as the basis for preparing the financial statement. However, if the debit and credit columns dont equal each other, youll likely need to review your entries as you may have missed transferring one to or from the ledgers correctly. The post-closing trial balance is the last step in the accounting cycle for a reporting period after the unadjusted and adjusted trial balances. However, if the debit and credit columns don’t equal each other, you’ll likely need to review your entries as you may have missed transferring one to or from the ledgers correctly. A Post-closing Trial Balance lists all the balance sheet accounts with a non-zero balance at the end of a reporting period.

Post-closing Trial BalanceDefined with Examples & Samples

A post-closing trial balance is the final trial balance prepared before the new accounting period begins. Used to make sure that beginning balances are correct, the post-closing trial balance is also used to ensure that debits and credits remain in balance after closing entries have been completed. Check these areas to make sure you’re including all the adjusting entries you need to for the accounting period before closing the accounting period.

A simple difference between adjusted and unadjusted trial balances is the amounts in the adjusting entries. Both nominal and real accounts come in the adjusted trial balance. For instance, Nominal accounts are the ones that have entries from the income statement, and real accounts consist of entries from the balance sheet.

Its main purpose is to test how equal the company’s debits and credits are before you account for any month-end adjustments. Once you’ve included all debits and credits, check to see if they match. If they don’t, you’ll likely need to do some research to find out why. You may need to add some debits or credits you’ve missed or you may discover you’ve performed another action incorrectly. The post-closing trial balance gets prepared after closing entries. These entries include shifting information from temporary accounts to the profit or loss statement. Usually, it involves zeroing the existing balances in those temporary accounts.

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Post-closing entries may need to be made if errors were found between credit and debit transactions in the unadjusted trial balance sheet. The post-closing trial balance is the report that lists all the accounts of a company and their balances after all adjustments and closing entries have been made. The creation of the post-closing trial balance is the last thing that occurs at the end of an accounting cycle.

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