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Post-Closing Trial Balance

The post-closing trial balance is a listing of all balance sheet accounts at the end of a reporting period, with no revenue, expense, or summary accounts since they have been closed to retained earnings. It contains account numbers, descriptions, debit and credit balances, and is used to verify that total debits equal total credits, allowing transactions for the next period to be recorded. While accounting software requires balanced journal entries, a post-closing trial balance is still useful for manual accounting to check the trial balance is balanced before closing books.

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761 views

Post-Closing Trial Balance

The post-closing trial balance is a listing of all balance sheet accounts at the end of a reporting period, with no revenue, expense, or summary accounts since they have been closed to retained earnings. It contains account numbers, descriptions, debit and credit balances, and is used to verify that total debits equal total credits, allowing transactions for the next period to be recorded. While accounting software requires balanced journal entries, a post-closing trial balance is still useful for manual accounting to check the trial balance is balanced before closing books.

Uploaded by

Camellia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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What is a post-closing trial balance?

A post-closing trial balance is a listing of all balance sheet accounts containing balances at the
end of a reporting period. The post-closing trial balance contains no revenue, expense, or
summary account balances, since these temporary accounts have all been closed and their
balances moved into the retained earnings account in the balance sheet.

The post-closing trial balance contains columns for the account number, account description,
debit balance, and credit balance. It will likely not contain "Post Closing Trial Balance" in the
header, since few accounting computer systems use this designation. Instead, it will use the
standard "Trail Balance" report header.

You use the post-closing trial balance to verify that the total of all debit balances equals the total
of all credit balances, which should net to zero. Once you have ensured that this is the case, you
can begin recording accounting transactions for the next accounting period.

Accounting software requires that your journal entries balance before it allows you to post them
to the general ledger, so it is essentially impossible to have an unbalanced trial balance. Thus,
the post-closing trial balance is only useful if you are manually preparing accounting information.

Example of a Post-Closing Trial Balance

Note that there are no temporary accounts listed in the following post-closing trial balance:

ABC Company
Trial Balance
June 30, 20XX

Account Account
Number Description Debit Credit

1000 Cash $105,000

1500 Accounts receivable 320,000

2000 Inventory 500,000

3000 Fixed assets 2,000,000

3100 Accumulated depreciation (480,000)

4000 Accounts payable $195,000

4500 Accrued expenses 108,000

5000 Retained earnings 642,000

5500 Common stock 1,500,000

Totals $2,445,000 $2,445,000

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