Post closing trial balance
Following Free Online Accounting Training Tutorial on Post Closing Trial Balance will help you to understand:
- What is Post Closing Trial Balance
- Definition of Post Closing Trial Balance
- Sample of Post Closing Trial Balance
- Elements that Post Closing Trial Balance Contains
There are accounting procedures in any accounting period of any entity. The last accounting procedure for a particular accounting period is to prepare another trial balance after posting the all closing entries. Generally the company prepares another trial balance from the ledger after journalizing and posting all closing entries, which is called a post-closing trial balance.
The post-closing trial balance includes permanent accounts with their balances after journalizing and posting of all closing entries. The purpose of the post closing trial balance is prepared to prove the equality of the permanent account balances which are carried forward into the next accounting period. The all transactions with their accounts and amounts must maintain the balance exactly with those accounts and amounts which are listed on the balance sheet at the end of the accounting period. At the end of accounting period all temporary accounts will have zero balances, so the post-closing trial balance will enclose only balance sheet accounts.
A post-closing trial balance will work as evidence which will ensure that a company has properly journalized and posted the closing entries as well as it will show that, the accounting equation is in balance at the end of the accounting period. But as trial balance does, it does not prove that journalizing or the ledger is correct. Though there are numerous errors exists the post-closing trial balance still will balance. For example post closing trial balances will balance if a transaction is totally omitted from journalized and posted or if a transaction is journalized and posted twice. The remaining accounts in the general ledger are temporary accounts. After posted the all closing entries, each temporary account has a zero balance.