Post-Closing Trial Balance
Module 2:
Completing the Accounting Cycle
Duration:
45-60 minutes
Level:
Beginner to Diploma-Level
Lesson Objectives
➛ Understand what a post-closing trial balance is
➛ Explain why it is prepared
➛ Identify which accounts appear in the post-closing trial balance
➛ Prepare a post-closing trial balance correctly
➛ Distinguish between adjusted, post-closing, and unadjusted trial balances
Key Vocabulary
➛ Post-Closing Trial Balance
➛ Closing Entries
➛ Permanent Accounts
➛ Temporary Accounts
➛ Accounting Period
➛ Debit Balance
➛ Credit Balance
What Is a Post-Closing Trial Balance?
A Post-Closing Trial Balance is prepared
➛ After closing entries are completed
➛ After temporary accounts are closed
➛ To ensure only permanent accounts remain open
It confirms that
The books are balanced
The company is ready for the next accounting period
Accounts Included
Assets ✓
Liabilities ✓
Capital ✓
Order of the Accounting Cycle
1. Journal Entries
2. Ledger Posting
3. Unadjusted Trial Balance
4. Adjusting Entries
5. Adjusted Trial Balance
6. Financial Statements
7. Closing Entries
8. Post-Closing Trial Balance
Format of a Post-Closing Trial Balance
Account Name
Cash
Equipment
Accounts Payable
Capital
Totals
Cash
Equipment
Accounts Payable
Capital
Totals
Debit
xxx
xxx
___
___
XXX
xxx
xxx
___
___
XXX
Credit
___
___
xxx
xxx
XXX
___
___
xxx
xxx
XXX
➛ Only permanent accounts
➛ Debits must equal credits
Identify Permanent Accounts
Which of the following appear in a post-closing trial balance?
➛ Cash
➛ Service Revenue
➛ Accounts Payable
➛ Rent Expense
➛ Capital
➛ Drawings
➛ Equipment
Select all that apply
True or False
➛ Revenue accounts appear in the post-closing trial balance.
➛ Post-closing trial balance is prepared after closing entries.
➛ Only balance sheet accounts appear.
➛ The purpose is to prepare financial statements.
➛ Total debits must equal total credits.
Prepare a Post-Closing Trial Balance
After closing entries, the following balances remain
Cash
Accounts Receivable
Equipment
Accumulated Depreciation
Accounts Payable
Loan Payable
Capital
Accounts Receivable
Equipment
Accumulated Depreciation
Accounts Payable
Loan Payable
Capital
9,500
2,000
15,000
4,000
3,500
6,000
13,000
2,000
15,000
4,000
3,500
6,000
13,000
Task
Prepare the post-closing trial balance.
Mini Case Study
A small business has completed its financial statements and closing entries.
The accountant wants to make sure the books are correct before starting the new year.
Questions
➛ Why is a post-closing trial balance prepared?
➛ What type of accounts does it include?
➛ What error might it help detect?
➛ Can revenue accounts appear? Why or why not?
➛ What accounting cycle step comes next?
Quick Quiz
➛ What is the main purpose of a post-closing trial balance?
➛ When is it prepared?
➛ Name two accounts that appear in it.
➛ Name one account that does NOT appear.
➛ True or False | It prepares the company for the next accounting period.
Answers ➧ Here
Module 3 ➧ Here