The post-closing attempt balance report lists down all the individual account after accounting for the closing entries. At this point in the bookkeeping cycle, all the temporary accounts have been closed and zeroed out to long-term accounts. Therefore, a post-closing attempt balance will include a list of all long-term accounts that still have balances. This will be the same to the items showing up on a balance sheet.

You are watching: A post-closing trial balance will show:

The audit Cycle Example

Throughout this collection on the bookkeeping cycle, we will look at an instance business, Bob’s Donut Shoppe, Inc., to aid understand the concepts of each part of the accounting cycle. Below is the finish list of accounting cycle tutorials:

Post-Closing attempt Balance (you are here)

We likewise have an accompanying spreadsheet which shows you an instance of every step.

Click here to download the accountancy Cycle template

Post-Closing trial Balance Purpose

The bookkeeping cycle increase till now currently has watched the ready of an unadjusted trial balance and an readjusted trial balance. Therefore, one could ask because that the need of prepare yet another trial balance- the post-closing trial balance. There deserve to be various reasons for preparing a post-closing psychological balance. Some of them are noted below:

To verify that all the short-term accounts have been closed off accuratelyTo check if the debit and credit pillar totals match. If they perform not, this might mean that there has been an error in journalizing the closeup of the door entries or while posting them to the ledger.The post-closing trial balance will reflect the last balances because that the company accounts at the finish of the financial report period. These finishing balances will come to be opening balances for the next audit period.

Format of a Post-Closing attempt Balance

A post-closing psychological balance will be formatted the very same as the various other two types of psychological balances that have currently been discussed. That will have three columns (account names, debit and also a credit column). Favor an unadjusted or an adjusted trial balance, the will have actually accounts provided in order of either your account number or in the bespeak they show up on the balance sheet. The stimulate that will certainly follow will certainly be heritage first, climate liabilities and finally ending off v equity.

Totals the both the debit and credit columns will certainly be calculated at the bottom end of the post-closing trial balance. This columns need to balance, otherwise, it would most likely mean that there has been an error in posting the the adjusting entries.

The adjusted trial balance should have a suitable header that must be in a similar format together below:

Company APost-Closing psychological BalanceAs of January 31, 2020

Preparation

Preparing the post-closing attempt balance will certainly follow the same procedure that took to create the unadjusted or changed trial balance. Each individual account balance is moved from their ledger account to the post-closing psychological balance. Every account v a debit balance will be listed on the debit side of the attempt balance and also all accounts with a credit transaction balance will be noted on the credit transaction side the the attempt balance.

The difference between the unadjusted trial balance and the changed trial balance is the adjusting entries that are required to align the agency accounts because that the equivalent principle. Whereas, the difference between an adjusted trial balance and a post-closing trial balance is the closing entries the are compelled to close off the short-lived accounts and transfer their balances come the permanent accounts so the they can be noted on the balance sheet.

Common Errors

Some common errors occur while developing the post-closing psychological balance. Some of them are:

The debit accounts room incorrectly noted as credit accounts or evil versa.Some account are mistakenly missed the end on while posting to the post-closing attempt balance.Some account are repeated multiple times.There has been an error in journalizing the close up door entries in the preceding step of the bookkeeping cycle.

The above-mentioned factors could be all those components that an outcome in the debit columns totals carry out not enhance with the credit shaft totals.

Example that a closeup of the door Trial Balance

Company A prepares the complying with post-closing attempt balance report after ~ posting the close up door entries:


*

As we deserve to see from the above example, the debit and also the credit transaction columns balances space matching. This way that over there is no error if posting the closing entries to your individual accounts and then listing those account balances top top the post-closing attempt balance.

Another thing to observe is the as expected we perform not see any kind of temporary account balances in the post-closing attempt balance. Every the revenue and also expense accounts have successfully been closed out into an income summary account and also then the income summary account balance has also been moved to retained revenue account. The retained income account is a brand-new permanent account provided on this trial balance which you won’t discover in the psychological balances (adjusted and unadjusted) that came before the post-closing trial balance.

Bob’s Donut Shoppe, in ~ Example

Continuing with Bob and also his company, Bob’s Donut Shoppe, Inc., we need to article the closeup of the door entries to their appropriate individual accounts and then perform them top top the post-closing attempt balance. Bob’s closeup of the door trial balance should look something prefer this:


*

We can plainly observe the difference in between the changed trial balance and also the post-closing trial balance. Every the short-term accounts choose revenue and expense accounts have actually been close up door out right into the retained income account via the income an introduction account (as previously explained).

Another peculiar thing about Bob’s post-closing trial balance is that generally a retained earnings account will have a credit transaction balance, yet in Bob’s books it has actually a debit balance. The factor is the Bob did not make a profit in the first month the his operations. In fact, that made a net loss totalling $6,050.

Next Step

The following step the the bookkeeping cycle is to prepare the reversing entries because that the start of the next bookkeeping cycle.


Link to or reference This Page

If you discovered this content useful in her research, please carry out us a great favor and use the tool listed below to make certain you appropriately reference us wherever you use it. Us really evaluate your support!


"Post-Closing trial Balance". ubraintv-jp.com. Accessed top top November 11, 2021. Https://ubraintv-jp.com/post-closing-trial-balance/.

See more: Out Of Office Message For Death In The Family, Bereavement Etiquette For The Workplace

"Post-Closing psychological Balance". ubraintv-jp.com, https://ubraintv-jp.com/post-closing-trial-balance/. Accessed 11 November, 2021

Post-Closing attempt Balance. ubraintv-jp.com. Retrieved from https://ubraintv-jp.com/post-closing-trial-balance/.