What is a post-closing trial balance?

A post-closing trial balance is a listing of all balance sheet accounts containing non-zero 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 already been closed and their balances moved into the retained earnings account in the balance sheet as part of the closing process.

If any revenue, expense, or summary account balances appear in the trial balance subsequent to the closing process, it is because they are associated with the next accounting period.

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 set a flag to prevent additional transactions from being recorded in the old accounting period, and 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. For this reason, most procedures for closing the books do not include a step for printing and reviewing the post-closing trial balance.

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 Number	Account 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

 
Related Topics

General journal
The trial balance
Trial balance errors
What is an adjusted trial balance?
What is an unadjusted trial balance?