The 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 is used to verify that the total of all debit balances equals the total of all credit balances, which should net to zero. This is one of the last steps in the period-end closing process.

The post-closing trial balance contains no revenue, expense, gain, loss, or summary account balances, since these temporary accounts have already been closed and their balances moved into the retained earnings account as part of the closing process.

Once you have ensured that the total of all debits and credits the report are the same number, 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.

If any revenue, expense, gain, loss, 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, andcredit 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 "Trial Balance" report header.

Accounting software requires that your journal entries balance before it allows them to be posted 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