Question

What is the purpose of the post-closing trial balance?

1) to prove the closing entries were recorded correctly in the journal
2) to prove the equality of the debit and credit balances in the general ledger accounts
3) to prove the balances in the general ledger accounts are correct
4) to prove no errors were made while recording entries in the journal

Answer 1

The post-closing trial balance ensures that debits and credits are equal after closing entries, indicating that the accounts are ready for the next period. Hence, the correct answer is option 2.

Step-by-step explanation:

The purpose of the post-closing trial balance is to prove the equality of the debit and credit balances in the general ledger accounts after the closing entries have been made. This step is important as it confirms that all temporary accounts such as revenues, expenses, and dividends have been closed and their balances zeroed out, leaving only the permanent accounts to be carried over into the next accounting period. The post-closing trial balance is the final step in the accounting cycle before the new accounting period begins.