Question

The purpose of a post-closing trial balance is to

a)verify that closing entries were prepared and posted correctly.
b)adjust the financial statements for the following year.
c)correct errors in the current year financial statements.
d)verify that all asset accounts were properly closed.

Answer 1

A post-closing trial balance is prepared to confirm that all closing entries have been properly made and to ensure that the ledger is in balance for the start of the new accounting period. It includes only balance sheet accounts and helps in transitioning to the next period's financial activity. Option a is correct.

Step-by-step explanation:

The purpose of a post-closing trial balance is to verify that closing entries were prepared and posted correctly. This step is taken after the closing entries are made at the end of an accounting period, to ensure that debits equal credits, thereby confirming that the accounts are in balance for the start of the new accounting period.

The post-closing trial balance includes only balance sheet accounts since all revenue and expense accounts have been closed and should have zero balances.

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