Question

The postclosing trial balance is prepared to?

A) Summarize the balances of the temporary accounts
B) Determine all account balances after adjusting entries have been recorded
C) Confirm that the general ledger is in balance
D) List the balances that must be closed prior to year-end

Answer 1

The postclosing trial balance confirms that the general ledger is balanced after closing entries. It includes only balance sheet accounts with temporary accounts closed out. This step is the final accounting cycle action before a new period. Therefore, the correct option is C.

Step-by-step explanation:

The postclosing trial balance is prepared to confirm that the general ledger is in balance after all closing entries have been posted at the end of the accounting period. This step is crucial to ensure that all permanent account balances are carried forward into the next accounting period accurately.

It includes only the balance sheet accounts, which are the real and permanent accounts, as temporary accounts (revenue, expense, dividends, and income summary accounts) should have a zero balance after closing entries are made. The postclosing trial balance is the final step in the accounting cycle before starting a new period.