What is a post-closing trial balance?

Definition

A Post-Closing Trial Balance is the Trial Balance printed after closing entries have zeroed income and expense. It lists only asset, liability, and equity accounts, and it proves those remaining balances still debit-equal-credit.

In books language, this is the last listing of the period. Temporary P&L accounts are gone from the report, and the Balance Sheet accounts that carry forward are what remain.

Where it shows up

Balance Sheet: Related to the asset, liability, and equity accounts that remain.

P&L: Related to nothing extra; income and expense accounts are already zero.

Cash flow: Related to nothing extra.

See also: Closing Entries · Trial Balance · Year-End Close

You will not issue the Post-Closing Trial Balance as a page in the Financial Statement Package. It is an internal listing used to prove the books are ready to open the next period.

The listing still shows Balance Sheet accounts such as cash, accounts receivable, current assets, accounts payable, current liabilities, and equity. Revenue and expense lines should be missing, or they should show zero, because they have already been closed.

The Statement of Cash Flows is not a section of this listing. Cash is one remaining account, and it should agree with the bank, but the reprint itself does not report cash movement.

How it works

After the Adjusted Trial Balance is used to draft statements, closing entries move income and expense into retained earnings or owner's equity. Those P&L accounts return to zero so the next Income Statement can start clean.

You then print another Trial Balance, and that reprint is the Post-Closing Trial Balance. Only permanent accounts should appear with balances.

You add the debit column and the credit column. They should still match, because closing entries were themselves in balance, and retained earnings or owner's equity now holds the period's net.

If a revenue or expense account still shows a balance, a closing posting was missed. You go back, close that account, and reprint before you call the year done.

If the two columns do not match, a closing posting is missing a side or an amount was keyed wrong. Equality here is the last in-balance check before opening balances carry into the new year.

The Post-Closing Trial Balance also becomes the starting point for the next period. Each remaining account's ending balance is that account's opening balance on day one, before any new invoice or vendor bill is recorded.

Example

A florist prints leftover asset, liability, and equity balances after year-end close. Cash, accounts receivable, accounts payable, and retained earnings each show a figure, and no income or expense line carries a leftover amount.

The debit column equals the credit column. That equal listing is the florist's proof that last year's P&L is closed and that the Balance Sheet accounts are ready to open January.

Common mix-ups

A Post-Closing Trial Balance is not the first Trial Balance of the close. The first listing includes income and expense before adjustments, and the post-closing listing is printed after both adjustments and closing entries.

A Post-Closing Trial Balance is not an Adjusted Trial Balance. The adjusted listing still shows P&L accounts so you can draft statements, and the post-closing listing shows only what carries forward.

A Post-Closing Trial Balance is not the Balance Sheet. The Balance Sheet classifies assets, liabilities, and equity for readers, and the Post-Closing Trial Balance is a raw two-column listing used to prove those accounts still balance.

Related terms

• Closing Entries: The year-end entries that clear income and expense accounts into retained earnings.
• Trial Balance: A listing of every ledger account balance, used to check that debits equal credits.
• Year-End Close: The heavier close at fiscal year end, including closing entries and audit preparation.
• Retained Earnings: Cumulative profits kept in the business rather than paid out.
• Opening Balance: The balance loaded into an account when the books are first set up or moved to a new system.
• Balance Sheet: A statement showing what a business owns, what it owes, and what is left for owners at a single point in time.
• General Ledger: The master record of every account and every posted transaction.
• Adjusted Trial Balance: The trial balance after all period-end adjusting entries are posted.