Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Post-Closing Trial Balance

Financial Accounting

3. Accrual Accounting Concepts

Post-Closing Trial Balance

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Multiple Choice

Which of the following best describes the purpose of a post-closing trial balance?

To prepare financial statements for the next accounting period.

To verify that total debits equal total credits after closing entries have been made.

To list all revenue and expense accounts with their balances after closing.

To record adjusting entries at the end of the period.

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Verified step by step guidance

Understand the concept of a post-closing trial balance: It is prepared after closing entries are made to ensure that the ledger is balanced and ready for the next accounting period. It includes only permanent accounts (assets, liabilities, and equity) since temporary accounts (revenues, expenses, and dividends) are closed.

Review the purpose of closing entries: Closing entries transfer the balances of temporary accounts to permanent accounts, ensuring that the temporary accounts start with a zero balance in the next accounting period.

Recognize the primary purpose of a post-closing trial balance: It is used to verify that total debits equal total credits after closing entries have been made, ensuring the accuracy of the ledger.

Eliminate incorrect options: The post-closing trial balance does not prepare financial statements, list revenue and expense accounts (since they are closed), or record adjusting entries. These are separate processes in the accounting cycle.

Select the correct answer: Based on the explanation, the correct purpose of a post-closing trial balance is to verify that total debits equal total credits after closing entries have been made.