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

Select the statement below that best describes a post-closing trial balance.

It shows the balances of all accounts, including those that have been closed.

It is a list of all permanent account balances after closing entries have been made.

It is prepared before adjusting entries are recorded at the end of the period.

It includes all revenue and expense accounts to verify their balances before closing.

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Verified step by step guidance

Understand the concept of a post-closing trial balance: A post-closing trial balance is prepared after closing entries are made at the end of an accounting period. Its purpose is to ensure that the ledger is balanced and only permanent accounts (assets, liabilities, and equity) remain, as temporary accounts (revenues, expenses, and dividends) are closed.

Identify the key characteristics of a post-closing trial balance: It includes only permanent accounts and excludes temporary accounts because they have been closed to the retained earnings or capital account.

Analyze the options provided in the problem: Evaluate each statement to determine whether it aligns with the definition and purpose of a post-closing trial balance.

Eliminate incorrect options: For example, the statement 'It shows the balances of all accounts, including those that have been closed' is incorrect because closed accounts (temporary accounts) are not included in the post-closing trial balance.

Select the correct statement: The correct answer is 'It is a list of all permanent account balances after closing entries have been made,' as this accurately describes the purpose and content of a post-closing trial balance.