Post-closing trial balance: once the closing entries are prepared and posted to the general ledger, another trial balance would be prepared to verify that the total dollar amount of debits in the general ledger equals the total dollar amount of credits. Remember, if debits equal credits, the accounting equation will balance. A trial balance prepared after closing entries are posted is called a post-closing trial balance. The Guitar Lessons Corporation's December 31 post-closing trial balance is shown below.

Guitar Lessons Corporation
Post-closing Trial Balance
December 31

Acct. No.

Account

Debits

Credits

111 

Cash

$9,750

 

112 

Notes Receivable

3,000

 

113 

Accounts Receivable

1,200

 

114 

Interest Receivable

20

 

115

Supplies

200

 

119 

Prepaid Insurance

750

 

211 

Accounts Payable

 

$1,350

213

Unearned Fees Revenue

 

625

214 

Wages Payable

 

500

215 

Income Taxes Payable

 

425

311 

Common Stock

 

7,000

313 

Retained Earnings

 

5,020

315 

Dividends

0

 

411 

Fees Revenue

 

0

412 

Interest Revenue

 

0

511 

Supplies Expense

0

 

517 

Wages Expense

0

 

521 

Insurance Expense

0

 

523 

Income Taxes Expense

0

 

 

Totals

$14,920

$14,920

The above post-closing trial balance shows that all revenue, expense, and dividends accounts have $0 balances and the $5,020 retained earnings balance is the same as the balance reported earlier on the company's statement of retained earnings. Once the closing process is completed, the company's accounting records are ready to account for the company's January activity. Since all revenue, expense, and dividends accounts have $0 balances after December's closing, any dollar amounts appearing in these accounts in January will be the result of January's activity. In this way, the accounting process separates the accounting for December's activity from January's.

 

 

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