Post-closing Trial BalanceDefined with Examples & Samples

Lisa Borga
Last Updated: November 17, 2021
Date Published: November 17, 2021

What Is a Post Closing Trial Balance?

A post closing trial balance is the third trial balance in the accounting cycle and lists all of a company’s accounts that have remaining balances after a company’s closing entries have been made.

This will be the final trial balance which an accountant will make, and this trial balance is particularly crucial because it will measure the balance of permanent accounts, which at this stage in the accounting cycle will be the only accounts that still retain a balance.

Because all of the accounts on the income statement have already been closed by the time a post closing trial balance is being compiled, the only accounts that will appear on this trial balance are the ones that appear on a company’s balance sheet.

This balance sheet will help ensure that a company’s beginning balances are correct for the next accounting cycle.

post closing trial balance


Why Is a Post Closing Trial Balance Important?

At the end of every accounting cycle, temporary accounts will be set to a zero balance through closing entries, and after this is done, a post closing trial balance will be created.

This measures the credits and debits of your remaining accounts that have a balance and checks to see if they still balance, which is one of the core principles of double-entry accounting.

This also helps to ensure that all temporary accounts have been properly closed, which is essential to ensure that accounts will remain accurate during the next cycle.

How Is a Post Closing Trial Balance Formatted?

A post closing trial balance uses the same formatting as other trial balances.

This will use three columns, including one for the names of accounts, one for debits, and one for credits.

Due to the fact that only balance sheet accounts should remain to be placed on this trial balance, they should be placed in the same order as they would be on the balance sheet.

This means assets first, then liabilities, and lastly, equity.

At the bottom of the trial balance, the debit column and the credit column will both be totaled, and if closing entries were performed correctly and the trial balance was properly prepared, the total of the two columns should be equal.

Like all financial reports, a post closing trial balance should be prepared with a heading.

Generally, this should include the name of the company, the type of trial balance, and the date of the report.

post closing trial balance

How to Prepare a Post Closing Trial Balance

Compiling a post closing trial balance is essentially the same as for unadjusted and adjusted trial balances.

First, identify the accounts that possess balances, and if closing entries were performed correctly, these should simply be those on your company’s balance sheet.

Now you will use a three-column trial balance sheet which should closely resemble this one.

Sample Company

Post Closing Trial Balance

Month Day, Year

Accounts Receivable$0
Accounts Payable$0
Stockholders Equity$0

Next, place the account names in the leftmost column, and this should be done in balance sheet order with assets first, then liabilities, and equity last.

In the middle column, you will place debit balances for every account, and in the rightmost column, you will place all credit account balances.

On the bottom-most row, these balances will be totaled, and if everything has been performed correctly, then the value of credits and debits should be equal.

Post Closing Trial Balance

You probably noticed that a post closing trial balance looks a lot like a balance sheet in the format of a trial balance.

It looks this way because once the closing entries have been made, the balance sheet accounts are the only accounts that have balances.

After the post closing trial balance is finished and checked for any mistakes, any reversing entries that are needed can be made before the next accounting period begins.

Examples of Post Closing Trial Balances

After Joe’s Auto Supply finishes posting its closing journal entries, it’s time to prepare a post closing trial balance.

Joe’s Auto Supply

Post Closing Trial Balance

June 30, 2020

Accounts Receivable$40,000
Accounts Payable$30,000
Stockholders Equity$70,000

Here is another example of a post closing trial balance.

This one is for Sam’s Lawn Service.

This example includes accumulated depreciation.

Sam’s Lawn Company

Post-closing Trial Balance

December 31, 2020

Accounts Receivable$30,000
Fixed Assets$130,000
Accumulated Depreciation($30,000)
Accounts Payable$30,000
Retained Earnings$50,000
Company Stock$120,000

Here is one more example of a post closing trial balance.

This is for Brenda’s Pet Supplies and includes an inventory account and prepaid rent.

Brenda’s Pet Supplies

Post-closing Trial Balance

April 30, 2020

Accounts Receivable$50,000
Prepaid Rent$3,000
Fixed Assets$50,000
Accumulated Depreciation($20,000)
Accounts Payable$58,000
Bank Loan Payable$50,000
Owner’s Equity$250,000

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  1. UMass Lowell "Post closing trial balance" Page 1 . November 17, 2021

  2. Provo "Posting Closing Entries for a Service Business" Page 14-16. November 17, 2021

  3. Linn-Benton Community College "THE ACCOUNTING CYCLE COMPLETED " Page 1 - 36. November 17, 2021