What is the purpose of a post-closing trial balance?

• A. To verify that permanent accounts balance after closing and that all temporary accounts have been closed.
• B. To record new transactions for the next period.
• C. To replace the ending balance sheet.
• D. To prepare the cash flow statement.

Answer: (A)

The post-closing trial balance is prepared after closing entries to verify that only permanent accounts carry balances into the next period and that all temporary accounts have been closed to zero. After closing, revenue, expense, and dividends (or drawings) balances are transferred to retained earnings, leaving those temporary accounts with zero balances. What remains with real balances are the permanent accounts—assets, liabilities, and equity—which will carry forward. The post-closing trial balance ensures that total debits still equal total credits in these remaining accounts, confirming the ledger is in balance and is ready for the next set of transactions. It is not used to record new transactions, replace the ending balance sheet, or directly prepare the cash flow statement.