Post-closing trial balance is prepared after making the closing entries in the accounts. Post-closing trial balance includes only the permanent accounts and it does not include any temporary accounts. This is because all the temporary accounts are closed by closing entries and their balances are transferred to permanent accounts.
The temporary accounts are closed in the following four steps:
- All the revenue and income accounts are closed to income summary account
- All the expenses are closed to the income summary account
- The balance of the income summary account is closed to the retained earnings account
- The dividend account is closed to the retained earnings account
An example of a post-closing trial balance is given below:
| Account titles | Debit ($) | Credit ($) |
| Cash | 74,500 | |
| Accounts Receivable | 75,900 | |
| Prepaid expenses | 4,500 | |
| Inventory | 52,000 | |
| Short term investment | 126,100 | |
| Equipment | 150,000 | |
| Accumulated depreciation – Equipment | 90,000 | |
| Building | 350,000 | |
| Accumulated depreciation – Building | 105,000 | |
| Accounts payable | 60,500 | |
| Salary Payable | 2,000 | |
| Bonds payable | 160,000 | |
| Interest payable | 40,000 | |
| Rent payable | 4,000 | |
| Utilities expense payable | 2,000 | |
| Common stock | 50,000 | |
| Additional paid in capital – Common stock | 225,000 | |
| Retained earnings | 99,500 | |
| Treasury Stocks | 5,000 | |
| Total | 838,000 | 838,000 |
