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

• A. To list all revenue and expense accounts for the period.
• B. To verify cash balance at year-end.
• C. To determine current assets and liabilities only.
• D. To verify permanent accounts balance after closing entries and ensure the books are ready for the next period.

Answer: (D)

After closing entries are posted, the post-closing trial balance serves to confirm that only permanent accounts have balances and that the temporary, like revenue and expense accounts (and any dividends), have been closed to zero. It lists the ending balances of assets, liabilities, and equity, ensuring the accounting equation still balances. This check also proves debits equal credits and shows the books are clean and ready for the next period’s transactions.