What is the write-up Closing psychological Balance?

The write-up closing attempt balance is a list of every accounts and also their balances after the closing entries have actually been journalized and posted to the ledger. In other words, the post closing attempt balance is a list of accounts or irreversible accounts the still have balances after the closeup of the door entries have been made.

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This accounts list is similar to the account presented ~ above the balance sheet. This makes sense because all of the income statement accounts have been closed and also no longer have actually a present balance. The function of prepare the post closing trial balance is verify the all short-term accounts have been close up door properly and the full debits and also credits in the audit system equal after the close up door entries have been made.

Format

An short article closing attempt balance is formatted the very same as the other trial balances in the accounting cycle displaying in 3 columns: a column for account names, debits, and also credits.

Since only balance sheet accounts are listed on this trial balance, they room presented in balance paper order starting with assets, liabilities, and also ending through equity.


As with the unadjusted and adjusted trial balances, both the debit and also credit columns space calculated at the bottom of a attempt balance. If this columns aren’t equal, the psychological balance was prepared mistakenly or the closing entries weren’t transferred to the ledger account accurately.

As with all financial reports, psychological balances are constantly prepared through a heading. Typically, the heading is composed of 3 lines containing the company name, name of the trial balance, and date that the report period.

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Preparation

Posting account to the article closing trial balance follows the specific same actions as prepare the various other trial balances. Each account balance is moved from the ledger accounts to the trial balance. All accounts through debit balances are detailed on the left column and also all accounts v credit balances are detailed on the best column.

The process is the exact same as the previous trial balances. Now the ledger accounts just have write-up closing entry totals.

Example

After Paul’s etc Shop posted its closing journal entries in the previous example, it can prepare this write-up closing psychological balance.

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Notice that this trial balance looks almost exactly favor the Paul’s balance sheet except in psychological balance format. This is because only balance sheet accounts are have actually balances ~ closing entries have been made.

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Now that the write-up closing trial balance is prepared and also checked for errors, Paul can start recording any necessary reversing entries before the start of the next accountancy period.