What does a post-closing trial balance show?

The post-closing trial balance shows the total balance of permanent accounts at the end of the reporting period. Permanent accounts are the account types found in a balance sheet, such as inventories, unearned salaries, notes payable and retained earnings.

In addition, the post-closing trial balance has a characteristic that the total debits and total credits, when both subtracted, will be equal to zero. Temporary accounts are not included since they have been transferred to the retained earnings account during the posting of closing entries to the ledgers. The purpose of preparing the post-closing trial balance is to verify that all temporary accounts have been closed and that total debits equal total credits after closing entries have been recorded.

A post-closing trial balance is prepared exactly the same as the unadjusted and adjusted trial balance. It is made after posting the ledgers and it has three columns: account names, debit and credit. It has a heading consisting of the name of the business, name of the trial balance and the end date of reporting period. The difference is that a post-closing trial balance follows an order of accounts similar to a balance sheet, with assets first, followed by liabilities and equity.