A post-closing trial balance lists every account that contains a balance after the close of the accounting period. The accounting period closes when the accountant records all financial entries in the general ledger and the financial statements are prepared. The balances contained in the post-closing trial balance represent the beginning balances for the following period. These accounts only include balance sheet accounts. Temporary accounts do not carry a balance at the end of the period and do not appear on the post-closing trial balance.
Revenue accounts represent temporary income statement accounts. These accounts accumulate the money earned during the period and start fresh each period. Revenues include professional service fees or merchandise sales. Since the revenues start fresh each period, the accountant finds the balance for each revenue account and posts it in the income statement. Revenue accounts do not appear on the post-closing trial balance.
Expense accounts also represent temporary income statement accounts. These accounts accumulate the expenses incurred during the period and start fresh each period. This allows the company to consider only the expenses used during the current period. As the accountant prepares the income statement, she uses the expense balances from the accounting records. Since the expenses start fresh each period, the accountant only needs to find the balance. Expense accounts do not appear on the post-closing trial balance.
The income summary account only appears during the closing process and never carries a balance. The accountant closes out both the revenue account balances and the expense account balances to income summary. He then closes income summary out to owner's capital. The purpose of the income summary account is to facilitate the closing process. The income summary account does not appear on the post-closing trial balance.
The owner's drawing account represents money taken from the business and used by the owner. This account only accumulates withdrawals during the period and starts each new period with a zero balance. At the end of the accounting period, the accountant closes this account to the owner's capital account. The balance of this account prior to closing appears on the statement of owner's equity. The owner's drawing account does not appear on the post-closing trial balance.
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