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

• A. To prepare financial statements for the next accounting period
• B. To list all revenue and expense accounts with their balances
• C. To record adjusting entries for accrued expenses
• D. To verify that total debits equal total credits after closing entries have been made

Answer: (D)

Verified step by step guidance

1. Understand the concept of a post-closing trial balance: It is a report prepared after closing entries are made to ensure that the ledger is balanced and ready for the next accounting period.
2. Recognize that the primary purpose of the post-closing trial balance is to verify that total debits equal total credits after closing entries have been made. This ensures the accuracy of the accounting records.
3. Note that the post-closing trial balance only includes permanent accounts (assets, liabilities, and equity) because temporary accounts (revenues, expenses, and dividends) are closed to retained earnings during the closing process.
4. Eliminate incorrect options: Preparing financial statements for the next accounting period is not the purpose of the post-closing trial balance; listing revenue and expense accounts is irrelevant since they are closed; recording adjusting entries for accrued expenses happens before closing entries.
5. Conclude that the correct answer is: 'To verify that total debits equal total credits after closing entries have been made,' as this aligns with the purpose of the post-closing trial balance.