Post-Closing Trial Balance definitions Flashcards
Post-Closing Trial Balance definitions
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Post-Closing Trial Balance A listing of only permanent accounts with balances after closing entries, serving as a starting point for the new fiscal year. Permanent Accounts Accounts that carry balances into the next period, typically including assets, liabilities, and equity. Balance Sheet A financial statement or listing that shows assets, liabilities, and equity at a specific point in time. Adjusted Trial Balance A list of all accounts and their balances after adjustments, used as a basis for closing entries. Closing Entries Journal entries made to transfer balances from temporary accounts to retained earnings at period end. Revenue Accounts Temporary accounts that track income earned during a period and are reset to zero after closing. Expense Accounts Temporary accounts that record costs incurred during a period and are cleared during closing. Dividends Distributions of earnings to shareholders, recorded in a temporary account and closed to retained earnings. Asset Accounts Permanent accounts representing resources owned by a company, remaining open after closing. Liability Accounts Permanent accounts reflecting obligations owed to others, not affected by closing entries. Equity Accounts Permanent accounts showing owners' claims on assets, including retained earnings and capital. Retained Earnings Equity account reflecting accumulated net income minus dividends, updated by closing entries. Income Summary A temporary account used to aggregate revenues and expenses before updating retained earnings. Net Income The result of revenues minus expenses for a period, affecting retained earnings through closing. Beginning Balance Retained Earnings The amount of retained earnings at the start of a period, used in calculating the ending balance.
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