What is the purpose of the post-closing trial balance? Explain where the information for the post-closing trial balance comes from.

The purpose of the post-closing trial balance is to verify that the closing entries have been made correctly and that the general ledger accounts are in balance at the beginning of a new accounting period.

To create a post-closing trial balance, you need to gather information from various sources within the accounting system. Here's how to obtain the information for a post-closing trial balance:

1. Opening Balances: Start by collecting the opening balances of each account from the previous trial balance or financial statements. These balances provide a starting point for the new accounting period.

2. Closing Entries: Next, review the closing entries from the previous period. Closing entries are made to transfer the temporary account balances (such as revenue, expenses, and dividends) to the retained earnings account. The closing entries effectively reset these temporary accounts to zero for the new period.

3. General Ledger: Once the closing entries have been posted, go through each account in the general ledger. Verify that the balances in the revenue, expense, and dividend accounts are zero, as these should have been closed. Also, ensure that the retained earnings account contains the correct ending balance after the closing entries.

4. Adjusting Entries: Check if any adjusting entries were recorded after the closing entries. Adjusting entries are made to correct errors, allocate expenses or revenues, or recognize accrued revenues or expenses that were not previously recorded. Include these adjustments in the post-closing trial balance to ensure all account balances are accurate.

5. Subsidiary Ledgers: If your accounting system includes subsidiary ledgers, reconcile the subsidiary ledger balances with the corresponding general ledger accounts.

Once you have gathered this information, you can prepare the post-closing trial balance. This report lists all the accounts in the general ledger, along with their respective balances. The debit and credit balances should equal to ensure that the books are in balance, indicating that the accounting records are accurate and ready for the new period.