Which statement best describes a post-closing trial balance?

• A. Trial balance prepared after closing entries to verify permanent accounts balance.
• B. Trial balance prepared before closing entries to verify all accounts.
• C. A statement showing cash inflows and outflows.
• D. A summary of owner's equity changes.

Answer: (A)

A post-closing trial balance lists the balances of permanent accounts after closing entries have been posted. It’s prepared after closing entries to verify that these accounts—assets, liabilities, and owner’s equity—still balance and that the temporary accounts have been closed to zero. This checks that the accounting equation remains in balance at the start of the new period and that only permanent accounts carry forward.

Temporary accounts (like revenues and expenses) are closed into owner’s equity, so they don’t appear on the post-closing trial balance. Since the goal is to confirm the ending balances of permanent accounts and the overall balance, this type of trial balance is the best description.

The other options describe different things: a trial balance before closing entries would include all accounts (including temporary ones), a cash inflows/outflows statement is a cash flow report, and a summary of owner’s equity changes is a separate equity statement.