The Purpose of the Post-Closing Trial Balance Is to

question 27

Multiple Choice

The purpose of the post-closing trial balance is to

• A) prove the equality of the temporary account balances that are carried forward into the next accounting period.
• B) list all the balance sheet accounts in alphabetical order for easy reference.
• C) prove the equality of the permanent account balances that are carried forward into the next accounting period.
• D) prove that no mistakes were made.

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Definitions:

Common Stock

A type of equity ownership in a corporation, representing a claim on a portion of the profits and assets.

Subscriptions Receivable-Common Stock

An account representing amounts due from subscribers who have agreed to buy shares of common stock, not yet paid for.

Paid-In Capital in Excess

Funds received from investors above the par value of the shares issued, also known as additional paid-in capital.

Paid in Capital in Excess

The amount received from shareholders in excess of the par or stated value of the shares, also known as additional paid-in capital or share premium.