Examples of Post-Closing Entries Based on the Post-Adjusted Trial Balance
Based on the above-explanation and the final amounts of the example of post-adjusted trial balance we came up with earlier, the following closing entries will be posted in order to zero-out the balances of these nominal accounts in the general ledger:
You may want to click-on the image on your right to view a screen-shot image on how the general ledger page for the profit and loss account will look like.
Post Closing Entries:
a. Dr. Revenue from Sales _________$ 37,500
Cr. Profit and Loss Summary ________$ 37,500
b. Dr. Profit and Loss Summary __________$ 18,150
Cr. Cost of Goods Sold __________$18,150
c. Dr. Profit and Loss Summary________ $23,603
Cr. Salaries Expenses________$ 14, 400
Cr. Store Supplies Expenses________ $ 375
Cr. Repairs and Maintenance________$ 280
Cr. Depreciation Expenses________$ 4,400
Cr. Insurance Expense________$ 2,200
Cr. Utilities Expenses________$ 750
Cr. Tel. & Com. Expenses________$ 260
Cr. Delivery / Shipping Expenses________$ 938
d. Dr. Capital Account - Net Loss________$ 4,253
Cr. Profit and Loss ________$ 4,253
Note that after the closing entries were posted, the post-closing trial balance revealed the final general ledger accounts and their balances, which will be carried forward to the succeeding year's books of accounts, . Once this has been achieved, the final stage of the accounting cycle which is the preparation of the year end financial statements will be the next task at hand.
As a summary, the explanations and examples show the transition of post-adjusted trial balance from its unadjusted state and subsequently to its final transformation as a post-closing trial balance.These are the methodical and organized accounting procedures used to ensure that the financial statement reports reflect the most accurate and balanced summary upon closing of the general ledger books at the end of the accounting cycle.