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A post-closing trial balance is prepared immediately following the posting of closing entries. The purpose is to ensure that the debits and credits in the general ledger are equal and that all temporary accounts have been closed. The post-closing trial balance for Big Dog Carworks Corp. appears below.
Only balance sheet accounts – the permanent accounts – have balances and are carried forward to the next accounting year. All income statement and dividend accounts – temporary accounts –begin the new fiscal year with a zero balance, so they can be used to accumulate amounts belonging to the new fiscal year.
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