Asked by madison marciano on Jun 26, 2024
Verified
A company's post-closing trial balance has total debits of $40,560 and total credits of $40,650.Accordingly,the company should review for errors in the closing process.
Post-closing Trial Balance
A financial statement prepared after closing entries are made, listing only the accounts with balances to be carried over to the next accounting period.
Total Debits
The sum of all debit entries recorded in an accounting system, reflecting increases in assets or expenses and decreases in liabilities or equity.
Total Credits
The summation of all credit amounts in accounting, representing the total value received or receivable in transactions.
- Comprehend the critical role of the post-closing trial balance in ensuring the closure of temporary accounts is accurate and in validating the correctness of closing entries.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
True
Explanation :
The difference of $90 between the total debits and credits indicates that there may be errors in the closing process, and the company should review to ensure the balances are correct.
Learning Objectives
- Comprehend the critical role of the post-closing trial balance in ensuring the closure of temporary accounts is accurate and in validating the correctness of closing entries.