Future Business Leaders of America (FBLA) Accounting Practice Test

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Prepare for the FBLA Accounting Test with practice quizzes and comprehensive questions. Each question is designed to help deepen your understanding and enhance your readiness for the exam. Are you ready to excel?

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When is a post-closing trial balance prepared?

After adjusting entries
After the annual audit
After closing entries are posted
Before preparing financial statements

The correct answer is: After closing entries are posted

A post-closing trial balance is prepared after closing entries are posted to ensure that the total debits equal the total credits in the ledger accounts. This trial balance serves as a check on the accuracy of the closing entries and confirms that all temporary accounts have been closed properly to the retained earnings account. It reflects only the balances of permanent accounts, as the temporary accounts like revenues and expenses have already been closed to prepare for the new accounting period. Preparing the post-closing trial balance is a critical step as it helps to verify the integrity of the accounting data after the closing process, ensuring that the books are in balance and ready for the new fiscal year. This step typically occurs after the adjustment entries and prior to the start of a new accounting period but specifically follows the posting of closing entries, making it the essential procedure to confirm that everything has been recorded accurately.