What do you understand by balancing of account?
What do you understand by balancing of account?
Balancing of account is a way to balance the various ledger accounts. Accounts in the ledger are periodically balanced, generally at the end of the accounting period, with the object of ascertaining the net position of each amount.
Balancing of an account means that the two sides are totalled and the difference between them is shown on the side, which is shorter in order to make their totals equal. The words 'balance carried down (c/d)' are written against the amount of the difference between the two sides.
The amount of balance is brought down (b/d) in the next accounting period indicating that it is a continuing account until finally settled or closed. In case the debit side exceeds the credit side, the difference is written on the credit side, if the credit side exceeds the debit side, the difference between the two appears on the debit side and is called debit and credit balance respectively. The accounts of expenses/losses and gains/revenues are not balanced but are closed by transferring to trading and profit and loss account.
Balancing of account is a way to balance the various ledger accounts. Accounts in the ledger are periodically balanced, generally at the end of the accounting period, with the object of ascertaining the net position of each amount.
Balancing of an account means that the two sides are totalled and the difference between them is shown on the side, which is shorter in order to make their totals equal. The words 'balance carried down (c/d)' are written against the amount of the difference between the two sides.
The amount of balance is brought down (b/d) in the next accounting period indicating that it is a continuing account until finally settled or closed. In case the debit side exceeds the credit side, the difference is written on the credit side, if the credit side exceeds the debit side, the difference between the two appears on the debit side and is called debit and credit balance respectively. The accounts of expenses/losses and gains/revenues are not balanced but are closed by transferring to trading and profit and loss account.
