Chapter 5

BALANCING OFF ACCOUNTS

ACCOUNT FOR DEBTORS

To find out how much our customers owe us for goods we have sold them.

THE ACCOUNTS FOR DEBTORS

Assets K TANDY 20x6 144 Aug 22 Bank 300 Aug 28 Bank 444 $

20X6 Aug 1 Sales Aug 19 Sales $

144 300 444

Both

side sum to RM444. Means during the month we sold a total of RM444 of goods to Tandy. Tandy also have been paid a total of RM444 means she owe us nothing.

THE ACCOUNTS FOR DEBTORS

Assets C LEE 20x6 177 Aug 22 Bank 203 Aug 30 Bank 480 $

20X6 Aug 11 Sales Aug 19 Sales $

144 236 480

Lee

also owed us nothing at the end of August 20x6. He has paid for all the sales we made to him.

WHERE DEBTORS STILL OWE FOR GOODS

Assets D KNIGHT 20x6 158 Aug 28 Bank 206 118

20X6 Aug 1 Sales Aug 15 Sales Aug 30 Sales

158

In

double entry, we want to balance off the account for August. Showing that Knight owes us RM324 when the business open on 1 September.

BALANCING OF ACCOUNT
Done in five stages: Add up both sides to find out their totals. Deduct the smaller total from the larger total to find the balance. Now enter the balance on the side with smallest total. Means the total will be equal. Enter total level with each other. Enter the balance on the line below the totals.

BALANCING OF ACCOUNT
D Knight 20x6 Aug 1 Sales Aug 15 Sales Aug 30 Sales Sept 1 Bal b/d 158 206 118 482 324 20x6 Aug 28 Bank 158

Aug 31 Bal c/d

324
482

End Chapter 5