BALANCING AN ACCOUNT

At the end of a period (say a day, month or a year), it may be necessary to know the balance in an
account. A balance of an account is the difference between the total of its debit and credit sides. If the
total of debit side is more than the total of credit side, the account is said to have a debit balance. It has
a credit balance when total of credit side is more than the total of debit side.

The process of balancing is as follows:

I. Total the two sides (i.e., Debit and Credit) of the account.
II. Calculate the difference in totals of the two sides. The difference is the balance.
III. Enter the difference in the side with shorter total. Now the total of two sides will match.

If credit side is shorter, then the amount is entered on the credit side by writing ‘By Balance c/d’ in the
particulars column. It is carried forward by writing on the credit side ‘By Balance b/d’, it being a credit
balance.

If debit side is shorter, then the amount is entered on the debit side by writing ‘To Balance c/d’ in the
particulars column. It is carried forward by writing on the credit side ‘By Balance b/d’, it being a credit
balance.