Book-keeping Balancing off accounts

Chapter 6
6-1

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007

Learning Objective 1, 2 and 3
Understand what is meant by ‘balancing off’ accounts Balance off accounts at the end of a period and bring down the opening Distinguish between a debit and a credit balance
6-2

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Learning balancing off accounts: a debtor account

Debit 2005 Aug 1 Sales
Debit total: 482 Credit total: 158 Stage 1: Add up both sides to find out their totals. Do not write anything in the account at this stage 6-3

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Learning balancing off accounts: a debtor account
Debit 2005 Aug 1 Sales Aug 15 Sales Aug 30 Sales D. Knight account £ 2005 158 Aug 28 Bank 206 118 Credit £ 158

Debit total: 482

Credit total: 158

482 - 158 = 324 Stage 2: Deduct the smaller total from the larger total to find the balance

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

6-4

Learning balancing off accounts: a debtor account with a credit balance

Debit 2005 Aug 1 Sales Aug 15 Sales Aug 30 Sales Sept 1 Balance b/d

D. Knight account £ 2005 158 Aug 28 Bank 206 Aug 31 Balance c/d 118 482 324

Credit £ 158 324 482

Stage 5: enter balance to start off entries for following month
b/d = brought down

Stage 4: enter totals level with each other

Stage 3: enter balance here so that totals will be equal

c/d = carried down

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

6-5

Learning balancing off accounts: a creditor account
Debit 2005 Aug 21 Bank E. Williams account £ 2005 100 Aug 2 Purchases Aug 18 Purchases Credit £ 248 116

Debit total: 100

Credit total: 364

Stage 1: Add up both sides to find out their totals. Do not write anything in the account at this stage

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

6-6

Learning balancing off accounts: a creditor account
Debit 2005 Aug 21 Bank E. Williams account £ 2005 100 Aug 2 Purchases Aug 18 Purchases Credit £ 248 116

Debit total: 100

Credit total: 364

364 - 100 = 264

Stage 2: Deduct the smaller total from the larger total to find the balance

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

6-7

Learning balancing off accounts: a creditor account with a debit balance

Debit 2005 Aug 21 Bank Aug 31 Balance c/d

E. Williams account £ 2005 100 Aug 2 Purchases 264 Aug 18 Purchases 364 Sept 1 Balance b/d

Credit £ 248 116 364 264

Stage 3: enter balance here so that totals will be equal
c/d = carried down

Stage 4: enter totals level with each other

Stage 5: enter balance to start off entries for following month

b/d = brought down

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

6-8

Learning Objective 4

Prepare accounts in a three column format, as used in computerised accounts.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

6-9

Learning: Balancing off accounts on computer

Three column lay-out debtor account:

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

20x6

Column 1: for debit entry

Column 2: for credit entry

Column 3: for balance

6 - 10

Learning: Balancing off accounts on computer

Three column lay-out creditor account:

Column 1: for debit entry

Column 2: for credit entry

Column 3: for balance

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

20x6

6 - 11

End of Chapter 6: Balancing off accounts

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007

6 - 12

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