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Balancing of Accounts

Balancing is the process of equalizing the two sides of an account. Each account in the ledger receives both debit and credit entries (or simply debit or credit) at some time or the other. Sometimes the debit ad credit entries will equal each other. At other times one side will have greater amount than the other side and when that occurs we call the difference as the Balance. A debit balance indicates that the total of the debit side is more than the total of credit side whilst a credit balance shows that the total of the credit side is greater than the total of debit side. The debit and credit refer to the debit amount column and credit amount column respectively on an account. Obviously the amount will have to be added to the lighter side (i.e., short side) to make it equal to or balance with the heavier (or greater) side. The balance of an account may be either debit or credit except in the case of cash account where it will always be a debit balance. If the sum of debit equals the sum of credits, it is a closed account and the account is said to have no balance.

Balancing of Personal Accounts

A personal account may have a debit balance when the individual is regarded as the debtor or credit balance indicating that he is creditor. But if both the sides of a personal account are equal, the person concerned is neither debtor nor creditor and the account is said to have no balance. Observe the following personal accounts:

A’s Account
Date Particulars J.F. Amount Rs. Date Particulars J.F. Amounts Rs.
Jan. 5

Jan. 13

Cash Account

Balance c/d




Jan. 3

Purchase Account

Balance b/d



In this account, it would be noticed that the credit side is more than the debit side by Rs. 1,000. The account is balanced by inserting the difference, that is, Rs. 1,000 on the debit side as Balance c/d (in the particulars columns); c/d means carried down. The same balance is brought down on the opposite side as: Balance b/d. The personal account in the next month (or year as the case may be) will begin with this amount (i.e., the amount represented by Balance b/d). This personal account of ‘A’ represents the account of a creditor, since credit side is heavier than the debit side.

Balancing of Real Accounts

The real accounts represent the accounts of properties or assets owned by the business. All property account will have a debit balance except those of goods represented by sales account and purchased returns accounts; the latter accounts in fact are not balanced but are closed by transferring the total amount to another account called the Trading Account.

Cash Account

Balancing of Nominal Accounts

The nominal accounts represent the expenses incurred or incomes earned. These accounts are not balanced and like some of the real accounts, that is, purchases account and sales account, they are transferred, at the end of each trading period, to profit and loss account.
After inserting “Balance c/d” on the short side, the amount column of both the sides of an account are totaled by drawing one line above and two lines (or a thick line) below the totals. The totals of both sides are placed in the same line or at the same level even though the total spaces occupied by the entries on both the sides may be different. Then the balance is brought down to the opposite side [heavier side, below the closing line (i.e., double line or single thick line] by inserting ‘Balance b/d’.
It follows from above that balance c/d is always inserted above the single line of the total and balance b/d below the double line or a thick line of the total on the opposite side.
The letters c/d stand for ‘carried down’ i.e., set down below. The letters b/d stand for ‘brought down’ i.e., brought from above.
The bringing down (b/d) of the balance puts it where it ought to be.
The balancing of the figures is not posting. There is, therefore, no opposite entry in any other account and accordingly opposite entries, i.e., c/d and b/d must be made in the account itself which is being balanced.
A transfer to another account is different from balancing.

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