Balancing off accounts is a major part of the free Processing Bookkeeping Transaction course, Accounting Trainees must know how to balance off accounts.
You are part way through the FREE Processing Bookkeeping Transactions Course and you should have read the pages listed below before reading this page:
Welcome to Balancing Off Accounts, Accounting Equation, Capital and Revenue
We have come along way in this free bookkeeping course. In previous units we have looked at sales, purchases, cash book and petty cash books. In this chapter we are going to look at balancing off accounts.
Balancing accounts or “balancing off” as it is sometimes called is a fancy term that Accounting trainees and Bookkeepers use – it just means the difference between the two sides of the account i.e. debits less credits.
Traditionally balancing off accounts must be done at each month end, but nowadays with computerised accounts the accounts are continually balanced off and an up to date balance is shown immediately after each transaction – just like your personal bank statement.
However when it comes to Accounting and bookkeeping examinations students have to balance off accounts manually. There is a standard procedure in balancing accounts and you will be required to perform this in your examinations.
Once all accounts have been balanced we are then in a position to produce a trial balance , and from that we can then produce the final accounts known as the Profit and Loss account and a Balance Sheet.
Another important aspect of balancing accounts is that the Sales Ledger control account can tell us immediately how much we are owed by our customers i.e. receivables. And the Purchase ledger control account tells us how much in total we owe our suppliers (Payables).
You will see that although Accounting Trainees and bookkeepers rarely perform the act of balancing accounts as it is done by the computerised accounts package, the information derived from the process is important and is therefore very examinable – you have been warned!
Now try the quiz below.
Here is the link to Amazon for the course books:
QUIZ: Balancing Off Accounts, Accounting Equation, Capital and Revenue.
Leaderboard for Balancing Accounts ,accounting equation and capital and revenue1. -30 Points
2. -30 Points
3. -30 Points
4. mn-30 Points
5. MIH01-30 Points