Balancing a Ledger Account

Balancing means finding the net difference between the total of the debit side and the total of the credit side of an account, so as to show its net position on a given date.

Steps to balance an account:

1. Total both the debit column and the credit column separately (in pencil/working, not yet written in).
2. Find the difference between the two totals.
3. If the debit total is larger, write the difference on the credit side as "By Balance c/d" (carried down) — this makes both sides equal. This account is said to have a debit balance.
4. If the credit total is larger, write the difference on the debit side as "To Balance c/d" — this account has a credit balance.
5. Now both sides show the identical total — rule a line under both columns.
6. Bring the balance down to the opposite side, below the totals, on the next date, as "To Balance b/d" (if it was a Cr. balance carried down, it comes down as a Dr. balance b/d) or "By Balance b/d" (the reverse) — this becomes the account's opening balance for the next period. …