Balancing Ledger Accounts

What happens when we balance an account?

• We determine the totals of each side of the account

• We add up the total debits in an account

• We add up the total credits in an account

• We find the difference between the debits and credits in an account

What is the first step to balancing an account.

• Enter the difference on both sides of the T-Account

• Put the difference as balance c/d

• Add up each side of the account

• Put the totals on both sides

The balance in a debtor's account usually tells us...

• How much was earned from the customer

• How much is owed to us by that customer

• How much cash was paid to us by the customer

• How much goods were returned to us by the customer

The balance in suppliers’ accounts usually shows us....

• ..how much we still owe them.

• ..how much they still owe us.

• ..how much goods we bought.

• ..how much was returned.

When does a company usually balance their accounts?

• At the end of a transaction

• At the beginning of the month

• At the end of the period

• At the beginning of the accounting year