I am sure a lot of students have this question on their minds. So maybe I should ask on their behalf.
Balancing an account is not very difficult, but it can be challenging for students who are taking accounting or business studies as a subject for the first time. Knowing how to balance an account is not only valuable to students alone, but to anyone running a business.
So the question is open to anyone who can show us a simple way to balance an account and how to check that the account is actually balanced.
When the debit side is equal with the credit side, the account is balanced
An account is balanced when the total assets equals the total equity and liabilities of a company’s statement of financial position
Thanks for your reply Eseose. To a noob like me, those accounting terms are little strange, and I think many students in the secondary school would find them difficult too. A student in JSS 2 for instance who is studying double column cash book in Business Studies may not know what total assets, total equity and liabilities are.
So could you please water it down a little to our level? After balancing the account, is there any way to verify that what one did is correct?
Statement of financial position is also known as balance sheet… As the name implies, once your debit side equals your credit side, it therefore means your account is balanced
I think it is clearer now. If I understand you correctly, an account is regarded as balanced if the final amount on the credit side is equal to the amount on the debit side. Nice!
The account balance is always the net amount after factoring in all debits and credits. An account balance that falls below zero represents a net debt—for example, when there is an overdraft on a checkingaccount.