In banking and accounting, the outstanding balance is the amount of money owed, (or maturity), which remains in the deposit account.
In bookkeeping, "balance" is the difference between the number of debit entries and the number of credit entries entered into the account during the financial period. When the total debit exceeds the total credit, the account shows the debit balance. The reverse is true when the total credit exceeds the total debit, the account shows the credit balance. If the amount of debit/credit is the same, the balance is deemed invalid. In the accounting period, the "balance" reflects the net value of assets and liabilities. To better understand the balance in the accounting equation.
Balancing books refers to the main balance equation of:
- Assets = liabilities plus owner's equity.
The first "balancing" of books, or balance sheet accounts in accounting is to check iterations to ensure that the above equations apply, and where assets and liabilities are unequal, to equate it with debiting or crediting owner's equity (balance sheet) ie if the asset exceeds the obligation, the equity increases, if the liability exceeds the asset, the equity decreases, both in the amount necessary to balance the equation).
In addition to the balance sheet, other major financial statements (Statement of P & amp; L or Profit and Loss) are also offset by the balance sheet, generally by using "plug" as the interest is taken into account.
Video Balance (accounting)
References
Source of the article : Wikipedia
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