Balance starting and ending formula. Definition - what it is. What developed countries trade

Balance- This is an accounting term that denotes the difference between the receipt of finance and their expenditure over a certain period. Term balance can be applied not only in the field of corporate finance, but, for example, in relation to international trade.

Balance and credit

In accounting, the balance is understood as the difference between the cumulative amounts of all entries on the debit and credit of the company's budget. The balance is calculated monthly on the first day:

• If the debit amount is higher than the loan amount, the balance is considered debit and reflects the amount of cash available to the company.

• If credit prevails over debit, the balance credit- it characterizes the state of the sources of economic assets.

It is seldom possible that the budget debit and credit are equal - in this case, they speak of closed balance.

This classification of the balance sheet is not the only one. Distinguish also:

• Active and passive balance. The active balance is considered when the funds credited to the account exceed the amount debited from it. On the contrary, if incomes turn out to be less than spending, they speak of a passive balance. Although the difference can be positive or negative, the result is recorded with a plus sign in any case. This is due to the use of the principle double entry.

• Opening and closing balances. The accountant produces for a certain period. The balance of the budget at the beginning of the analyzed period, formed from previous operations, is called incoming balance. As a result of the analysis of the movement of funds for the period, the final balance.

In Italian balance Is the calculation or the remainder. This term speaks of the difference between total cash receipts and total cash expenditures in a given time period. If we talk about the positioning of this term in accounting, then this will be the name of the difference between the total amounts of credit and debit turnovers.

Varieties of balances

The balance can be opening or closing. In this case, the debit balance is positive, and the credit balance is negative.

To determine the closing balance, it is added to the credit or debit turnover. If we take into account international trade and payment settlements, then the balance will mean the difference in the total amounts between imports and exports, as well as between receipts of financial resources to a particular country and payments abroad.

Debit and credit balance

If the debit is greater than the credit, then we are talking about the debit balance. It is able to reflect the state of affairs of a particular type of economic means in a specific time period. The debit balance is shown in the balance sheet asset.

In the credit balance, the credit will be slightly larger than the debit. It is able to reflect the state of various sources of economic assets. In this case, the credit balance is shown not in the asset, but in the liability of the balance.

Provided that the account has no balance, the balance indicator will be equal to zero. This account will be closed. In accounting practice, there have been cases when accounts have a credit and debit balance at the same time.

If we take into account the practical part of the analysis of accounting, then not all of its history falls under the study, but an exclusively interesting time period. In this context, the following types of balances can be distinguished:

• opening balance;
• debit turnover for the period;
• credit turnover for the period;
• balance for the period;
• outgoing balance.

Initial or opening balance shows the account balance at the time of the start of the operation. The basis for the calculation is the operations that were carried out earlier.

The final or outgoing balance determines the account balance at the end of the specified period. Most often, the final result of the calculation is the arithmetic sum of the opening balance and turnovers for the entire period.

The basis for the calculation debit and credit turnovers are operations carried out in a certain time period.

Balance for the period is the result of transactions at a specific time.

Foreign trade relations

If we talk about external trade relations, then the amount of exports and imports for the specified time period is often considered here. The resulting difference between the total value of imports and exports is called the trade balance. In this case, the balance can be negative or positive.

• In the first case, there is an excess of imports over exports.
• The positive balance will determine the excess of exports over imports, which essentially means a situation in which the country sells more goods, rather than buying them.

There is also a concept called the balance of payments. This is the name of the difference between foreign receipts and payments outside a particular country. The balance of payments can also be positive or negative.

• In the first case, the excess of all payments that enter the country from abroad over the payments that are made by this country is determined.
• With a negative balance of payments, there is an excess of payments over receipt of payments.

International payments are most often made in the most convertible currency.

The word is of Italian origin, its translation sounds roughly like "calculation" or "remainder". Since the 19th century, the concept began to be applied to account balances. In principle, the semantic load of the word has not changed and acquired an appendage - the use in a figurative sense, use in the description of foreign economic activity. By asking the question, what is it in simple words, we expect to hear something unusual. However, the term has not lost its origins and is still associated primarily with accounting.

What is a balance in simple words

Balance is the difference between the debit and credit values ​​of the accounts. In the most general of the values, the balance assumes a certain balance for a certain day, a difference. We will dwell on the types of balances a little later, but now we will consider examples of the meanings of this word in different areas.

In foreign trade, this is the difference between country exports and imports. By analyzing the balance of payments, you can analyze the floating exchange rates of the Russian Federation and determine the pressure on the national currency rate.

In payments - the difference between the amounts paid and received from counterparties. In receipts for payment of utility bills - this is the balance (that is, overpayment from the previous month) on the personal account of the apartment.

What is a balance in accounting in simple words

As mentioned above, for accounting, this concept is almost sacred. Reflecting the difference between debit and credit of accounts, the balance can be on the left or right side of the account. Recall that the right side is a loan showing the receipts to the account when it is passive and the expense when the account is active. The left side is a debit, where, on the contrary, receipts are displayed when the account is active, and expenses when the account is passive.

With each movement of the amounts on the account, the difference between the right or left side changes. Thus, the account balance changes.

Consider the simplest example of calculating the balance in the accounting of the account in the table below.

Suppose we have a firm, which accounts for the movement of raw materials. Such an account will be active (raw materials are a resource, an asset), therefore at the beginning of the month we have a debit balance - raw materials are available for 10,000 rubles. RF. In the course of the month, raw materials were sold (by 5 and 1 thousand rubles of the Russian Federation, respectively), which means they were debited from the account. The purchase went to an asset on a debit of 3 thousand rubles. RF.

By the end of the accounting period, summing up the turnovers on debit and credit, we calculate the final debit balance (at the end of the month) - 10,000 + 3,000 - 6,000 = 7,000 rubles. RF. This amount is also the answer to the question: what does the account balance mean?

If the balance is zero, then such an account is usually called closed.

Balance types, their characteristics

Above, we in one way or another touched on most types of balances, but in this section we offer a more detailed and structured description of them.

• Debit balance - the state of the account, reflected in debit. A characteristic feature of this state is that debit exceeds credit. This balance reflects the state of the organization's assets as of the required date.
• A credit balance is a certain state of an account. Its specific feature is the fact that the loan exceeds the debit. The state of liabilities (they are also sources of funds) displays the credit balance.
• A surplus occurs when the valuation of funds received by an organization is higher than its expenditure side.
• Passive balance - the situation is exactly the opposite. Formed when the costs are higher than the active part.

Instructions

Generate a turnover sheet for synthetic accounts. It should contain a column with the name of the account and three pairs of columns for calculating debit and credit for the opening balance, turnover for the period and the ending balance. Based on the data from the previous reporting period, enter the debit and credit numbers for the opening balance.

Determine the turnover for the reporting period. To do this, on the basis of accounting data, indicate the amount of debit and credit for each account. Check that the amounts match the original documentation. Otherwise, the mistakes made may lead to inaccuracies when leaving the annual balance.

Analyze the nature of the account for which you want to determine the ending balance. They are divided into active, passive and active-passive. This must be done because the procedure for calculating the balance at the end of the reporting period is different for them.

Calculate the closing balance for active accounts. Receipts to these accounts are shown as debit and disposal as credit. When calculating the balance at the end of the month, it is necessary to add debit turnovers and subtract credit turnovers to the debit opening balances. The result will be the debit bed balance for the active account.

Calculate the closing balance for passive accounts. The reflection of the receipt and disposal of them is reflected in the credit and debit, respectively. Therefore, at the end of the reporting period, a credit ending balance is calculated, which is equal to the sum of the credit opening balance and credit turnovers minus debit turnovers.

Determine the ending balance for active-passive accounts that have both credit and debit sides. To do this, you first need to add up debit opening balances and turnovers and subtract credit indicators from them. If the resulting value is greater than zero, then it refers to the debit of the final balance, and if less, then to the credit without a minus.

Sources:

• count on accounts

Tip 2: How to determine the final balance on passive accounts

The system of accounting accounts is used for accounting, collection, processing and storage of all necessary information, as well as for control, planning, regulation and management of the organization's accounting. For uniformity of the content of the forms of accounting information, a clear list and specific characteristics of each account are used.

Instructions

Remember that all accounting accounts are classified as active and passive. - these are accounts that account for various types of property and other funds, their movement and composition. These are the accounting objects in which they are embedded. On passive accounts reflects the sources of formation of property (capital), their presence and movement, as well as the obligations of the organization. Passive accounts include, for example, account 80 "Authorized capital", account 66 "Settlements for short-term and loans", etc.

Do not forget what is necessary for the formation of the liabilities of the balance, in connection with which they have some peculiarities: - balance on passive accounts only credit. This is due to the fact that liabilities and sources of funds are shown on the right side - on passive accounts an increase in the source of funds is recorded in credit, and a decrease in debit, as opposed to active accounts.

So, to form the final balance on the passive account, reflect the initial remainder sources of property. It is formed on a loan. Then point to accounts all business transactions that cause a change in the opening balance. Amounts that increase the opening balance are recorded against the loan, and amounts that decrease the initial remainder- by debit.

Then add up all the business transactions for debit and credit. The result is a debit and credit turnover on the account. Please note that the opening balance is not taken into account when summing up the turnovers.

After the turnovers on debit and credit have been calculated, proceed to the formation of the final balance (balance) of the accounts. To determine the balance of a passive account, the following is used: Ck = Cn + O (k) - O (d), where Ck is the final balance of the passive account, S is the initial balance of the passive account, O (k) is the loan turnover, O ( e) - debit turnover.

Thus, the passive credit account reflects balances at the beginning and end of the reporting period and business transactions that cause an increase in balances. The debit reflects only business transactions that cause a decrease in balances.

Sources:

• what is reflected in the passive account

The beautiful Italian word "balance" is the balance formed on the account. You can define a gross balance or a credit balance. It depends on which side of the account is larger. However, this concept is used not only in accounting, but also when working on commodity exchanges, analyzing the trade balance or the balance of payments of a country.

Hello dear readers of the blog site. People far from economic activity (including accounting), having heard the word "balance", will never guess what it means.

Therefore, today, in order to be "in the know", we will figure out what the balance is, where it is applied and how it is calculated.

Definition - what is it

"Balance" in translation from Italian translates as " remainder". As you can see, everything is very simple. You can say, "The balance of my pocket money is zero." Not quite Russian, but beautiful and intriguing.

Let's explain with an example: let's say that you received a receipt for the payment of electricity. It contains many sums:

1. your debt at the beginning of the month is the unpaid balance at the end of last month, which is also the opening balance for the current month. This is called the opening balance;
2. charges for electricity for the billing period;
3. the total amount, consisting of the following terms: initial balance + accruals - possible adjustments - amounts paid in the current period = final balance... This is the total you need to pay.

The balance is the difference (account balance) between receipts and expenses for a specific time interval.

This term is used in economics and accounting, i.e. where it is necessary to calculate the final result in numerical terms:

Types of accounting balances

In accounting, "balance" is a term that carries a specific functional load. It is calculated by the debit and credit of a specific account, therefore, they are distinguished:

1. debit balance- This is the total amount calculated on the debit in excess of the amount calculated on the loan. Displays the status of the company's assets. In simple terms, this is the state of the account, in which the amount of receipts exceeds the amount of expenses (costs);
2. credit balance- they talk about this when the sum of the indicators on the loan is more than the amount on the debit, that is, there is a negative balance due to the excess of expenses over receipts (in monetary terms).

If at the end of the billing period debit and credit are equal, then such a balance is called zero, and the account for which it = 0 is closed.

This indicator expresses the state of the account at different intervals of time, therefore it is divided into 2 types:

1. initial- the total amount of the balance at the end of the previous period, respectively, it is the same as the initial one for the current period;
2. the final- the total of activities in monetary terms at the end of the current period.

The formula for calculating the balance on an active account:

Now let's look at all this with an example:

The example shows how the following are formed:

1. debit turnover: all receipts are summed up;
2. loan turnover: all expenses are summed up;
3. final balance: initial amount + debit turnover - credit turnover.

See how the balance sheet looks like on various accounts of a particular company separately for each account and as a result:

* when you click on the picture, it will open in full size in a new window

The role of balance in accounting

The calculation of the balance is the basis for the analysis of the economic activity of the enterprise.

What is evidenced by numerical indicator:

1. about the level of profitability of the entire enterprise or a separate direction of its households. activities;
2. about the stability of the economic position of the enterprise, or, on the contrary, about its proximity to bankruptcy.

In addition, the analysis of balances for different periods allows draw conclusions about successes or mistakes economic management of the company and adjust the further course of its economic activities.

Brief conclusion

Knowledge of economic terms allows you to navigate not only in the news of modern life, but also to apply the knowledge gained in everyday situations. If you want to be "on the wave", then read our blog! You will learn a lot of new and useful things!

Good luck to you! See you soon on the pages of the blog site

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