Balancing-off accounts Chapter 5

Debtors owe us nothing Dr K.Tandy a/c Cr Aug1 Sales 144 19 Sales 300 444 Aug22 Bank 144 28 Bank 300 444 In this account, the customer (K.Tandy) is no longer a debtor, (she does not owe us any money now). So her account is balanced-off. We say her account is closed off.

Debtor still owes us Dr K.Wood a/c Cr Aug1 Sales 158 15 Sales 206 482 Aug22 Bank 158 158 This account does NOT balance. We need to balance-off the account

Debtor still owes us Dr K.Wood a/c Cr Aug1 Sales 158 15 Sales 206 482 Aug22 Bank 158 158 Find the difference between the two balances Add the different on to the smaller side, so it will balance

Debtor still owes us Sep1 Balance b/d 324 Dr K.Wood a/c Cr Aug1 Sales 158 15 Sales 206 30 Sales 118 482 Sep1 Balance b/d 324 Aug22 Bank 158 Aug31 Balance c/d 324 482 Balance carried down Enter the balance here so the two sides equal Now the two sides equal Balance carried down Enter the balance here to start the next month

Debtor still owes us Sep1 Balance b/d 324 Dr K.Wood a/c Cr Aug1 Sales 158 15 Sales 206 30 Sales 118 482 Sep1 Balance b/d 324 Aug22 Bank 158 Aug31 Balance c/d 324 482 So the account shows us that K.Wood still owes us 324 The Balance c/d is the last day of the month The Balance b/d is the first day of the next month

We owe money to a creditor Dr E.Williams a/c Cr Aug21 Bank 100 Aug31 Balance c/d 264 364 Aug2 Purchases 248 15 Purchases 116 364 Sep1 Balance b/d 264 Find the difference between the two balances Add the different on to the smaller side, so it will balance