The procedure of balancing an account step wise.

1.Total both the amount columns (debit and credit) and ascertain the difference in two totals (use a separate rough sheet for this purpose). If there is no difference between the totals of the two sides, it means there is nil balance on this account. This means, the account is closed. However, if there is some difference in the two totals, such difference is called the 'balance'. If the debit side total is more than the credit side total (as in Pankaj's Account), the difference is called debit balance. If, on the other hand, the total of the items on the credit side is greater than the total of the debit side, the difference is called credit balance.

2.Put the difference between the two sides on the side showing a smaller total.

3.Enter the date on which balancing is being done, in the date column. Note that balancing is not a transaction, as this does not involve any transfer between two accounts.

4.If the balance is entered on the debit side, then write in particulars column 'To Balance c/d'. In case, the balance is entered on the credit side, write in particulars column 'By Balance c/d' (c/d stands for carried down).

5.Now total both the amount columns. There might be more entries on one side, as compared to the other. Even then, the totals must be written on the same horizontal line. Draw one line across both the amount columns, on the same horizontal line. Put the totals on both the sides, which will now be identical and then draw line immediately beneath the totals (see Pankaj's Account on the previous page).

6.The closing balance (which was carried down) has now to be brought down on the side which was showing the bigger total. In other words, at the beginning of the next period, the debit balance is shown on the debit side and credit balance on the credit side of the account. It is called opening balance. The balance brought down is usually given the date following the balance date. After entering the date in the date column, if the balance brought down is on the debit side, write 'To Balance b/d' in particulars column. Similarly, if the balance brought down is on the credit side, write 'By Balance b/d' (b/d stands for brought down), particulars column. Suppose an account was balanced on June 30, and the closing balance was entered on the credit side as 'By Balance c/d '. On July 1, this balance would be entered on the debit side as 'To Balance b/d' below the total.