The respective accounts for most businesses are closed off at the last day of each month and reopened for the first day of the following month. The steps by which this is done is referred to as balancing off the accounts. An account balance is the difference between the totals on the debit side, and the totals on the credit side of the account of the same account. The account balance always belongs to the greater side.
The account balance is entered on the lesser side at the end of the month as a balance carried down. This may be written as ‘balance c/d’. When the account is reopened the first day of the following month the same balance is entered on the opposite side as a balance brought down. This may be written as “balance b/d.’
If the debit side exceeds the credit side, the account is said to have a ‘debit balance’. If the credit side exceeds the debit side, the account is said to have a ‘credit balance.’