Balancing accounts

After entering numerous transactions, the ledger accounts may need to be balanced to show the net value contained within them. At the end of a financial period this is referred to as closing off the accounts. The procedure to balance an account is shown below.

A simple trial balance
Now that we know how to balance each account, we can perform a simple but essential check on the arithmetical accuracy of the entries we have made. This is known as a trial balance, and shows, at a specific date, every balance in every ledger account, listed under the headings 'debit' and 'credit'.