Balancing off accounts – Ledger and Trial Balance (Senior 6 Entrepreneurship) | Ganzaa

Ledger and Trial Balance

Lessons

Senior 6 · Entrepreneurship

Ledger and Trial Balance

4 lessons

Lesson 3 of 4

Balancing off accounts

25 min

Month end in Huye

It is 31 March. Mutoni wants three answers before she orders April's cement: how much cash she really has, how much her customers owe her, and how much she owes her suppliers. Every figure she needs is already in the ledger, but spread across several lines in each account. Kivu Building Supplies' account, for example, has one line on the credit side and two on the debit side.

To turn each account into one clear figure, the bookkeeper balances it off: works out the difference between the two sides, closes the account for March and opens it again for April with that single figure.

Definition

Balance: the difference between the totals of the two sides of an account. If the debit side is bigger it is a debit balance; if the credit side is bigger it is a credit balance.

\text{balance} = \text{total of the bigger side} - \text{total of the smaller side}

Example: Kivu Building Supplies: credits Frw 1,500,000, debits Frw 1,000,000, so a credit balance of Frw 500,000.

Definition

Balance carried down (c/d) and balance brought down (b/d): to close an account at the end of a period, the balance is written on the smaller side as balance c/d, so that both sides total the same. It is then written on the opposite side, on the first day of the next period, as balance b/d. The balance b/d is the account's opening figure for the new period.

Example: 31 Mar Balance c/d Frw 500,000 on the debit side of Kivu's account; 1 Apr Balance b/d Frw 500,000 on its credit side.

How to balance off an account

The same four steps work for every account with entries on both sides. Two special cases:

Entries on one side only (such as Sales, with three credits): add them, write the total as balance c/d on the empty side, total both sides and bring the balance down.
A single entry (such as Rent, one debit of Frw 250,000): most bookkeepers leave it as it is, because the entry already is the balance.

When an account runs onto a new page in the middle of a period, the words balance c/f (carried forward) and balance b/f (brought forward) are used in the same way.

What a balance tells you

Account	Normal balance	What it means
Cash, bank, fittings, motorcycle	Debit	An asset the business has
A debtor (Umucyo Builders)	Debit	An asset: money the customer still owes
A creditor (Kivu Building Supplies)	Credit	A liability: money the business still owes
Purchases, rent, wages, returns inwards, drawings	Debit	Expenses (and the owner's withdrawals) so far this period
Sales, returns outwards, commission received	Credit	Incomes (and reductions of purchases) so far this period
Capital	Credit	What the business owes its owner
Bank, when overdrawn	Credit	An overdraft: a liability to the bank

Tip

"Carried down, short side; brought down, other side." The c/d figure always goes on the side that is short, above the totals. The b/d figure always goes on the opposite side, below the totals. The side where the b/d lands names the balance: b/d on the debit side is a debit balance.

✦

Worked example 1: balancing the cash column

Balance Mutoni's cash account at 31 March.

Step 1: add both sides. Debits: $300,000 + 420,000 + 510,000 = 1,230,000$ . Credits: $180,000 + 100,000 + 35,000 + 120,000 + 600,000 = 1,035,000$ .

Step 2: find the difference. $1,230,000 - 1,035,000 = 195,000$ . The credit side is short, so the balance c/d goes there.

Steps 3 and 4: total, rule off and bring down.

Cash account (cash column of the cash book)
Dr			Cr
Date	Details	Frw	Date	Details	Frw
1 Mar	Capital	300,000	25 Mar	Wages	180,000
10 Mar	Sales	420,000	27 Mar	Drawings	100,000
28 Mar	Sales	510,000	29 Mar	Electricity	35,000
			29 Mar	Purchases	120,000
			31 Mar	Bank (C)	600,000
			31 Mar	Balance c/d	195,000
		1,230,000			1,230,000
1 Apr	Balance b/d	195,000

Interpret: a debit balance of Frw 195,000. Mutoni should find exactly this much cash in the till on the morning of 1 April. Balancing the bank column the same way gives debits $5,800,000$ and credits $2,050,000$ , a debit balance of Frw 3,750,000 in the bank.

Worked example 2: a creditor and a one-sided account

(a) Kivu Building Supplies. Credits Frw 1,500,000; debits $100,000 + 900,000 = 1,000,000$ . The debit side is short by Frw 500,000.

Kivu Building Supplies (purchases ledger)
Dr			Cr
Date	Details	Frw	Date	Details	Frw
12 Mar	Returns outwards	100,000	3 Mar	Purchases	1,500,000
22 Mar	Bank	900,000
31 Mar	Balance c/d	500,000
		1,500,000			1,500,000
			1 Apr	Balance b/d	500,000

The balance b/d is on the credit side: Mutoni owes Kivu Frw 500,000, a liability.

(b) The Sales account has three credits and no debits: $420,000 + 510,000 + 1,890,000 = 2,820,000$ .

Sales account (general ledger)
Dr			Cr
Date	Details	Frw	Date	Details	Frw
31 Mar	Balance c/d	2,820,000	10 Mar	Cash	420,000
			28 Mar	Cash	510,000
			31 Mar	Sundry debtors	1,890,000
		2,820,000			2,820,000
			1 Apr	Balance b/d	2,820,000

A credit balance of Frw 2,820,000: March's sales income, cash and credit together.

Warning

Watch for impossible balances. A cash account can never have a credit balance: nobody can pay out more notes and coins than they hold, so a credit balance on cash means an error, such as a receipt that was never recorded. A bank account can have a credit balance, but only when the bank has agreed an overdraft. Also check that the two totals sit on the same line and that each b/d is dated the first day of the new period.

Accounting Lecture, "Balancing Accounts (balance cd and bd)" (about 4 minutes). Watch where the balance c/d is written, how the two totals are made level, and on which side the balance b/d appears.

✦

Practice

Explain the difference between a balance c/d and a balance b/d.
Balance this debtor's account at 31 May: Rukundo Stores, Dr 2 May Sales Frw 640,000, 18 May Sales Frw 210,000; Cr 10 May Bank Frw 400,000, 25 May Returns inwards Frw 30,000. What does the balance mean?
Balance this creditor's account at 31 May: Nyanza Dairy, Cr 4 May Purchases Frw 900,000, 20 May Purchases Frw 350,000; Dr 15 May Bank Frw 900,000, 28 May Returns outwards Frw 50,000.
State whether each account normally has a debit or a credit balance: (a) Capital; (b) Wages; (c) Motor van; (d) Returns outwards; (e) Drawings; (f) Commission received.
A bank account shows debits totalling Frw 2,300,000 and credits totalling Frw 2,750,000. Find the balance and explain what it means.
A cash account shows debits of Frw 820,000 and credits of Frw 870,000. Explain why the bookkeeper must look for an error.
A student balances Umucyo Builders' account by writing "Balance c/d 300,000" on the DEBIT side and "Balance b/d 300,000" on the CREDIT side. Analyse what goes wrong.

Show answersHide answers

Balance c/d is written on the smaller side at the end of a period to make both sides equal; balance b/d is the same amount written on the opposite side at the start of the next period, as the account's opening balance.
Debits $640,000 + 210,000 = 850,000$ ; credits $400,000 + 30,000 = 430,000$ ; balance $420,000$ . Write 31 May Balance c/d 420,000 on the credit side; totals 850,000 on both sides; 1 Jun Balance b/d 420,000 on the debit side. Rukundo Stores owes Frw 420,000.
Credits $900,000 + 350,000 = 1,250,000$ ; debits $900,000 + 50,000 = 950,000$ ; balance $300,000$ . 31 May Balance c/d 300,000 on the debit side; totals 1,250,000; 1 Jun Balance b/d 300,000 on the credit side: the business owes Nyanza Dairy Frw 300,000.
(a) Credit; (b) debit; (c) debit; (d) credit; (e) debit; (f) credit.
$2,750,000 - 2,300,000 = 450,000$ , a credit balance: the account is overdrawn by Frw 450,000, which is a liability to the bank.
Payments (870,000) exceed receipts (820,000), which would give cash a credit balance of Frw 50,000. It is impossible to pay out more cash than you hold, so a receipt has been left out or a payment recorded wrongly or twice.
The debit side would total $850,000 + 300,000 = 1,150,000$ against 550,000 on the credit side, so the totals do not agree. The b/d on the credit side would say that the business owes Umucyo Frw 300,000, turning an asset (a debtor) into a liability. The c/d belongs on the short (credit) side and the b/d on the debit side.

Sources and credits

Video: Balancing Accounts (balance cd and bd), Accounting Lecture, embedded from YouTube.

Written by Ganzaa: the Huye month-end case, the balancing diagram, the tables, the worked examples and the practice items. The businesses, names and figures are illustrative (2026).

1Month end in Huye

2How to balance off an account

3What a balance tells you

Month end in Huye

How to balance off an account

What a balance tells you