Balancing the Account Video Lecture - SSC CGL Tier 2 - Study Material,

hi today's lesson is on balancing a
ledger account so by the end of this
video you hopefully will be able to go
through the process and balance a ledger
account so when balancing a ledger
account it firstly it is done at the end
of the reporting period and you'll see
why as we progress through it's a
similar process to putting the ledger in
that you calculate the balance in the
account however it is more formal and
the ledgers that we balance our only
asset liability or owner's equity
accounts so you can remember that by the
only accounts that we balance are ones
that are going to end up in the balance
sheet and balancing your ledger accounts
require the double-entry you'll have to
enter a debit and a credit so let's talk
to the process and you'll see all this
work so basically the first thing you
want to do is add up the total debit and
credit side and write down the larger of
the two additions that you've done on
both sides of the ledger then you want
to calculate the balance in that ledger
account by subtracting that large total
you did it step one from the smaller
value and then you want to enter the
balance as a correct ledger entry with
one debit and one credit to the same
ledger account probably best showing
through an example so I'm going to talk
you through two separate examples so the
first one involves our bank ledger which
is an asset account and as you can see
we have all these transactions from the
month of February so let's start our
balance sorry our process of balancing
the ledger so firstly you want to total
the amounts on each side and write the
larger two amount
at the bottom of both sides so 20-hour
debit side equals twenty-five thousand
plus three thousand six hundred fifty
totaling 28,650 which is the larger
amount because the credit side is ten
thousand plus sixteen thousand being
twenty-six thousand so what we want to
do is write the larger of the two
amounts of the 28,650 on both sides and
what we do is we rule off with a double
line and that total to show that that is
the end of of a period so step two is to
calculate the balance so basically you
need to put in the amount that makes our
credit side total the now 28,650 so our
balancing amount is two thousand six
hundred and fifty now step three you
want to do a proper ledger entry so when
we've entered our balance here we have
credited our bank ledger so to do a
proper double entry we need to also do a
corresponding debit entry and we put
that below our total line here so what
this is showing is that we have debited
the account two thousand six hundred and
fifty and credited for two thousand six
hundred fifty however we've put our
debit entry or our balance is being
carried forward to the first of mark so
the following reporting period so we'll
start at the first of March with a
balance of two thousand six hundred
fifty in our bank ledger so let me show
you that same process but with a
liability account so let's have a look
at our creditors control so we have a
few transactions this time for the month
of June and as you can see we've had a
balance carried forward from
may that's brought us on the first of
June our balance is 5,000 so let's talk
through that three-step process again so
step one you want to total the debit
side and the credit side at this time
and enter the larger of the two of the
total on both sides so this time our
credit side was larger totaling 8500 so
we've put our total of 8500 on the
credit side and the debit side now step
two we need to calculate our balance
which this time is 5500 so if you have a
look now that our debit side will sum to
8500 now we've essentially debited our
creditors control so we need to make
sure that's the double entry so our
final step is to balance that ledger
entry and carry our new balance forward
to the next period so we're starting
first of July with a balance in our
creditors control account of 5500 so
hopefully that's making a bit more sense
now so just remember that you balance
the ledger the more formal process you
do that at the end of the reporting
period you only do it for balance sheet
accounts so assets liabilities and
owner's equity and make sure you put
that double entry in so there's a debit
and a credit thank you