Video Transciprt 4

Hello Friends,

Welcome back to Veera's channel.

Free training for finance classes.

We appologize for a week delay in publishing our class.

Hope you enjoyed our previous class

If you haven't seen our previous class on ledgerI strongly recommend to it watch before continuing with this class on Balancing of ledgers

To watch our previous classes please cclick on links provided in the below video description

With no further delay lets start.

After previous class of posting the transactions in ledgers or Accounts, in this class we are going to discuss on the most important topic balancing of ledger accounts

So to understand the concept of Balancing of accounts

We are taking Cash account from Sandhya's business from our previous class so if you haven't watched it, I'm once again suggesting to watch the previous class before continuing with this class

The links for previous classes are given in the below description

So if you see we have transactions and debit side and credit side we'll do a total on both sides

On debit side we get a total of 10,19,000 and on credit side the total is 5,85,000

After making totals we should see which side total is higher

here in this example we can clearly see that Debit side total is greater than credit side total

So remember its very important when ever any account has debit side total is greater than credit side total then that account has Debit Balance

Here the debit balance is nothing but 1019000-585000 =4,34,000

Now in accounting terms we could say that This cash account is haveing a debit balance of 434000

Next slide

Now here we are taking the Capital Account from Sandhya's Business from our previous class

Here if you see we don't have transactions on debit side, so the total on debit side can be considered as zero, and obviously the total on credit side is 10lacs

So which side total is higher, its very clear the credit side total is higher

When ever the credit side total is greater than debit side total we say that account has Credit balance

Here the credit balance is nothing but 1000000-0=10 lacs

Now in accounting terms we could say that this capital account has a credit balance of 10lacs
Next slide

Now we'll see an example of furniture account taken again from previous Video of Ledger postings

By seeing the account can we say, what balance it is having, credit or debit?

I see no amount on credit side, so the total on debit side is greater than the total on credit side so this furniture account has debit balance.

Lets recap as this is very important to remember or else there is no point of going to next topics in accounting

When ever any account has debit-total greater than credit-total that account said to have debit balance

Similarily when every any account has credit side total greater than debit side total then that account is said to have credit balance

I reiterate again this is very important to remember for understanding further concepts in accounting so please try to remember crsytal clearly as what is a debit balance and what is a credit balance