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Balancing-off accounts

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Presentation on theme: "Balancing-off accounts"— Presentation transcript:

1 Balancing-off accounts
Chapter 5

2 Debtors owe us nothing Dr K.Tandy a/c Cr Aug1 Sales 144 19 Sales 300
444 Aug22 Bank 144 28 Bank 300 444 In this account, the customer (K.Tandy) is no longer a debtor, (she does not owe us any money now). So her account is balanced-off. We say her account is closed off.

3 Debtor still owes us Dr K.Wood a/c Cr Aug1 Sales 158 15 Sales 206
482 Aug22 Bank 158 158 This account does NOT balance. We need to balance-off the account

4 Debtor still owes us Dr K.Wood a/c Cr Aug1 Sales 158 15 Sales 206
482 Aug22 Bank 158 158 Find the difference between the two balances Add the different on to the smaller side, so it will balance

5 Debtor still owes us Sep1 Balance b/d 324 Dr K.Wood a/c Cr
Aug Sales Sales Sales 482 Sep1 Balance b/d 324 Aug Bank Aug31 Balance c/d 482 Balance carried down Enter the balance here so the two sides equal Now the two sides equal Balance carried down Enter the balance here to start the next month

6 Debtor still owes us Sep1 Balance b/d 324 Dr K.Wood a/c Cr
Aug Sales Sales Sales 482 Sep1 Balance b/d 324 Aug Bank Aug31 Balance c/d 482 So the account shows us that K.Wood still owes us 324 The Balance c/d is the last day of the month The Balance b/d is the first day of the next month

7 We owe money to a creditor
Dr E.Williams a/c Cr Aug Bank Aug Balance c/d 364 Aug Purchases Purchases 364 Sep Balance b/d Find the difference between the two balances Add the different on to the smaller side, so it will balance

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