Balancing the 'T'

While the T account allows us to see clearly how we posted the transactions, it doesn't show us the Balance of an account.

We need to know the balance in order to prepare the Accounting Reports and to answer such questions as 'How much have we spent on power so far?' or 'How much do cash do we have in the Bank?'

Calculating the Balance

We need to find the balance for all the accounts.

Once this is done we can produce a Trial Balance.

Practice Exercises

You should attempt exercise 1.7

Exercise