How To Determine The Opening Balance

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How To Determine The Opening Balance
How To Determine The Opening Balance

Video: How To Determine The Opening Balance

Video: How To Determine The Opening Balance
Video: How to deal with opening balances in accounting |Journal entries for opening balances| 2024, March
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When analyzing the activities of a company, economists are faced with such a concept as an initial balance. In general, the balance is calculated as the difference between the debit and credit of the account. The initial balance is determined based on previous transactions.

How to determine the opening balance
How to determine the opening balance

Instructions

Step 1

To understand how the balance is calculated, consider a simple example. Let's say you went to the store on April 30th. We bought 2,000 rubles worth of groceries. On the same day, you received a salary of 10,000 rubles. The next day, you went shopping again and spent 1000 rubles. You need to determine the opening balance. This indicator is equal to the finished balance of the previous period. Thus, on April 30, you received 10,000 rubles, and spent 2,000 rubles. The balance of funds at the end of the day will be equal to 10,000 - 2,000 = 8,000 rubles. This amount will be the initial balance on May 1.

Step 2

If you need to calculate the balance of the company, generate the required account card. Let's say you want to calculate the cash balance of the organization at the beginning of the reporting period. To do this, look at the balance on debit 50 of the account and credit for the previous period. Calculate the difference. The amount received will be the initial balance.

Step 3

If you use automated programs in your work, you just need to look at the account information. Let's say you want to know the opening balance as of May 1, 2012. Form a card, indicating the period from May 01. The required indicator will be indicated in the very top line. You can also watch it by setting the period to April 30, 2012, in this case the balance will be indicated at the very end.

Step 4

If you want to calculate the opening balance manually, select all the necessary documents. Let's say you need to calculate a vendor account metric. To do this, prepare for the previous period all invoices from counterparties, statements from current accounts and cash outflow orders. Write "Debit" and "Credit" on a piece of paper. All that you have given - put on a loan; all that you received is debit. Add up the expense and then the income. Calculate the difference. The amount received will be the balance at the beginning of the next period.

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