Sign In

For the sake of quality, our forum is currently "Restricted" to invitation-only. In case if you wish to join our forum, please send an email seeking an invitation to "[email protected]".

Forgot Password

Lost your password? Please enter your email address. You will receive a link and will create a new password via email.

Captcha Click on image to update the captcha.

You must login to ask question.

What is Debit Balance and Credit Balance?

Debit Balance and Credit Balance

A ledger account can have both debit or a credit balance which is determined by which side of the account is greater than the other. Debit balance and credit balance are terms often used in the accounting world hence it is important to understand the distinction and their exact meaning.

 

Debit Balance

While preparing an account if the debit side is greater than the credit side, the difference is called “Debit Balance”. So, if Debit Side > Credit Side, it is a debit balance.

Cash Account

 To ABCD 1000 By ZYX 500
 To XYZ 2500 By CBA 2000
    By Balance c/d 1000
 Total 3,500 Total 3,500

Above example shows the debit balance in the cash account (By Balance c/d) which is shown on the credit side.

Related Topic- Three Golden Rules of Accounting

 

Credit Balance

When the credit side is greater than the debit side the difference is called “Credit Balance”. So, if Credit Side > Debit Side, it is a credit balance.

Creditor’s Account

 To Cash A/C 10,000 By Purchases A/C 25,000
 To Balance c/d 15,000   
 Total 25,000 Total 25,000

Above example shows credit balance in creditor’s account (To Balance c/d) which is shown on the debit side.

 

>Read What are Final Accounts?