How To Show A Positive Or A Negative Balance In Accounting

Positive And Negative Balance / Amount In Accounting

Part 1 - How To Show A Positive Balance In Accounting

The positive balance of an Account is shown on the favorable side in the Ledger Account. Assets such as your bank account shows positive balance on credit side as when you deposit cash into your bank account then it is an asset for you to pay bills and repays loan but it is a Liability for your bank as the bank has liable to pay you for the deposited money, and Expenses have usual / positive debit balance, so these are always show on the debit side in the ledger account while Revenues, Liabilities and Equity are shown on favorable credit side in the ledger account. We do not add any plus sign but it is understood that the account balance has a positive balance as it is recorded in its favorable side in the ledger account.

For Example, Cash (a Current Asset) is shown in the Trial balance in the Debit Column shows that cash has positive balance as cash has favorable debit balance or normal balance on debit side in ledger account.

Part 2 - How To Show A Negative Balance In Accounting

To show negative balance of an account, a minus sign or small opening and closing bracket e.g., -50000 or (50000) are used. As this negative balance is unusual / unfavorable for a account which has balance opposite to its favorable balance. For Example, if cash has negative balance of Rs. 500000, then it is shown in the credit side in the ledger account as a current liability.