How To Show A Positive Or A Negative Balance In Accounting

Positive And Negative Balance In Accounting / Positive Versus Negative Balance In Accounting

How To Show A Positive Balance In Accounting

The positive balance of an Account is shown on the favorable side of in the Ledger Account. Assets and Expenses have 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.

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 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.