What is A Ledger Balance?
In the previous articles we discussed about the Ledger in Principles of Accounting , w hich is an important step of " Steps in the Accounting Cycle " . If you don’t read this one then kindly read so that you better know about this term. Here we discuss about What Does Ledger Balance Mean. There are two kinds of balances in the accounts of sole proprietorship, partnership or company businesses: Ø Debit Ø Credit Ø Debit Balance It means Debit side is higher than Credit side and hence to equalize both sides, the difference between Debit and Credit side is shown on the Credit side. For Example, Cash Ledger has opening balance of Rs.80000, Cash received from Customers is Rs.50000. On the credit side Rs.30000 is paid to Suppliers. As the Debit side is greater than credit side and credit side is shortage of Rs.90000 and to equalize total debits and total credits, a value of Rs.90000 is shown on the credit side and that is the ending bala...