Balance

1. Banking.

The balance in a bank account reflects all items that have been deposited into and paid out of the account.

Example 1: Overdrawn account becomes balance in our favour

We have an overdraft of £50k at the start of April.

The balance at the start of a period is known as an opening balance. In our example it is £50k.

So we owe £50k to the bank.

We deposit £60k into the account during the month of April.

This repays our overdraft, with some cash left over.

At the end of April, our bank account now has a positive amount in it, of:

-50 + 60 = 10

We have £10k cash in our bank account at the end of April.

The amount at the end of a period is the closing balance. In our example the closing balance is £10k.

Example 2: Closing overdrawn balance in favour of the bank

Our opening bank account balance for the month of May is £10k cash.

So the opening cash is £10k.

We pay £30k out of the account during May.

Opening balance + deposits - withdrawals = Closing balance

+10 - 30 = -20

This is an overdraft of £20k at the end of May.

We have a closing overdraft balance of £20k.

2. Accounting.

The balance in a financial account reflects all items that have been posted to the account.

3. International trade.

The balance in international trade between two countries is the difference in the amounts exports and imports that each country makes with the other.

4. Compromise - proportion - noun.

A situation of compromise or proportionality, rather than of extremes.

5. Verb - compromise - proportion.

To bring about a situation of compromise or proportionality, rather than a situation of extremes.

6. Accounting - bookkeeping.

To check and validate accounting records for a given period.

This includes finding and correcting errors so far as possible, for example double counting and transposition errors.

This process is sometimes known as balancing the books.

Other types of error are inherently more difficult to detect, for example omissions.

See also

• Available balance
• Balance and transaction activity
• Balance netting
• Balance of payments
• Balance of trade
• Balance sheet
• Balance sheet date
• Balance sheet exposure
• Balance sheet insolvent
• Balance sheet ratio
• Balance sheet reduction policy
• Balanced
• Book
• Bookkeeping
• Cash
• Cash balance
• Cash flow
• Cleared balance
• Compromise
• Credit balance
• Debit balance
• Double counting
• Event after the balance sheet date
• Flow
• Idle balance
• Inflow
• Invisibles balance
• Ledger
• Ledger balance
• Off balance sheet
• Off-balance sheet finance
• Off balance sheet risk
• Outflow
• Post balance sheet event
• Reducing balance
• Target balance
• Transaction balance
• Transposition error
• Trial balance
• Visibles balance
• Zero balance account