How to balance a T-account: balance c/d and b/d

A T-account is an account drawn as a letter T. The name goes across the top, debits go on the left side and credits go on the right side.

During a period, entries build up on both sides. Balancing the account turns them into one figure, the balance. It is the difference between the two sides.

Balance c/d

Balance carried down. The balance, written on the smaller side so that both sides add up to the same total.

Balance b/d

Balance brought down. The same figure, written on the opposite side to start the next period.

Debit balance

The debit side was the bigger one. Assets and expenses normally have a debit balance.

Credit balance

The credit side was the bigger one. Liabilities, capital and income normally have a credit balance.

Accounts are balanced at the end of a period, such as a month. The balances are then listed in the trial balance.

Post every entry for the period before you start. Then work in this order.

1. Add up the debit side.
2. Add up the credit side.
3. Take the smaller total from the bigger one. The difference is the balance.
4. Write the balance on the smaller side as balance c/d, with the last day of the period. This makes the two sides equal.
5. Write the total under each side. Both must show the same figure, which is the total of the bigger side.
6. Write the balance again below the totals, on the opposite side, as balance b/d, with the first day of the next period.

The balance c/d is not a transaction. It closes the account for the period. The balance b/d opens it again, so the next period starts from the right figure.

Ashdown Garden Care started trading on 1 April. This is its Bank account for the month, after balancing.

The debit side adds up to £2,525.00. The credit side adds up to £1,035.00. The difference is £1,490.00.

The credit side is the smaller one, so the balance c/d goes there. The credit side then adds up to £2,525.00, the same as the debit side.

On 1 May the £1,490.00 is brought down on the debit side. It is a debit balance: the business has that much money in the bank.

Now a liability. In April the Trade payables account has two credits, for supplier invoices of £460.00 and £315.00. It has one debit, for a payment of £280.00.

The credit side adds up to £775.00 and the debit side to £280.00, so the balance is £495.00. The debit side is the smaller one, so the balance c/d goes on the debit side.

It is brought down on the credit side. It is a credit balance: the business still owes its suppliers £495.00.

The balance is named after the side it is brought down on, not the side it was carried down on.

The side also says what the balance means. A debit balance on Bank is money in the bank. A credit balance on Bank is an overdraft: the business owes the bank.

If the two sides add up to the same figure, there is no balance. Write the totals and carry nothing down.

• Writing the balance c/d on the bigger side. It goes on the smaller side, because its job is to make the two sides equal.
• Bringing the balance down on the same side it was carried down on. It always crosses to the opposite side.
• Naming the balance after the side the balance c/d sits on. A balance c/d on the credit side is a debit balance.
• Leaving out the opening balance b/d when adding up a side. It is part of that side's total.
• Writing two different totals. If the totals differ, the balance or the adding up is wrong.
• Posting the balance to another account. Carrying a balance down moves nothing between accounts.

• Both sides show the same total.
• The smaller side plus the balance c/d equals the bigger side.
• The balance b/d is the same figure as the balance c/d, on the opposite side.
• The balance is on the side you expect for that kind of account. A credit balance on a van or on rent means an entry is missing or on the wrong side.

When every account is balanced, the balances are listed in a trial balance. The debit balances and the credit balances must add up to the same total.