Closing Balance

The debit or credit balance of a ledger account in the Chart of Accounts at the end of an accounting period or year-end is called closing balance. This closing balance becomes the opening balance for the next accounting period.

For example, the positive or negative amount that you have in an account at the end of June 30, say Rs. 10,000 will be the closing balance for that account. Now, this amount will be the same at the start of July 1 for that account and it will become the opening balance on July 1.

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