In accounting, one of the most important and frequently used terms is "balance".Its meaning is well known to those skilled in this field.People are also far removed from the accounts, the word familiar superficially and tend to associate them with a certain difference.In general terms, this is the difference that occurs between the entered and money spent over a given period.However, economist and accountant concept is much deeper and wider.What is the balance and how important it is to account for the financial flows in the organization?Answer this question presented article.
origin and meaning of the term
The word has come into our speech from the Italian and literally translates as "residue", "pay" or "payment".That is the balance in the accounting learned in the nineteenth century.It was then that the word was used as a term for the balance of the accounts of the account.It does not change its value to this day.Although it has become more widespread use in speech.If earlier it was used only in one case - to indicate the difference between debit and credit accounts since the beginning of the twentieth century, its use has expanded beyond accounting.Today the word is used in a figurative sense, it is present in terms of foreign relations.
balance in accounting
Despite the widespread use of the term in modern speech, its main purpose remains unchanged.It is used by accountants in the management accounting at the company and reflects the difference between the amounts recorded on the debit and credit accounts.The disclosure is important to understand the concept of what a debit-credit.
balance can be formed on both sides of the account - left and right.The first is a debit and shows the arrival, if the account is active, and consumption if it passive.The second party - the credit - has the opposite meaning.Each account the difference between the two forms, called "balance."If the debit is more credit, it is considered a debit and is shown in the active part of the balance.If less - a credit (reflected in liabilities).Some accounts have both the one and the other of its kind.In addition, the account balance can get zero, then say that it is closed.In addition to debit and credit, there are other kinds of balance.Let's consider them further.
Types balance accounting
in accounting practices identify several types of balances, namely:
- debit and credit;
- active and passive;
- start and end.
The first two we have already examined.As for the surplus, it occurs when the funds received by the company, it costs more than a product.In the opposite situation, when revenues are less than the actual costs, produced an unfavorable balance.Despite the fact that the difference can be either positive or negative, it is always written with a positive sign.This is due to the fact that, taking into account the principle of economic means of double entry, on the one hand takes into account the operations that led to the growth of material resources, on the other - to decrease.
Now let's deal with the fact that such an initial and final balances.The fact that the analysis of operations carried out in the accounting for some specific period (eg, one month).At the end of his account is closed, and are considered indicators of debit and credit, the difference of which is transferred to the next month.Balance at beginning of the period, calculated on the basis of previous operations, called the initial balance.It is not difficult to guess what the final balance.This is the account balance at the end of the period.It is determined as the sum of the opening balance and turnover for the period under review.
In order to better understand what is the balance, let's look at a simple example of its calculation.Take account of the "Materials".At the beginning of the month it was 1,000 meters of fabric (opening balance).During the accounting period it has been acquired another 200 meters and sold - 600. At the end of the month, a summary of transactions in this account.Closing balance was: 1000 + 200 - 600 = 600 meters.Since this effect is active, the debit exceeds credit, it will be debit.
assume that in the same month, you have a debt of tissue in the amount of 5 thousand rubles.To account for use by the passive "Accounts payable".He gave you 4000 and 2000 received from him on the invoice.At the end of the month an accountant calculated the balance of the 5 - 4 + 2 = 3000 rubles.Since the passive account, the balance is in credit.
Relationship of Foreign Trade
In this area of the economy is also used by the Italian word for the difference.What is the balance in international trade?There allocate at least two of his species - is the balance of trade and balance of payments.Let us examine what these concepts mean.
basis of external trade is the export and import.The difference between these values for a given period is called the trade balance.It can be positive (when exports exceed imports, that is, the country sells more than it buys) or negative (when bucking the trend).Throughout the world, the situation of excess of imports over exports (negative balance of trade) is seen as negative.The reason is simple: as a result of such a policy to flood the foreign goods, why suffer the domestic manufacturer and the money "funneling" abroad.The recommendations of the International Monetary Fund, there are even special reference to the need to maintain a positive trade balance, and this position is often a prerequisite for the issuance of loans to States.However, in America, for example, there is the reverse situation.Over the past few years in this country is dominated by imports, and a negative balance in the tens of billions of dollars.At the same time the conditions of life of the US population may envy the people of many countries, which seek only to such welfare.
balance of payments
in relations between states are always present monetary settlements.The difference of income from abroad and payments to other countries called the balance of payments.It is positive if supplied more than the leaves, and the negative - if the situation is reversed.In the latter case there is a reduction in foreign exchange reserves of the country (if payments are made in currencies such as euros or dollars).To make up for the lack of a need sales of domestic goods for foreign currency.Add funds may also be due to stabilization loans.
balance in payment receipts utilities
Since the beginning of 2012 receipts are more detailed.On the one hand, this is a positive trend, but on the other - the citizens have many questions on its content.For example, many people are interested in what the balance of receipts.This graph shows the balance on the personal account at the beginning of this month.If the value is positive, then the overpayment for housing and communal services, if negative - that the indebtedness.Thus such, it is considered only after the 10th of the month following the settlement (that during this time the residents are required to pay for utilities).Thus, ordinary citizens are faced with the concept of "balance" in everyday life.In this case, it is seen as opening balance in the personal account of their living quarters.
Conclusion In this article, we examined in detail the question of what is the balance of what it is and in what areas is used.The most widely used this concept in accounting in analyzing the operations of the receipt and expenditure of funds to the organization.However, it is used in other areas, including foreign trade, and even housing and utilities sector.