Calculating the closing balance is essential for maintaining accurate financial records. Here’s a quick guide to get you started.
- Identify Opening Balance: Start with the balance at the beginning of the period.
- Add Total Credits: Sum up all credits (incoming funds) during the period.
- Subtract Total Debits: Deduct all debits (outgoing funds) from the total.
For example, if your opening balance is $1,000, credits are $500, and debits are $300, your closing balance would be $1,200 ($1,000 + $500 – $300).