Indicates the account balance. Balance - what is it in simple words. Balance of payments surplus

Hello, dear readers of the blog site. People who are far from economic activity (including accounting), hearing the word “balance”, will never guess what it means.

Therefore, today, in order to be “in the know,” we will understand what a balance is, where it is used and how it is calculated.

Definition - what is it?

“Balance” in Italian is translated as “ remainder" As you can see, everything is very simple. You can say: “The balance of my pocket money is zero.” Not quite Russian, but beautiful and intriguing.

Let's explain with an example: let's say that you received a receipt for paying for electricity. It contains a lot of sums:

1. your debt at the beginning of the month is the unpaid balance at the end of last month, which is also the opening balance for the current month. It is called the opening balance;
2. electricity charges for the billing period;
3. the total amount consisting of the following terms: opening balance + accruals – possible adjustments – amounts paid in the current period = closing balance. This is the final amount you need to pay.

Balance is the difference (account balance) between receipts and expenses for a specific time interval.

This term is used in economics and accounting, i.e. where it is necessary to calculate the final result in numerical terms:

Types of balances in accounting

In accounting, “balance” is a term that carries a specific functional load. It is calculated by the debit and credit of a specific account, therefore it is distinguished:

1. debit balance- this is the total amount calculated on the debit side, which exceeds the amount calculated on the credit side. Displays the status of the company's assets. In simple terms, this is the state of the account in which the amount of receipts exceeds the amount of expenses (costs);
2. credit balance- this is said when the sum of the credit indicators is greater than the debit amount, i.e. there is a negative balance due to the excess of expenses over receipts (in monetary terms).

If at the end of the billing period the debit and credit are equal, then this balance is called zero, and the account for which it = 0 is closed.

This indicator expresses the state of the account at different time intervals, so it is divided into 2 types:

1. initial– the total balance at the end of the previous period, respectively, it is the starting amount for the current period;
2. final– the result of activity in monetary terms at the end of the current period.

Formula for calculating the balance on an active account:

Now let's look at all this with an example:

The example shows how they are formed:

1. debit turnover: all receipts are summed up;
2. loan turnover: all expenses are summed up;
3. final balance: initial sum + debit turnover – credit turnover.

See what the balance sheet looks like on various accounts of a particular enterprise separately for each account and in the end:

*click on the picture to open it full size in a new window

The role of balances in accounting

Balance calculation is the basis for analyzing the economic activities of an enterprise.

What does this indicate? numerical indicator:

1. about the level of profitability of the entire enterprise or a separate area of ​​its business. activities;
2. about the stability of the economic situation of the enterprise, or, on the contrary, about its proximity to bankruptcy.

In addition, analysis of balances for different periods allows draw conclusions about successes or mistakes economic management of the company and adjust the further course of its economic activities.

Brief conclusion

Knowledge of economic terms allows you to navigate not only the news of modern life, but also apply the acquired knowledge in everyday situations. If you want to be “on the wave”, then read our blog! You will learn a lot of new and useful things!

Good luck to you! See you soon on the pages of the blog site

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If not an exact definition, then an understanding of what a balance most of us have. An Italian word that carries the meaning of the words “difference”, “remainder”. The firmly established association with accounting allows us to consider the concept in its context as the difference between the amounts recorded as debits and credits. Final balance, initial balance - first of all, they are what we are talking about when the balance is mentioned. Now we will dwell in more detail on the final one.

Closing balance - what is it?

The ending balance is the residual value at the end of a certain period of time. Despite clarifications of the format “can the final balance be negative?”, it is known from the general accounting course that the balance cannot be negative. The meaning of debt may be implied. But in no case is it written as a negative value - only positive. Even in the case of an exotic score of 60 – active-passive. Its final balance can be debit and credit, which, however, in each case is written as a positive number.

How to find the ending balance?

There is a specificity in finding it based on the indicator of account passivity or activity. Therefore, we will consider two options.

Active accounts reflect changes in households. funds have a debit balance (beginning and ending). Their debit turnover is usually a display of incoming amounts, credit - outgoing amounts.

The formula for calculating the final balance looks like this.

From the end = From the beginning + Deb. Obor. - Cred. Obor.

It can be seen that the final balance of the active account, as stated earlier, is recorded in the debit zone of the table in question.

Every accountant knows what a balance is because he comes across this term in his work. Its value is calculated as the difference between income and expenses resulting from the activities of an enterprise or company.

Back in the 12th century, fund balances were calculated. Since then, this type, coming from the Italians, has become firmly rooted in the financial sector. One cannot do without it when analyzing the foreign trade and balance of payments of the state. By looking at the balance, the specialist sees the financial position of his company.

Account balances, on the basis of which the accounting balance is prepared, help analyze data over a period of time, which can be a month, a quarter or a year. The balance is displayed by debit or credit. To calculate the final balance, you need to know the initial balance. Revenues are added to it and expenses are subtracted, which represents turnover.

In the balance sheet, there are active accounts in which the balance is shown as a debit. At the end of the period it is obtained by minus the loan turnover and adding the debit turnover. They display the balance of goods, fixed assets, current account, and money in the cash register.

In passive accounts, debit turnover is subtracted from the credit balance and credit turnover is added. The balance will be the same. They keep records of depreciation, wages, and authorized capital.

Types of balances

The amounts of transactions are recorded in turnover, which correspond to the income and expense parts. These indicators reflect changes in funds during the reporting period. The balance is the result that is obtained by adding up the transactions that are made on the account for a given period of time.

It is output as:

• initial;
• for a specific period;
• final.

The debit reflects the company's assets - cash and material assets. The credit includes sources that are able to cover the costs of the enterprise.

A debit balance is present in active accounts. Accounting specialists also use active-passive accounts, where the balance can be debit or credit. They take into account the property of firms and organizations, as well as the sources that are capable of generating it. Such accounts display settlements with suppliers, with accountable persons, and keep records of insurance and taxes.

A debit balance indicates an increase in customer debt to the company, a credit balance indicates that the company is increasing its debt to suppliers of goods and services. If the balance becomes zero, the account can be closed.

Export and import indicators

To determine the difference between export and import transactions, the trade balance is calculated, which serves as the most important indicator for each country. It will be positive if the state, as a result of the sale of goods and services abroad, receives revenue that exceeds the costs of purchasing them in foreign countries.

The foreign trade balance allows you to see the ratio of exports to imports. This indicator will be negative when the government spends more money on the purchase of goods and services than it receives from their sale.

Each country wants to have a positive balance, otherwise an excess amount of imports will appear on its territory. Domestic companies will not be able to compete in the market and will begin to incur losses.

Before investing in enterprises of this state, investors pay attention to the foreign trade balance. It determines the risk of non-return of money. The International Monetary Fund is guided by this indicator and decides on possible lending.

However, only using this parameter it is impossible to have a complete picture of the economic situation. Trade deficits do not prevent US residents from having a very high standard of living.

Balance of payments parameters

To analyze the activities of the state in the field of foreign trade, the balance of payments indicator is used. This parameter is defined as the difference between receipts from abroad and funds sent abroad.

A positive balance serves as evidence of the excess of payments that came from states over transferred finances abroad. A negative balance indicates that more funds are being spent than are being returned.

Countries pay each other in currencies that are converted in many countries. These include the euro and the American dollar. Countries with a negative balance of payments typically lose significant foreign currency reserves.

Some of them are able to carry out financial transfers in their national money, but then replenish them by resorting to emission. The United States has no problem printing dollar signs.

Other options are also acceptable, which make it possible to create credit funds by increasing the supply of money using deposit operations carried out by banks.

The Russian Federation trades goods that go abroad for foreign currency. Partners do not have to purchase rubles.

The value of the balance of payments parameter is important in transactions that are carried out on exchanges. The indicator characterizes the debt that appears either with the broker or with his client.

To get the ending balance, you need to know:

• initial balance;
• debit turnover;
• loan movement.

The final value of this indicator, which can be traced on the balance sheet, is calculated as the difference between operations - profitable and costly.

• Debit balance(debit is greater than credit) reflects the state of this type of economic assets on a certain date and is shown in the asset balance sheet.
• Credit balance(credit is greater than debit) reflects the state of sources of economic funds and is shown in liabilities.

If the account has no balance ( balance is zero), then such an account is called closed. In accounting, some accounts may have both a debit and a credit balance at the same time.

In practice, not the entire history of an accounting account is often analyzed, but only a certain period of time, for example, the last month. For these purposes, the following are distinguished:

• Initial balance(incoming) - account balance at the beginning of the period. Calculated based on previous transactions.
• Debit and credit turnover for the period- calculated on the basis of transactions only for the period under review.
• Balance for the period- the total result of operations for the period under review.
• Final balance(outgoing) - account balance at the end of the period. Usually calculated as the arithmetic sum of the opening balance and turnover for the period.

In foreign trade relations

When characterizing foreign trade relations, they often consider the amount of exports and imports over a period, for example, over a year. In this case, the following are distinguished:

• Trade balance- the difference between the cost of exports and imports. Positive trade balance means an excess of exports over imports (the country sells more than it buys). Negative trade balance- excess of imports over exports (the country buys more than it sells). In world practice, it is generally accepted that a negative balance is a bad trend, since excessive imports contribute to flooding the market with imported goods, infringing on the interests of domestic producers. The International Monetary Fund, in its recommendations and conditions for issuing loans, indicates the need and benefit for the economy to have a positive trade balance. At the same time, for several years in a row the United States has had a negative balance of several tens of billions of dollars. At the same time, living conditions in the United States served as a standard of well-being for others.

• Balance of payments balance- the difference between receipts from abroad and payments abroad. Positive balance of payments means the excess of all payments coming into a country from abroad over payments from a given country to another. Negative balance of payments- the excess of payments from the country over payments to the country. Typically, international payments are made in the most convertible currency, such as US dollars or euros. A negative balance of payments gradually reduces the country's foreign exchange reserves. It needs to be replenished by selling goods for foreign currency or obtaining stabilization loans. But this does not happen if payments are made in the national currency of the state. Thus, the United States can simply issue (“reprint”) the required number of dollars to cover the negative balance. This will not necessarily be a direct money issue. There are quite a few options for “credit” money. But this is only possible within the banking system of the country to which this money belongs.

In 2007, Russia was preparing for the gradual transfer of foreign trade in its goods for rubles: then foreign economic partners would have a need for rubles, which meant the emergence of the opportunity to buy significant volumes of imports also for rubles and/or issue international ruble loans. Unfortunately, the global crisis of 2008 put an end to these plans.

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See what “Balance” is in other dictionaries:

- (Italian, this, see balance). Balance due upon closing of accounts; state of an account. Dictionary of foreign words included in the Russian language. Chudinov A.N., 1910. BALANCE [it. saldo calculation, balance] econ. in foreign trade:… … Dictionary of foreign words of the Russian language

Modern encyclopedia

Balance- (from Italian saldo calculation, payment, balance; English amount of balance, net balance) in accounting, the difference between cash receipts and expenses for a certain period of time, the difference in the total amounts of debit and credit. Credit balance... ... Accounting Encyclopedia

balance- The difference between cash receipts and expenses for a certain period of time; in international trade and payment settlements, the difference between the value of a country’s exports and imports (trade balance) or between its foreign... ... Technical Translator's Guide

Balance- (Italian saldo calculation, balance), 1) in accounting, the difference between the totals of entries in the debit and credit of accounts. 2) In bilateral foreign trade relations, the balance is the difference between the value of exports and imports (trade balance).… … Illustrated Encyclopedic Dictionary

- (Italian saldo calculation balance), 1) in accounting, the difference between the totals of entries in the debit and credit of accounts. The debit balance (debit is greater than credit) reflects the state of this type of economic assets on a certain date and is shown in ... ... Big Encyclopedic Dictionary

- (from Italian saldo calculation, balance) 1) the difference between cash receipts and expenses of a company or enterprise for a certain period of time; difference between cost. exports and imports of the country (trade balance), between payments for... ... Economic dictionary

A. The difference between financial receipts and expenses for a certain period of time. B. The difference between the value of a country's exports and imports (trade balance). B. The difference between foreign payments and receipts (balance... ... Dictionary of business terms

In Italian balance- this is a calculation or remainder. This term refers to the difference between total cash receipts and total cash expenditures in a particular time period. If we talk about the positioning of this term in accounting, then this will be the name for the difference in the total amounts of credit and debit turnover.

Types of balances

The balance can be beginning or ending. In this case, the debit balance is positive, and the credit balance is negative.

To determine the ending balance, it is added to the credit or debit turnover. If we take into account international trade and payment settlements, then the balance will be understood as the difference in the total amounts between imports and exports, as well as between receipts of financial resources in a particular country and payments abroad.

Debit and credit balance

If the debit is greater than the credit, then we are talking about a debit balance. It is capable of reflecting the state of affairs of a particular type of economic means in a specific time period. The debit balance is shown in the asset balance.

In the credit balance, the credit will be slightly greater than the debit. It can reflect the state of different sources of economic funds. In this case, the credit balance is shown not in the asset, but in the liability of the balance sheet.

Provided that the account has no balance, the balance indicator will be equivalent to zero. This account will be closed. In accounting practice, there have been cases when accounts simultaneously have a credit and debit balance.

If we take into account the practical part of the analysis of accounting, then not its entire history is studied, but only the time period of interest. In this context, the following types of balances can be distinguished:

• opening balance;
• debit turnover for the period;
• credit turnover for the period;
• balance for the period;
• opening balance.

Initial or opening balance shows the account balance at the start of the transaction. The basis for the calculation is the operations that were carried out previously.

Final or opening balance determines the account balance at the end of the specified period. Most often, the final result of the calculation is the arithmetic sum of the opening balance and turnover for the entire period.

Basis for calculation debit and credit turnover are operations carried out in a certain time period.

Balance for the period is the result of operations at a specific time.

Foreign trade relations

If we talk about foreign trade relations, then quite often we consider the amount of exports and imports for a specified time period. The resulting difference between the total value of imports and exports is called the trade balance. In this case, the balance can be negative or positive.

• In the first case, there is an excess of imports over exports.
• A positive balance will determine the excess of exports over imports, which essentially means a situation in which the country sells more goods rather than buys them.

There is also a concept called balance of payments. This is the name of the difference between foreign receipts and payments outside a single country. The balance of payments can also have a positive or negative value.

• In the first case, the excess of all payments that come into the country from abroad over payments that are made by this country is determined.
• When the balance of payments is negative, there is an excess of payments made over receipts.

International payments are most often made in the most convertible currency.