Balancing of account implies ascertaining the net position of each amount. Accounts in the ledger are periodically balanced, generally at the end of the accounting period, for this purpose.

The process requires that the two sides of the account are totaled, and the difference between them is calculated. This difference is written on the side which is shorter in order to make their totals equal. The words ‘balance c/d’ are written against this amount.

The amount of the balance is then brought down (b/d) in the next accounting period. This indicates that it is a continuing account till it is finally settled or closed.

However, it must be noted that accounts of expenses, losses, and gains/revenues are not balanced but are closed by transferring them to the Trading and Profit and Loss Account. Similarly, a Cash Book is balanced like a ledger account, but it usually has a debit balance because cash payments can never exceed cash receipts.