How are opening balances recorded in general ledger? For example if it didn’t specify credit or...

How are opening balances recorded in general ledger? For example if it didn’t specify credit or debit from the previous month, how would you know when doing a new month?

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Expert Solution

Opening balance is the closing balance of the last month and closing balance is the balalncing figure i.e. the resudiual value get after considering the all the figure of a ledger. This closing balance is brought forward next month and is figured as balance in the balancesheet of every month whether in the assest side or laibility side. If there is no balance borught forward of any ledger, it may possible that its balance got nil. for example if there is outstanding salary in the last month then it will be brought forward in the next month but it is paid, then its opening balance will be nil. There is need to check the tansactions relted to those ledger whose balance not appearing in the next month. For example a debtor with balance in the last month has paid all his dues and now showinng no opening balance. similary a creditor has been paid full and there fore there will be no opening balance of the creditor in the next month.

I hope this will help you, in case further query please comment.

ekkarill92 answered 1 year ago

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