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Chapter 5 Balancing-off accounts Frank Wood’s Business Accounting 1 1
Learning objectives After finishing this chapter, you will be able to: • close-off accounts when appropriate; • balance-off accounts at the end of a period and bring down the opening balance to the next period; • distinguish between a debit balance and a credit balance; • describe and prepare accounts in the three-column format (debit-credit-balance). 2
Debtors owe us nothing Dr K.Tandy a/c Cr Aug1 Sales 144 19 Sales 300 444 Aug22 Bank 144 28 Bank 300 444 In this account, the customer (K.Tandy) is no longer a debtor, (she does not owe us any money now). So her account is balanced-off. We say her account is closed off. 3