# Account Balance

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

## What is Account Balance?

Account Balance represents the difference between debits and credits in an account on a company’s general ledger. If debits are larger than credits, the account has a net debit Account Balance. If Credits are larger than debits, the account has a net credit Account Balance.

### Account Balance Formula

ƒ Sum(Account Credits - Account Debits)
ƒ Sum(Account Debits - Account Credits)

### How to calculate Account Balance

In a single day, a store generates a total of \$10,000 in new sales (credits), and issues \$1,500 in refunds (debits). The store’s revenue account has a net credit balance for the day of \$8,500.

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data.

### How to visualize Account Balance?

Visualize your Account Balance by using a summary chart to display the current value, optionally comparing to a previous time period.

### Account Balance visualization example

Account Balance

\$6613

288.79

vs previous period

#### Summary Chart

Here's an example of how to visualize your current Account Balance data in comparison to a previous time period or date range.

Account Balance

#### Chart

Measuring Account Balance

A general ledger records, stores, and summarizes the transactions that take place in a company's accounts. Generally, accounts include assets, liabilities, owner's equity, revenue, and expenses.

Transactions taking place in business accounts are recorded in a general ledger, with an equal debit and credit amount which always keeps the general ledger balanced. This is the function of a double entry accounting system and as a result the following equations will always hold true:

Assets = Liabilities + Owners Equity

Net Income = Income - Expenses

Tracking Account Balance helps businesses prepare their financial statements such as the income statement and the balance sheet. Additionally, historical records in a general ledger summarize past transactions and can help file taxes, comply with government regulation, and analyze business trends.

### Recommended resources related to Account Balance

How to calculate credits and debits in a general ledger.