Opening Balance

Opening Balance

The debit or credit balance of a ledger account brought forward from the old accounting period to the new accounting period is called opening balance. This will be the first entry in a ledger account at the beginning of an accounting period. In other words, the closing balance of your previous accounting period will become the opening balance for the new accounting period.

A newly started business will not have any closing balances for the previous accounting year that has to be carried forward. Instead, the investments and capital of the business will be entered as opening balance for the current accounting year.


    • Related Articles

    • Trial Balance

      Trial Balance is a statement which contains the closing balances of all the ledger accounts as of a particular date. It has two sides: debit and credit to enter the respective closing balances of ledger accounts. The main purpose of running a trial ...

    • Balance Sheet

      The Balance Sheet provides the details of assets owned and liabilities owed by a business. It is also an important document to assess the long term financial position and the net worth of a business. A balance sheet will have two sides which ...

    • Trading Account

      This account is the very first step for preparing Profit and Loss Statement and Balance Sheet. Direct sales and direct expenses like wages, octroi which are related to the production or procurement of a product are taken into account while preparing ...

    • Debit

      Debit means an entry recorded for a payment made or owed. A debit entry is usually made on the left side of a ledger account. So, when a transaction occurs in a double entry system, one account is debited while another account is credited. An account ...

    • Stock

      Goods obtained for resale or manufactured for sale that are yet unsold on any particular date is known as stock. Opening Stock: Value of stock at the beginning of an accounting period. Closing Stock: Value of stock at the end of an accounting period. ...