Posting Journal Entries to General Ledger Account, Page 13

Computing A New Account Balance

To compute a new account balance, remember these simple rules: 

• Debits are added to debits. 
• Credits are added to credits. 
• Debits and credits are subtracted from the amounts. 

After you have posted an account, compute the new account balance as follows : 

1. When the existing account balance is a debit:
2. Add the amount, if the amount posted is a debit. 
3. Deduct the amount, if the amount posted is a credit. 

When the existing account balance is a credit: 

1. Deduct the amount, if the amount posted is a debit. 
2. Add the amount, if the amount posted is a credit.