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Posting Journal Entries to General Ledger Account, Page 13

Computing A New Account Balancea ledger account with "+" and "-"symbols on it.

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.