An account balance is an amount of money, which is present in the Savings Account. The account balance is the net amount after factoring all debits and credits. All accounts have a debit or credit balance, but it does not mean that it is a positive or negative balance.
Assets accounts have debit balances and liability accounts and equity accounts have credit balances. Although contra accounts have a balance opposite from their classification. In simple words, a contra asset account has a credit balance and contra equity account has a debit balance. These contra accounts have reduced their associated category level.
Account balances are computed by the beginning balance. The debits and credits are totaled and all are combined together is called as the account balance.
Other financial accounts also have an account balance. From a utility bill to a mortgage, account needs to display the balance. Some financial accounts those who have recurring bills, water bills your account display the amount you owned.
An account balance can also refer to the total amount of the money you owe to the third party. On the other hand, it can also refer to the total amount of money you owe to the third party such as credit card, utility company, mortgage banker or other types of lender.
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If you have a credit card, you may have purchased various item costs Rs. 1000, Rs. 500 and Rs. 250 and returned another item Rs. 100. The account balance includes the purchase made with a total amount of Rs. 1750, but you have received a return of Rs. 100. The net of debits and credits is Rs. 1650 or 1750 minus Rs. 100 is the amount of your account balance.