Opening and closing balances

Closing balance

The balance of a ledger at the end of a period: opening balance + debits − credits (for a debit-nature account).

Opening balance

The closing balance of the previous period becomes the opening balance of the next.

• Balance Sheet ledgers (assets, liabilities, capital) carry forward.
• P&L ledgers (income and expenses) start the new year at zero; the year's profit or loss moves to capital or retained earnings.

Setting up opening balances in Hisab Central

1. Enter each ledger's opening balance with Dr or Cr in the ledger master.
2. Enter opening stock quantity and rate in each stock item.
3. Check the opening Trial Balance: total Dr must equal total Cr. A difference usually means a missing ledger or wrong Dr/Cr side.
4. Enter outstanding customer and supplier bills bill-wise so ageing reports work.