Closing Balance
The closing balance is the final amount in an account at the end of an accounting period. It becomes the opening balance for the next period.
Closing Balance Definition
The closing balance (or ending balance) is the final amount in an account at the end of an accounting period — after all transactions have been recorded. Tomorrow's opening balance is today's closing balance.
How Closing Balances Work
Closing Balance = Opening Balance + Credits – Debits (for liability/equity accounts)
Closing Balance = Opening Balance + Debits – Credits (for asset accounts)
For your bank account: Closing Balance = Starting Balance + Deposits – Withdrawals
Why Closing Balances Matter
How Closing Balances Show Up in QuickBooks
Every account in QuickBooks has a running balance. When you run a balance sheet report, you're seeing the closing balances for all accounts as of that date. Bank reconciliation compares your QuickBooks closing balance to your bank's closing balance.
FAQ
Q: What if my closing balance doesn't match my bank statement?
A: That's what reconciliation is for. The difference is usually uncleared transactions, bank fees, or errors. Reconcile monthly to keep things tight.
Related Terms
> Need help making sense of your books? Ketchup cleans up your QuickBooks in 3–7 business days — so your numbers actually make sense. Get your price →
Related Terms
Accrued expenses are costs your business has incurred but hasn't paid for yet — and hasn't received a bill for either. They're different from accounts payable because with AP, you have an invoice in hand. With accrued expenses, you know the expense exists, but the bill hasn't arrived. They show up a
Segment reporting breaks down a company's financial results by business segment, geography, or product line — showing which parts of the business are profitable and which aren't.
Gross margin is the percentage of revenue remaining after subtracting the cost of goods sold (COGS). It tells you how much of every dollar in sales is available to cover operating expenses and generate profit. The formula is: (Revenue − COGS) ÷ Revenue × 100. A higher gross margin means more room fo
Inventory is the stock of goods a business holds for sale to customers or for use in producing goods for sale. It includes raw materials, work-in-progress, and finished goods. Inventory is classified as a current asset on the Balance Sheet because it's expected to be sold or used within one year.
Need these terms applied to your books?
Accounting Ketchup catches up your QuickBooks so the glossary becomes your reality. Flat rate.