What does “balance” mean?

What exactly does the term “balance” imply? It describes the difference between an account’s income and expenses on an account statement. Find out what’s behind the debit and credit sides, as well as what a positive or negative balance means.

balance defination

What is the account balance?

The word “balance” comes from the Italian and means “to fasten.” The difference between the income – i.e. the credits – and the expenses – i.e. the debits – is the account balance. Credits are recorded on your checking account’s credit side. Charges such as a transfer or direct debit are posted to the debit side by your bank.

Plus or minus balance

The balance is positive if your income exceeds your expenses. The balance is negative if your expenses exceed your income. An overdraft on your checking account should be resolved as soon as possible. Calculate the balance using an income-expense plan, for example. This allows you to keep track of your finances and avoid becoming overly indebted.

Working time account and long-term account

The world of work is another context in which one can speak of a balance. Employees can organize their working hours more flexibly with a working time account. Electronically, the actual hours worked are recorded. Make plus hours if you go over your contracted hours. This indicates that you have a positive balance on your working time account.

If you don’t put in the required amount of time, you’ll get minus hours and a negative balance. Working time accounts come in a variety of shapes and sizes. Flextime, annual working time, and long-term accounts are among them. The long-term account, also known as value credit, allows you to save time credit. This is how you pay for a longer period of unemployment. You can use the credit to take advantage of a longer vacation or an earlier retirement, for example.