Balance is a widely used concept in many fields. It is one of the basic concepts in accounting, trade and banking. Learn more about it!
What exactly is a balance? Definition of the concept
Balance is the difference between income and expenses, assets and liabilities. It can be defined as “the difference between two amounts or items.” Balance is an important indicator used to determine the financial performance of a person or company.
What does the balance represent?
Balance is an indicator that measures the difference between income and expenses, assets and liabilities. If the balance is positive, it means that income is greater than expenses, assets and liabilities. If the balance is negative, it means that expenses are greater than income, assets and liabilities.
Balance – practical examples
Below are examples of balance in different situations:
- Example 1: When a person has a balance of 500 PLN in his bank account, it means that he has 500 PLN available.
- Example 2: When a company has an asset balance of PLN 100,000, it means that the company’s assets are PLN 100,000.
- Example 3: When a company has a liability balance of PLN 50,000, it means that this company’s liabilities are PLN 50,000.
In summary, balance is a widely used concept in many fields. It is one of the basic concepts in accounting, trade and banking. The balance is an indicator that measures the difference between income and expenses, assets and liabilities. It is used to determine the financial result of a person or company. Balance is particularly important in banking, accounting and trade.
