{
  "question_id": "CG-P1B-FULL-062",
  "slug": "what-is-the-book-balance-and-how-is-it-determined",
  "display_title": "What does the book balance (balance per books / balance as per cash book) mean, and how is it determined?",
  "format": "article-v2",
  "applies_to": {
    "countries": [
      "US"
    ],
    "frameworks": [],
    "tax_year": null,
    "platforms": []
  },
  "general_concept": true,
  "summary": "The book balance is your own record of what a cash or bank account holds: the balance of that account in your general ledger or cash book. Balance per books and balance as per cash book name the same figure. You determine it by taking the account's opening balance and applying every receipt and payment recorded in your books up to a stated date — recorded, whether or not the bank has processed it.",
  "body": "## What does the book balance actually denote?\n\nIt is the balance your own books carry for one cash or bank account. The book balance is the in-house general ledger record of the same account the bank also keeps a record of. Nobody outside the business supplies it. It exists whether or not you ever open a bank statement, because it is built entirely out of entries you have made.\n\nTwo things fix it. The first is the account: in your chart of accounts this is the line named something like Checking, Operating account or Cash in bank, and there is normally one such account for each real bank account. The second is a moment in time. The figure is always \"the book balance of this account as at this date\" — never a free-floating number.\n\nThat is why the term shows up in reconciliation work. When you are asked to compare your books to the bank, the quantity being compared on your side is this one, determined from your records alone. Determining it is a separate job from explaining any difference you then find.\n\n## Do \"balance per books\" and \"balance as per cash book\" mean the same figure?\n\nYes. They are three names for one quantity, and the names come from different recordkeeping traditions.\n\n**Balance per books** is the double-entry term. When reconciling the bank statement, the balance per books is the balance of the Cash account in the general ledger that pertains to the bank account. It reads as a column heading on a reconciliation form, sitting opposite the balance per bank.\n\n**Balance as per cash book** is the wording you meet where the cash record is a cash book. In a single entry system the cash book is the primary record, essentially an expanded form of a check register. The phrase itself is not defined in the references cited here. What makes it the same figure is what the record is: a cash book carries its own beginning and ending balances, and its closing balance is the business's own recorded balance for the account — which is exactly what the ledger figure is.\n\n**Book balance** is the plain term you will meet in conversation with an accountant and in general accounting references.\n\nIf someone hands you a reconciliation asking for the balance as per cash book and you keep posted ledger accounts, give them your ledger balance for that bank account. Nothing is being asked of you that you do not already hold.\n\n## How is the figure determined?\n\nThree inputs, in this order: a starting balance, the entries recorded since, and a date to stop at.\n\nEach ledger contains an opening balance, all debit and credit entries during the reporting period, and an ending balance. For a bank account, the entries recorded during the period are the receipts you have entered and the payments you have entered, so the determination reduces to one line of arithmetic:\n\n**Opening balance + receipts recorded − payments recorded, up to and including the cut-off date = book balance as at that date.**\n\nIn practice that is four steps:\n\n1. **Fix the account.** One bank account, one ledger account. If you want a combined cash figure, say so, because that is a different quantity.\n2. **Fix the date.** Write it down before you look at any number.\n3. **Confirm posting is complete to that date.** Every entry that belongs on or before the date has to be in the books, and no entry belonging after it may have been dated into the range.\n4. **Read or compute the ending balance** as at the date.\n\nSteps 3 and 4 are where a determination goes wrong, and neither shows on the face of the number.\n\n## Does an entry count if the bank has not processed it yet?\n\nYes, if you have recorded it. The inclusion test is the state of the entry in your books, not what the bank, the payee or the customer has since done with the underlying item.\n\nWork the two common cases through. A check you wrote and entered on the 28th that nobody has cashed is an outstanding check: recorded in your book balance, not yet presented to the bank. The money is already out of the book balance, because you recorded it. A deposit you took to the branch and entered but which the bank has not yet processed is a deposit in transit: received and recorded by you, not yet recorded by the bank. It is already in the book balance, for the same reason.\n\nThe rule runs the other way too. A service charge printed on the bank statement that you have not entered is not in your book balance, and a card payment you made on the 30th that is still sitting unentered is not in it either — but that one is a posting gap: for a period-end figure, post it in the normal way before you take the number. The service charge is different: you learned of it only from the bank, and it stays out until the reconciliation. Dealing with bank-only items like that belongs to preparing the bank reconciliation, not to determining this number.\n\n## What does a determination look like on real entries?\n\nTake an operating account whose ledger opens March at 12,480.00. These entries were recorded during March, and two more items exist that were not.\n\n| Date | Entry recorded | Money in | Money out | Running balance |\n|---|---|---|---|---|\n| Mar 1 | Opening balance | | | 12,480.00 |\n| Mar 3 | Customer deposit | 4,200.00 | | 16,680.00 |\n| Mar 9 | Check 1041, supplier | | 1,350.00 | 15,330.00 |\n| Mar 14 | Payroll ACH | | 5,600.00 | 9,730.00 |\n| Mar 20 | Customer deposit | 2,975.00 | | 12,705.00 |\n| Mar 28 | Check 1042, rent | | 3,100.00 | 9,605.00 |\n\nThe book balance as at March 31 is **9,605.00**.\n\nTwo items are outside it, for different reasons:\n\n- **A 42.00 bank service charge dated March 31** appears on the statement but has not been entered. It falls outside because it is not recorded, even though its date is inside the period.\n- **A 1,800.00 customer deposit dated April 2 and entered that day** falls outside because the date it carries in the books is past the cut-off, even though it is recorded. (Had it been received on March 30 and keyed on April 2 with a March 30 date, it would belong inside — and its absence when you first took the figure would have been a completeness gap, not a cut-off exclusion.)\n\nCheck 1042 stays in the figure although the landlord has not deposited it, and the March 20 deposit stays in although the bank credited it on April 1. Both were recorded on or before March 31, which is the only question the determination asks.\n\n## Why does the as-of date decide the figure?\n\nBecause there is no such thing as the book balance in general — only the book balance as at a moment. Every entry you post afterwards changes it, and moving the date by one day can change it by the largest payment in the file.\n\nTwo situations behave differently.\n\n**A period-end determination.** In accounting, the cutoff date is the point in time that delineates when additional business transactions are to be recorded in the following reporting period. Posting for the period is expected to be finished, so the figure is stable: take it again next week and you should get the same number. This is the version worth comparing with anything or reporting to anyone.\n\n**A current-date determination.** If you are standing in the middle of a month with entries still going in, the figure is a snapshot of an incomplete record. It is legitimate — you often need to know where you stand today — but it is provisional, it can change within the hour, and it should be labelled with the date and time you took it.\n\nBefore you rely on either, run the completeness check: checks written recorded, deposits made recorded, card and ACH payments you initiated recorded, recurring and payroll entries posted, and nothing dated after the cut-off sitting inside the range. Items you learn of only from the bank — service charges, interest earned, a deposited check returned for not sufficient funds — are not part of completeness: they are reconciling items that arise as part of the bank reconciliation, and they are recorded through it, after this figure is taken.\n\n## Why does the figure differ from the balance the bank reports?\n\nBecause they are two independent records of the same account, kept by two different parties. The bank balance is the balance reported by the bank on a firm's bank account at the end of the month. The book balance is yours. You record an item when you write, receive or enter it; the bank records it when it processes it. The gap between those two events is ordinary business.\n\nSo a difference at a point in time is expected rather than evidence that your books are wrong: the bank and book balances are almost never the same. A reader who determines the figure carefully and then finds it disagrees with the bank has not made a mistake — they have produced exactly the input the comparison needs. Explaining and clearing the difference is the work of a bank reconciliation.\n\n## Should I adjust the figure toward what the bank shows?\n\nNot while you are determining it. The whole value of this quantity is that it is an independent statement of what your records say, produced without reference to the bank's number. If you nudge it toward the statement — entering a fee you only know of from the statement as if it were your own entry, back-dating a deposit, plugging a difference — the two sides stop being independent, the comparison can no longer detect anything, and the items you papered over stay unrecorded in your ledger.\n\nDetermine the figure first, in full, from your own entries. Only after that does anything get adjusted, and then only through entries you would defend on their own merits.\n\n## Where in my records do I read it?\n\nAny of three places, and they should agree:\n\n- **The ledger account for that bank account.** Its ending balance as at your date is the figure.\n- **A trial balance as at your date.** The trial balance is an accounting report that lists the ending balance in each general ledger account, so the row for your bank account carries the figure, provided the trial balance was run after posting to that date was complete; a trial balance taken before late entries were posted shows the balance as it stood then, not the final one.\n- **A general ledger or account-history report in accounting software**, run for that one account with the date range ending on your as-of date.\n\nThen confirm you took the right line. The account name or number should match the bank account you mean, not a second account with a similar name, a clearing account or an undeposited-funds account. The report's end date should equal your as-of date exactly. The figure should equal the running balance on the last entry dated on or before that date. And no entry dated after your date should appear inside the range.\n\nWrite down the parameters with the number: which account, which end date, and — if the report offers a basis or filter setting — what it was set to. A balance pulled from a report whose parameters nobody recorded cannot be compared with anything later, and the number itself will never tell you it was defective.\n\n## What if I keep a cash book or spreadsheet rather than a posted ledger?\n\nThe rule is the same; the mechanics differ, because there is no posted ledger account to read.\n\nA cash book carries its own balances on its face: it has room at the top and bottom of each page in which to show beginning and ending balances. The determination is to start from the balance brought forward at the top of the period, add the receipts column, subtract the payments column, and stop at the last row dated on or before your cut-off. Here the cut-off is a line you draw between rows, not a date parameter on a report, so it pays to mark it — a ruled line, or a highlighted row — and to keep later entries below it.\n\nIn a spreadsheet, keep a running-balance column rather than relying on a total at the bottom, because a total sums whatever rows are present regardless of their dates. Before you read the figure, sort by date and confirm no later-dated row has crept above your cut-off line, and that no filter is hiding rows inside it.\n\nThe mapping into ledger language is direct: the receipts side corresponds to what a posted ledger records as increases in the cash account and the payments side to decreases, and the closing balance of the cash book is the same figure a ledger account would show. A business keeping a cash book and a business keeping double-entry software can both hand over a balance as per cash book, and they mean the same thing by it.\n\n## What if the business has more than one bank account?\n\nUnless someone says otherwise, the term attaches to one account. A reconciliation is prepared per bank account, so the figure it wants is the balance of the one ledger account that pertains to that bank account.\n\nThe combined amount is a different quantity with its own name: ledger cash is the net amount of cash when all of an organization's cash accounts have been combined. That aggregate is also called book cash, which is not the same thing as the book balance of one account — if someone uses that term, ask which account population they mean. That is what a cash line on a balance sheet is built from, and it will not match any single bank statement.\n\nSo determine per account, and state which you produced. If you were asked for the book balance and returned an all-accounts total, or read a summary cash line when a single account was wanted, the number is right and the answer is wrong.",
  "sources": [
    {
      "id": "REF::1",
      "url": "https://www.accountingtools.com/articles/the-difference-between-bank-balance-and-book-balance",
      "title": "The difference between bank balance and book balance",
      "publisher": "AccountingTools, Inc.",
      "published": "July 29, 2026",
      "retrieved_at": "2026-09-18T00:22:55+00:00",
      "sha256": "98b8704dccfba21c3080bb6754cb10cf5ab8654752ff09beeed3fad91d1c8d74",
      "supports": [
        "C1",
        "C5",
        "C8"
      ]
    },
    {
      "id": "REF::2",
      "url": "https://www.accountingcoach.com/terms/B/balance-per-books",
      "title": "balance per books definition and meaning",
      "publisher": "AccountingCoach, LLC",
      "published": "undated",
      "retrieved_at": "2026-09-18T00:22:56+00:00",
      "sha256": "daff6b5d1f5660158e5ad1f3efc49fb2251b3ed000fb4dd682eff67186078156",
      "supports": [
        "C2"
      ]
    },
    {
      "id": "REF::3",
      "url": "https://www.accountingtools.com/articles/what-is-a-single-entry-system.html",
      "title": "Single entry system definition",
      "publisher": "AccountingTools, Inc.",
      "published": "September 14, 2026",
      "retrieved_at": "2026-09-18T00:22:57+00:00",
      "sha256": "aff76d0571f33dd4736c71bf48f19357b67d87721f395f0c665f25ee91671ef1",
      "supports": [
        "C3",
        "C11"
      ]
    },
    {
      "id": "REF::4",
      "url": "https://www.accountingtools.com/articles/what-is-a-ledger-account.html",
      "title": "Ledger account definition",
      "publisher": "AccountingTools, Inc.",
      "published": "March 23, 2026",
      "retrieved_at": "2026-09-18T00:22:59+00:00",
      "sha256": "79e56fce2d73a84c3ae6e44d7339cae80161baf4aa4add1b95d056d4df099cc4",
      "supports": [
        "C4"
      ]
    },
    {
      "id": "REF::5",
      "url": "https://www.accountingtools.com/articles/bank-reconciliation",
      "title": "Bank reconciliation definition",
      "publisher": "AccountingTools, Inc.",
      "published": "December 17, 2025",
      "retrieved_at": "2026-09-18T00:23:00+00:00",
      "sha256": "c24534db9a7f899b401ae54719a50cfdd9244aaebdf47477c8253bbcc34d82f3",
      "supports": [
        "C6"
      ]
    },
    {
      "id": "REF::6",
      "url": "https://www.accountingtools.com/articles/cutoff-date",
      "title": "Cutoff date definition",
      "publisher": "AccountingTools, Inc.",
      "published": "September 17, 2026",
      "retrieved_at": "2026-09-18T00:23:02+00:00",
      "sha256": "47a6f34a4a53f9573228aa074ab583078c123ab622231cf2e15040895532be92",
      "supports": [
        "C7"
      ]
    },
    {
      "id": "REF::7",
      "url": "https://www.accountingtools.com/articles/what-is-a-book-balance.html",
      "title": "Book balance definition",
      "publisher": "AccountingTools, Inc.",
      "published": "February 10, 2026",
      "retrieved_at": "2026-09-18T00:23:03+00:00",
      "sha256": "802d02b0087316c8efae8adbb2c5c30e84105ed55c9c13a5f54412ae9bb1e391",
      "supports": [
        "C9",
        "C13",
        "C14",
        "C15"
      ]
    },
    {
      "id": "REF::8",
      "url": "https://www.accountingtools.com/articles/the-trial-balance-example-format",
      "title": "Trial balance definition",
      "publisher": "AccountingTools, Inc.",
      "published": "March 04, 2026",
      "retrieved_at": "2026-09-18T00:23:04+00:00",
      "sha256": "949dfc12ffcf12bc88fba2b0637da16f1996c4a6f7bc81489d61286febf9325b",
      "supports": [
        "C10",
        "C16"
      ]
    },
    {
      "id": "REF::9",
      "url": "https://www.accountingtools.com/articles/ledger-cash",
      "title": "Ledger cash definition",
      "publisher": "AccountingTools, Inc.",
      "published": "January 26, 2026",
      "retrieved_at": "2026-09-18T00:23:05+00:00",
      "sha256": "9e8d8f70803007dd990c10bd749e8287e8dfcda3298b556a455872cc410bdc46",
      "supports": [
        "C12",
        "C17"
      ]
    }
  ],
  "related": [
    {
      "question_id": "CG-P1B-FULL-054",
      "slug": "what-does-cleared-balance-on-a-bank-statement-mean",
      "display_title": "What does “cleared balance” on a bank statement mean?"
    },
    {
      "question_id": "CG-P1B-FULL-086",
      "slug": "what-is-the-balance-per-the-bank-statement",
      "display_title": "What is the balance per the bank statement as a component of a bank reconciliation?"
    }
  ],
  "review_class": "routine",
  "review_class_trigger": null,
  "provenance": {
    "author_model": "claude-opus-5",
    "reviewer_model": "claude-fable-5-1",
    "review_verdict": "ACCEPT",
    "review_source": "closure",
    "review_verdict_on_sha256": "f58e6390711621a196698c28a995dd2f9693289177d58c598db3d3b471b0169f",
    "editorial_disposition": "ACCEPT",
    "corrections": 1,
    "approved_by": null,
    "approved_at": null,
    "article_sha256": "f58e6390711621a196698c28a995dd2f9693289177d58c598db3d3b471b0169f",
    "source_map_sha256": "b43056285a13294957bbc6ae7a48a7973283ed4bafe7e93763461e872cc5f372",
    "transform_sha256": "4349d3c7e06de5330f02504925e9fa878ba1f4cb181aa56020c5649e37d84d50"
  },
  "offer": "ask",
  "offer_id": null,
  "sample_target_id": null,
  "datePublished": "2026-09-20T15:54:17Z",
  "reviewed_at": "2026-09-20T15:54:17Z",
  "content_sha": "914343f2fff3b418938b77f0fd3a5e159c98e49f926a8e8a353ecaec8c6ace53",
  "release": "2.2.0",
  "slug_provenance": "minted at first publication",
  "question_text": "What does the book balance (balance per books / balance as per cash book) mean, and how is it determined?",
  "jsonld_types": [
    "Article"
  ],
  "related_question_ids": [
    "CG-P1B-FULL-054",
    "CG-P1B-FULL-086",
    "CG-P1B-002",
    "CG-MCE-099",
    "CG-P1B-FULL-095"
  ],
  "aliases": [],
  "alias_provenance": []
}