Account Balance

AAA

DEFINITION of 'Account Balance'

1. The amount of money in a financial repository, such as a checking account, at any given moment.
2. The total amount of money owed to a third party such as a credit card company, utility company, mortgage banker or other type of lender or creditor.

The account balance will always be the net amount after factoring in all debits and credits.

INVESTOPEDIA EXPLAINS 'Account Balance'

For example, on a credit card account, you may have made purchases of $100, $50 and $25 and returned an item costing $10. The account balance would include not just the purchases you made, which total $175, but also the item you returned for $10. The net of your debits and credits would be $165 ($175 - $10), and that amount would be your account balance.

RELATED TERMS
  1. Reconciliation

    An accounting process used to compare two sets of records to ...
  2. Checking Account

    A transactional deposit account held at a financial institution ...
  3. Frozen Account

    An account to which no withdrawals or purchases can be charged. ...
  4. Savings Account

    A deposit account held at a bank or other financial institution ...
  5. Demand Deposit

    Funds held in an account from which deposited funds can be withdrawn ...
  6. Account

    1. An arrangement by which an organization accepts a customer's ...
RELATED FAQS
  1. How do I check the balance on my prepaid credit card?

    There are a few different ways to check the balance on a prepaid credit card using your phone or the Internet. Most prepaid ... Read Full Answer >>
  2. How is minimum transfer price calculated?

    A company that transfers goods between multiple divisions needs to establish a transfer price so that each division can track ... Read Full Answer >>
  3. What is the effective interest method of amortization?

    The effective interest method is an accounting practice used for discounting a bond. This method is used for bonds sold at ... Read Full Answer >>
  4. What does an unfavorable variance indicate to management?

    In managerial accounting, an unfavorable variance is discovered when a company's management performs a comparison between ... Read Full Answer >>
  5. Is there a way to include intangible assets in book-to-market ratio calculations?

    The book-to-market ratio is used in fundamental analysis to identify whether a company's securities are overvalued or undervalued. ... Read Full Answer >>
  6. What are some of the limitations and drawbacks of using a payback period for analysis?

    Limitations, or disadvantages, of using the payback period method in capital budgeting include the fact that it fails to ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    Shuffle Away Your Debt With Balance Transfers

    This option can save you big bucks, but only if you watch out for rates and fees.
  2. Savings

    All About Banking

    This tutorial will tell you everything you need to know about how checking and savings accounts work.
  3. Savings

    Bank Lingo: Routing Number Vs. Account Number

    Each consumer bank account has its own personal ID. And so does the bank. How do these numbers function and how do they protect the account holder?
  4. Investing Basics

    Calculating Unlevered Free Cash Flow

    Unlevered free cash flow (UFCF) is the free cash flow of a business before interest payments.
  5. Taxes

    Understanding Write-Offs

    Write-off has different meanings depending on the context in which it is used, but generally refers to a reduction in value due to expense or loss.
  6. Economics

    What are Capital Goods?

    Capital goods are assets with a useful life of more than one year that are used for the production of income.
  7. Economics

    Understanding Capital Assets

    A capital asset is one that a company plans on owning for more than one year, and uses in the production of revenue.
  8. Savings

    5 Things to Look for in a Private Banker

    When putting all your assets into one private banker basket, it pays to proceed with caution.
  9. Credit & Loans

    American Express Cards: Centurion Vs. Platinum

    If you're offered a coveted black card from AmEx, should you accept it?
  10. Investing

    Do You Need A Private Banker?

    They offer well-heeled clients unparalleled convenience, but could be prone to certain conflicts of interest.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!