What Are Footings?

A footing is the final balance when adding all of the debits and all of the credits in accounting. The debits are tallied, followed by the credits, and the two are netted to compute the account balance. Footings are commonly used in accounting to determine final balances to be put on the financial statements.

Key Takeaways

  • A footing is the final balance when adding all of the debits and all of the credits in accounting.
  • Once the debits and credits are each totaled, the two numbers–or footings–are netted to compute the account balance.
  • Footings are commonly used in accounting to determine the final account balances, which are reported on a company's financial statements.

Understanding Footings

As business transactions are recorded, accountants enter the amounts for each type of transaction in one of two columns. Each transaction is recorded as either a debit or credit. Both the debit and credit columns are summed whereby the total of each column is a footing.

The two footings are netted together to calculate the account balance for the period. The account balance is the amount that's carried over to the financial statements. The process is repeated for each type of transaction. The term "footing" is appropriate because the totals are located at the end of each column.

Example of Footings

Let's say as an example that the T-account listed below shows the inventory transactions for Macy's Inc. (M). Each inventory transaction is recorded during the period in its respective column–whether it was a debit or credit to the inventory account.

Footing Example using T Accounts
Footing Example using T Accounts.  Investopedia

Next, all of the debits in the debit column are totaled while all of the credits are totaled as well. The totals, as shown below, are located below the newly drawn horizontal line, which indicates the totals have been calculated.

The $28,200 and the $32,000 represent the footings for the debits and credits respectively.

Footing Example
Footing Example.  Investopedia

The two footings are netted together to arrive at the account balance for inventory. The net amount is reported on the company's financial statements for the period.

We can see below that Macy's reported a credit balance of $3,800 for inventory in the period.

Account Balance Inventory Example
Account Balance Inventory Example.  Investopedia