What Are Footings?

In accounting, a footing is the final balance when adding all the debits and credits. Debits are tallied, followed by 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 financial statements.

Key Takeaways

  • In accounting, a footing is the final balance when adding all debits and credits.
  • Once the debits and credits are each totaled, the two numbersor footingsare 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. 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 the T-account listed below shows the inventory transactions for Macy's (M). Each inventory transaction is recorded during the period in its respective column—whether it was a debit or credit to the inventory account.

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Image by Sabrina Jiang © Investopedia 2021

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

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Image by Sabrina Jiang © Investopedia 2021

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.

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Image by Sabrina Jiang © Investopedia 2021